EXHIBIT 4.8
EXECUTION COPY
SMITHFIELD FOODS, INC.
7 5/8% Senior Subordinated Notes due 2008
INDENTURE
Dated as of February 9, 1998
SUNTRUST BANK, ATLANTA
as Trustee
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310 (a)(1) .................................... 6.10
(a)(2) .................................... 6.10
(a)(3) .................................... N.A.
(a)(4) .................................... N.A.
(b) .................................... 6.8; 6.10
(c) .................................... N.A.
311 (a) .................................... 6.11
(b) .................................... 6.11
(c) .................................... N.A.
312 (a) .................................... 2.5
(b) .................................... 10.3
(c) .................................... 10.3
313 (a) .................................... 6.6
(b)(1) .................................... N.A.
(b)(2) .................................... 6.6
(c) .................................... 6.6
(d) .................................... 6.6
314 (a) .................................... 3.2; 10.2
(b) .................................... N.A.
(c)(1) .................................... 10.4
(c)(2) .................................... 10.4
(c)(3) .................................... N.A.
(d) .................................... N.A.
(e) .................................... 10.5
(f) .................................... 3.9
315 (a) .................................... 6.1
(b) .................................... 6.5; 10.2
(c) .................................... 6.1
(d) .................................... 6.1
(e) .................................... 5.11
316 (a)(last sentence) .................................... 10.6
(a)(1)(A) .................................... 5.5
(a)(1)(B) .................................... 5.4
(a)(2) .................................... N.A.
(b) .................................... 5.7
317 (a)(1) .................................... 5.8
(a)(2) .................................... 5.9
(b) .................................... 2.4
318 (a) .................................... 11.1
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference.................................. 1
SECTION 1.1. Definitions.............................................................................. 1
SECTION 1.2. Other Definitions........................................................................ 20
SECTION 1.3. Incorporation by Reference of Trust Indenture Act........................................ 20
SECTION 1.4. Rules of Construction.................................................................... 21
ARTICLE II
The Securities................................................ 21
SECTION 2.1. Form, Dating............................................................................. 21
SECTION 2.2. Execution and Authentication............................................................. 27
SECTION 2.3. Registrar and Paying Agent............................................................... 28
SECTION 2.4. Paying Agent To Hold Money in Trust...................................................... 29
SECTION 2.5. Securityholder Lists..................................................................... 29
SECTION 2.6. Transfer and Exchange.................................................................... 29
SECTION 2.7. Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors............................................... 32
SECTION 2.8. Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S............................................................ 34
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities.......................................... 35
SECTION 2.10. Outstanding Securities.................................................................. 36
SECTION 2.11. Temporary Securities.................................................................... 36
SECTION 2.12. Cancellation............................................................................ 37
SECTION 2.13. Payment of Interest; Defaulted Interest................................................. 37
SECTION 2.14. Computation of Interest................................................................. 38
SECTION 2.15. CUSIP Numbers........................................................................... 38
ARTICLE III
Covenants.................................................. 38
SECTION 3.1. Payment of Securities.................................................................... 38
SECTION 3.2. SEC Reports.............................................................................. 39
SECTION 3.3. Limitation on Indebtedness............................................................... 39
SECTION 3.4. Limitation on Layering................................................................... 41
SECTION 3.5. Limitation on Restricted Payments........................................................ 41
SECTION 3.6. Limitation on Restrictions on Distributions from Restricted
Subsidiaries.................................................................................. 43
SECTION 3.7. Limitation on Sales of Assets and Subsidiary Stock....................................... 44
SECTION 3.8. Limitation on Transactions with Affiliates............................................... 47
SECTION 3.9. Change of Control........................................................................ 48
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SECTION 3.10. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries....................................................................... 49
SECTION 3.11. Limitation on Liens..................................................................... 50
SECTION 3.12. Limitation on Issuances of Guarantees of Indebtedness by
Restricted Subsidiaries....................................................................... 50
SECTION 3.13. Limitation on Lines of Business......................................................... 51
SECTION 3.14. Maintenance of Office or Agency......................................................... 51
SECTION 3.15. Money for Security Payments to Be Held in Trust......................................... 52
SECTION 3.16. Corporate Existence..................................................................... 53
SECTION 3.17. Payment of Taxes and Other Claims....................................................... 54
SECTION 3.18. Maintenance of Properties............................................................... 54
SECTION 3.19. Insurance............................................................................... 54
SECTION 3.20. Compliance with Laws.................................................................... 54
SECTION 3.21. Compliance Certificate.................................................................. 54
SECTION 3.22. Further Instruments and Acts............................................................ 55
ARTICLE IV
Successor Company and Successor Guarantor .................................. 55
SECTION 4.1. When Company May Merge or Otherwise Dispose of Assets.................................... 55
SECTION 4.2. When a Note Guarantor May Merge or Otherwise Dispose of
Assets........................................................................................ 56
ARTICLE V
Defaults and Remedies............................................ 57
SECTION 5.1. Events of Default........................................................................ 57
SECTION 5.2. Acceleration............................................................................. 59
SECTION 5.3. Other Remedies........................................................................... 60
SECTION 5.4. Waiver of Past Defaults.................................................................. 60
SECTION 5.5. Control by Majority...................................................................... 60
SECTION 5.6. Limitation on Suits...................................................................... 61
SECTION 5.7. Rights of Holders to Receive Payment..................................................... 61
SECTION 5.8. Collection Suit by Trustee............................................................... 61
SECTION 5.9. Trustee May File Proofs of Claim......................................................... 61
SECTION 5.10. Priorities.............................................................................. 62
SECTION 5.11. Undertaking for Costs................................................................... 62
ARTICLE VI
Trustee................................................... 62
SECTION 6.1. Duties of Trustee........................................................................ 62
SECTION 6.2. Rights of Trustee........................................................................ 63
SECTION 6.3. Individual Rights of Trustee............................................................. 64
SECTION 6.4. Trustee's Disclaimer..................................................................... 64
SECTION 6.5. Notice of Defaults....................................................................... 64
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SECTION 6.6. Reports by Trustee to Holders............................................................ 65
SECTION 6.7. Compensation and Indemnity............................................................... 65
SECTION 6.8. Replacement of Trustee................................................................... 66
SECTION 6.9. Successor Trustee by Merger.............................................................. 67
SECTION 6.10. Eligibility; Disqualification........................................................... 67
SECTION 6.11. Preferential Collection of Claims Against Company....................................... 67
ARTICLE VII
Discharge of Indenture; Defeasance...................................... 67
SECTION 7.1. Discharge of Liability on Securities; Defeasance......................................... 67
SECTION 7.2. Conditions to Defeasance................................................................. 68
SECTION 7.3. Application of Trust Money............................................................... 69
SECTION 7.4. Repayment to Company..................................................................... 70
SECTION 7.5. Indemnity for U.S. Government Obligations................................................ 70
SECTION 7.6. Reinstatement............................................................................ 70
ARTICLE VIII
Amendments.................................................. 71
SECTION 8.1. Without Consent of Holders............................................................... 71
SECTION 8.2. With Consent of Holders.................................................................. 72
SECTION 8.3. Compliance with Trust Indenture Act...................................................... 73
SECTION 8.4. Revocation and Effect of Consents and Waivers............................................ 73
SECTION 8.5. Notation on or Exchange of Securities.................................................... 73
SECTION 8.6. Trustee To Sign Amendments............................................................... 73
ARTICLE IX
Subordination................................................ 74
SECTION 9.1. Agreement To Subordinate................................................................. 74
SECTION 9.2. Liquidation, Dissolution, Bankruptcy..................................................... 74
SECTION 9.3. Default on Senior Indebtedness........................................................... 74
SECTION 9.4. Acceleration of Payment of Securities.................................................... 75
SECTION 9.5. When Distribution Must Be Paid Over...................................................... 75
SECTION 9.6. Subrogation.............................................................................. 75
SECTION 9.7. Relative Rights.......................................................................... 75
SECTION 9.8. Subordination May Not Be Impaired by Company............................................. 76
SECTION 9.9. Rights of Trustee and Paying Agent....................................................... 76
SECTION 9.10. Distribution or Notice to Representative................................................ 76
SECTION 9.11. Article IX Not To Prevent Events of Default or Limit Right
To Accelerate................................................................................. 76
SECTION 9.12. Trust Moneys Not Subordinated........................................................... 76
SECTION 9.13. Trustee Entitled To Rely................................................................ 77
SECTION 9.14. Trustee To Effectuate Subordination..................................................... 77
SECTION 9.15. Trustee Not Fiduciary for Holders of Senior Indebtedness................................ 77
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SECTION 9.16. Reliance by Holders of Senior Indebtedness on Indebtedness
on Subordination Provisions. ................................................................. 77
ARTICLE X
Miscellaneous................................................ 78
SECTION 10.1. Trust Indenture Act Controls............................................................ 78
SECTION 10.2. Notices................................................................................. 78
SECTION 10.3. Communication by Holders with other Holders............................................. 79
SECTION 10.4. Certificate and Opinion as to Conditions Precedent...................................... 79
SECTION 10.5. Statements Required in Certificate or Opinion........................................... 79
SECTION 10.6. When Securities Disregarded............................................................. 80
SECTION 10.7. Rules by Trustee, Paying Agent and Registrar............................................ 80
SECTION 10.8. Legal Holidays.......................................................................... 80
SECTION 10.9. Governing Law........................................................................... 80
SECTION 10.10. No Recourse Against Others............................................................. 80
SECTION 10.11. Successors............................................................................. 81
SECTION 10.12. Multiple Originals..................................................................... 81
SECTION 10.13. Variable Provisions.................................................................... 81
SECTION 10.14. Qualification of Indenture............................................................. 81
SECTION 10.15. Table of Contents; Headings............................................................ 81
EXHIBIT A Form of the Initial Note
EXHIBIT B Form of the Exchange Note
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INDENTURE dated as of February 9, 1998, among SMITHFIELD FOODS, INC., a Virginia
corporation (the "Company"), and SunTrust Bank, Atlanta, a banking corporation
duly organized and existing under the laws of the State of Georgia (the
"Trustee").
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
7 5/8% Senior Subordinated Notes due 2008 (the "Initial Notes") and, if and when
issued in exchange for Initial Notes as provided in the Registration Rights
Agreement (as hereinafter defined), the Company's 7 5/8% Senior Subordinated
Notes due 2008 (the "Exchange Notes" and, together with the Initial Notes, the
"Securities"):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.
"Acquired Indebtedness" means Indebtedness (i) of a Person or
any of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or (ii) assumed in connection with the acquisition of assets from
such Person, in each case whether or not incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to have
been incurred, with respect to clause (i) of the preceding sentence, on the date
such Person becomes a Restricted Subsidiary and, with respect to clause (ii) of
the preceding sentence, on the date of consummation of such acquisition of
assets. Notwithstanding the foregoing, no Person (other than the Company or any
Subsidiary of the Company) in whom a Receivables Entity makes an Investment in
connection with a Qualified Receivables Transaction shall be deemed to be an
Affiliate of the Company or any of its Subsidiaries solely by reason of such
Investment.
"Additional Assets" means: (i) any property or assets (other
than Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business, (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary or (iii) Capital Stock
constituting a minority interest in any Person that at such time is or will
thereupon become a Restricted Subsidiary; provided, however, that, in the case
of clauses (ii) and (iii) of this definition, such Restricted Subsidiary is
primarily engaged in a Related Business.
"Affiliate" of any specified Person means (i) any other
Person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any Person who is a
director or officer (a) of such Person, (b) of any Subsidiary of such Person or
(c) of any Person described in clause (i) above and (iii) any beneficial owner
of shares representing 5% or more of the total voting power of the Voting Stock
(on a fully diluted basis) of the Company or of rights or warrants to purchase
such
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Voting Stock (whether or not currently exercisable) and any Person who would be
an Affiliate of any such beneficial owner pursuant to clauses (i) and (ii). For
the purposes of this definition, "control" when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer, or other
issuance or disposition (or series of related sales, leases, transfers, issuance
or dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries (including
any disposition by means of a sale and leaseback, merger, consolidation or
similar transaction, but excluding any disposition by means of any pledge of
assets or stock by the Company or any of its Subsidiaries otherwise permitted
under this Indenture, and any transaction or series of related transactions from
which the Company or any of its Subsidiaries receive an aggregate consideration
of less than $500,000) other than (i) a disposition by a Restricted Subsidiary
to the Company or by the Company or a Restricted Subsidiary to a Wholly-Owned
Subsidiary, (ii) a disposition of assets held for resale in the ordinary course
of business, (iii) the sale of Temporary Cash Investments in the ordinary course
of business, (iv) the sale or other disposition of damaged, worn, unneeded or
obsolete equipment in the ordinary course of business, (v) for purposes of
Section 3.7 only, a disposition subject to Section 3.5, (vi) the sale of other
assets so long as the fair market value of the assets disposed of pursuant to
this clause (vi) does not exceed $2.0 million in the aggregate in any fiscal
year and $10.0 million in the aggregate prior to February 15, 2008, (vii) any
disposition of assets pursuant to and in accordance with the provisions of
Section 3.9 and/or Article IV, (viii) sales or other dispositions of assets for
consideration at least equal to the fair market value of the assets sold or
disposed of, to the extent that the consideration received would constitute
Additional Assets or an Investment in a Permitted Joint Venture that in each
case complies with Section 3.5 and (ix) sales of accounts receivable and related
assets of the type specified in the definition of "Qualified Receivables
Transaction" to a Receivables Entity for the fair market value thereof,
including cash in an amount at least equal to 75% of the book value thereof as
determined in accordance with GAAP.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate assumed in making calculations in accordance with FAS 13) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of all
such payments.
3
"Bank Indebtedness" means any and all amounts payable under or
in respect of the Revolving Credit Facilities and any Refinancing Indebtedness
with respect to the foregoing, as amended from time to time, including
principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not a claim for postfiling interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees and
all other amounts payable thereunder or in respect thereof (including, without
limitation, cash collateralization of letters of credit).
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board
of Directors with respect to the relevant matter.
"Borrowing Base" means, as of the date of determination, an
amount equal to the sum, without duplication of (i) 75% of the net book value of
the Company's and its Restricted Subsidiaries' accounts receivable at such date
and (ii) 75% of the net book value of the Company's and its Restricted
Subsidiaries' inventories at such date. Net book value shall be determined in
accordance with GAAP and shall be that reflected on the most recent available
balance sheet (it being understood that the accounts receivable and inventories
of an acquired business may be included if such acquisition has been completed
on or prior to the date of determination).
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banking institutions are authorized or required by
law to close in New York City or Atlanta, Georgia.
"Capital Stock" of any Person means (i) with respect to any
Person that is a corporation, any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) equity of such Person, including any Preferred Stock, and
(ii) with respect to any Person that is not a corporation, any and all
partnership or other equity interests of such Person but in each case excluding
any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP, and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or
instrumentality thereof, (ii) certificates of deposit, time deposits and
eurodollar time deposits with maturities of one year or less from the date of
acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any commercial bank having capital
and surplus in excess of $500 million and the commercial paper of the holding
company of which
4
is rated at least "A-1" or the equivalent thereof by S&P or "P-1" or the
equivalent thereof by Moody's, (iii) repurchase obligations for underlying
securities of the types described in clauses (i) and (ii) entered into with any
financial institution meeting the qualifications specified in clause (ii) above,
(iv) commercial paper rated "A-1" or the equivalent thereof by S&P or "P-1" or
the equivalent thereof by Moody's and in each case maturing within one year
after the date of acquisition thereof, (v) investment funds investing 95% of
their assets in securities of the type described in clauses (i)-(iv) above.
"Change of Control" means the occurrence of any of the
following events:
(i) any sale, transfer or other conveyance, whether direct or
indirect, of all or substantially all of the fair market value of
assets of the Company on a consolidated basis, in one transaction or a
series of related transactions, to any Person or Persons other than the
Company or one or more of its Restricted Subsidiaries;
(ii) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any
such Person has the right to acquire within one year), directly or
indirectly, of more than 50% of the Voting Stock of the Company (or its
successor by merger, consolidation or purchase of all or substantially
all of its assets);
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors of the
Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority
of the Board of Directors then in office; or
(iv) the adoption of a plan relating to the liquidation or
dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Smithfield Foods, Inc. until a successor
replaces it and, thereafter, means such successor.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA of the Company and its
Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such determination for which
consolidated financial statements of the Company are available to (ii)
Consolidated Interest Expense of the Company and its Restricted Subsidiaries for
such four consecutive fiscal quarters; provided, however, that (1) if the
Company or any Restricted
5
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence
of Indebtedness, EBITDA and Consolidated Interest Expense for such period shall
be calculated after giving effect on a pro forma basis to such Indebtedness as
if such Indebtedness had been Incurred on the first day of such period and the
discharge of any other Indebtedness repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period, (2) if since the beginning of such
period the Company or any Restricted Subsidiary shall have made any Asset
Disposition, the EBITDA for such period shall be reduced by an amount equal to
the EBITDA (if positive) directly attributable to the assets that are the
subject of such Asset Disposition for such period or increased by an amount
equal to the EBITDA (if negative) directly attributable thereto for such period
and Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged (to the extent the related commitment is
permanently reduced) with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale), (3) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an
acquisition of assets, including any Investment in a Restricted Subsidiary or
any acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness and including the pro forma expenses and cost
reductions calculated on a basis consistent with Regulation S-X of the
Securities Act) as if such Investment or acquisition occurred on the first day
of such period and without regard to clause (ii) of the definition of
Consolidated Net Income and (4) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made any Asset Disposition or any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (2) or (3) above if made by
the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition, Investment or acquisition
of assets occurred on the first day of such period. For purposes of this
definition, whenever pro forma effect is to be given to a transaction, the pro
forma calculations shall be determined in good faith by a responsible financial
or accounting Officer of the Company. If any Indebtedness bears a floating rate
of interest and is being given pro forma effect, the interest expense on such
Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term as at the date of determination in
excess of 12 months).
6
"Consolidated Interest Expense" means, for any period, the
total consolidated cash and non-cash interest expense (excluding capitalized
interest) of the Company and its Restricted Subsidiaries determined in
accordance with GAAP, plus, to the extent incurred by the Company and its
Restricted Subsidiaries in such period but not included in such interest
expense, (i) interest expense attributable to Capitalized Lease Obligations and
imputed interest with respect to Attributable Debt, (ii) amortization of debt
discount and debt issuance cost (other than those debt discounts and debt
issuance costs incurred on the Issue Date), (iii) capitalized interest, (iv)
non-cash interest expense, (v) commissions, discounts and other fees and charges
attributable to letters of credit and bankers' acceptance financing, (vi)
interest actually paid by the Company or any Restricted Subsidiary under any
Guarantee of Indebtedness or other obligation of any other Person, (vii) net
costs associated with Hedging Obligations (or minus net gains associated with
Hedging Obligations), (viii) the product of (A) Preferred Stock dividends in
respect of all Preferred Stock of Restricted Subsidiaries and Disqualified Stock
of the Company held by Persons other than the Company or a Wholly- Owned
Subsidiary multiplied by (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 the Company, expressed as a decimal, in each case,
determined on a consolidated basis in accordance with GAAP and (ix) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than the Company) in connection with Indebtedness Incurred
by such plan or trust. For purposes of the foregoing, gross interest expense
shall be determined after giving effect to any net payments made or received by
the Company and its Restricted Subsidiaries with respect to Interest Rate
Agreements.
"Consolidated Net Income" means, for any period, without
duplication, the consolidated net income (loss) of the Company and its
Restricted Subsidiaries; provided, however, that there shall not be included in
such Consolidated Net Income: (i) any net income (loss) of any Person if such
Person is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in clause (iv) below, the Company's equity in the net
income of any such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in clause
(iii) below) and (B) the Company's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net Income, (ii)
any net income (loss) of any Person acquired by the Company or a Restricted
Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition, (iii) any net income (loss) of any Restricted
Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that (A)
subject to the limitations contained in (iv) below, the Company's equity in the
net income of any such Restricted Subsidiary for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash distributed
by such Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend (subject, in the case of a dividend that
could have been made to another Restricted Subsidiary, to the limitation
contained in this clause) and (B) the Company's equity in a net loss of any such
Person for
7
such period shall be included in determining such Consolidated Net Income, (iv)
any gain (but not loss) realized upon the sale or other disposition of any asset
of the Company or its Restricted Subsidiaries (including pursuant to any
Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the
ordinary course of business and any gain (but not loss) realized upon the sale
or other disposition of any Capital Stock of any Person, (v) any extraordinary
gain or loss, (vi) the cumulative effect of a change in accounting principles
and (vii) for purposes of clause (a)(3)(A) of Section 3.5, amounts otherwise
included in Consolidated Net Income that have the effect of reducing the
aggregate amount of Investments under clause (vii) of the definition of
Permitted Investments.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"Default" means any event or condition that is, or after
notice or passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in
Section 2.13.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors and assigns, or such other depository
institution hereinafter appointed by the Company.
"Designated Senior Indebtedness" means (i) the Bank
Indebtedness and the Senior Secured Notes and (ii) any other Senior Indebtedness
which, at the date of determination, has an aggregate principal amount of or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $25.0 million and is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock of such Person that by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable or exercisable) or
upon the happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible or
exchangeable for Indebtedness or Disqualified Stock or (iii) is redeemable at
the option of the holder thereof, in whole or in part, in each case on or prior
to 123 days after the Stated Maturity of the Securities; provided, that any
Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the Stated Maturity of the Notes shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Sections 3.7 and 3.9 and
such Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to Sections
3.7 and 3.9.
8
"EBITDA" means, for any period, the Consolidated Net Income
for such period, plus, without duplication and to the extent deducted in
calculating such Consolidated Net Income, (i) income tax expense, (ii)
Consolidated Interest Expense, (iii) depreciation expense, (iv) amortization of
intangibles and (v) other non-cash charges or non-cash losses (other than
non-cash charges to the extent they represent an accrual of or reserve for cash
charges in any future period or amortization of a prepaid expense that was paid
in a prior period), less, without duplication, non-cash items increasing
Consolidated Net Income of such Person 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); provided, that if any Restricted Subsidiary
is not directly or indirectly owned 100% by the Company, EBITDA shall be reduced
(to the extent not otherwise reduced in accordance with GAAP) by an amount equal
to (A) the amount of the EBITDA attributable to such Restricted Subsidiary
multiplied by (B) the quotient of (1) the number of shares of outstanding common
Equity Interests of such Restricted Subsidiary not owned directly or indirectly
by the Company on the last day of such period by the Company divided by (2) the
total number of shares of outstanding common Equity Interests of such Restricted
Subsidiary on the last day of such period.
"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 any public or private sale of common
stock of the Company (excluding Disqualified Stock), other than public offerings
with respect to the Company's common stock registered on Form S-8.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fiscal Year" means the fiscal year of the Company ending on
the Sunday closest to April 30 of each year or such other fiscal year as may be
determined by the Company and the Board of Directors and of which the Trustee
shall receive written notice pursuant to Section 3.21 hereof.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect on the Issue Date, including those set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
nonfinancial obligation of any other Person and any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
such other obligation of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities
9
or services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered in the Note Register.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Subsidiary at the time it becomes a Subsidiary. Any Indebtedness issued
at a discount (including Indebtedness on which interest is payable through the
issuance of additional Indebtedness) shall be deemed incurred at the time of
original issuance of the Indebtedness at the initial accreted amount thereof.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication): (i) the principal of and premium (if
any) in respect of indebtedness of such Person for borrowed money, (ii) the
principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto) (other
than obligations with respect to letters of credit securing obligations (other
than obligations described in clauses (i), (ii) and (v)) entered into in the
ordinary course of business of such Person to the extent that such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third business day following receipt by such Person
of a demand for reimbursement following payment on the letter of credit), (iv)
all obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except Trade Payables), which purchase price is due more
than six months after the date of placing such property in final service or
taking final delivery and title thereto or the completion of such services, (v)
all Capitalized Lease Obligations and Attributable Debt of such Person, (vi) the
redemption, repayment or other repurchase amount of such Person with respect to
any Disqualified Stock or, with respect to any Subsidiary of the Company, any
Preferred Stock (but excluding, in each case, any accrued dividends), (vii) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person; provided, however,
that the amount of Indebtedness of such Person shall be the lesser of (A) the
fair market value of such asset at such date of determination and (B) the amount
of such Indebtedness of such other Person, (viii) all Indebtedness of other
Persons to the extent Guaranteed by such Person and (ix) to the extent not
otherwise included in this definition, net Hedging Obligations of such Person
(such obligations to be equal at any time
10
to the termination value of such agreement or arrangement giving rise to such
Hedging Obligation that would be payable by such Person at such time).
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are, in conformity with GAAP, recorded as accounts receivable on
the balance sheet of the Company or its Restricted Subsidiaries) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary" and Section 3.5, (i) "Investment" shall include the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and (ii) any property transferred
to or from an Unrestricted Subsidiary shall be valued at its fair market value
at the time of such transfer, in each case as determined in good faith either by
the Board of Directors or Senior Management.
"Issue Date" means the date on which the Initial Notes are
originally issued.
"Legal Holiday" has the meaning ascribed to it in Section
10.8.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof, any option or other
agreement to sell, or any filing of, or any agreement to give any security
interest).
"Moody's" means Moody's Investors Service, Inc., and its
successors.
"Net Available Cash" from an Asset Disposition means cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any
11
other consideration received in the form of assumption by the acquiring Person
of Indebtedness or other obligations relating to the properties or assets that
are the subject of such Asset Disposition or received in any other non-cash
form) therefrom, in each case net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses incurred (including fees and
expenses of counsel, accountants and investment bankers), and all Federal,
state, provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness that is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon such assets, or
that must by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition, (iv) appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with the
assets disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition and (v) any portion of the
purchase price from an Asset Disposition placed in escrow (whether as a reserve
for adjustment of the purchase price, or for satisfaction of indemnities in
respect of such Asset Disposition); provided, however, that upon the termination
of such escrow, Net Available Cash shall be increased by any portion of funds
therein released to the Company or any Restricted Subsidiary.
"Net Cash Proceeds" means, with respect to any issuance or
sale of Capital Stock or Indebtedness, the cash proceeds of such issuance or
sale net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"Non-Recourse Indebtedness" means Indebtedness (i) as to which
neither the Company nor any of its Restricted Subsidiaries (a) provides credit
support pursuant to any undertaking, agreement or instrument that would
constitute Indebtedness or (b) is directly or indirectly liable and (ii) no
default with respect to which would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness of the Company or any of its Restricted
Subsidiaries to declare a default on such Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity.
"Note Guarantee" means any guarantee that may from time to
time be executed and delivered by a Restricted Subsidiary pursuant to Section
3.12.
"Note Guarantor" means any Subsidiary that has issued a Note
Guarantee.
"Note Register" means the register of Securities, maintained
by the Trustee, pursuant to Section 2.3.
"Offering Memorandum" means the Offering Memorandum dated
February 4, 1998 relating to the Initial Notes; provided that after the issuance
of Exchange Notes, all
12
references herein to "Offering Memorandum" with respect to the Exchange Notes
shall be deemed references to the prospectus relating to the Exchange Notes.
"Officer" means any of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, any Vice
President, the Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two or
more Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"Permitted Employee Payments" means Restricted Payments by the
Company or any Restricted Subsidiary in respect of (i) the repurchase of Capital
Stock by the Company or any Restricted Subsidiary from an employee of the
Company or any Restricted Subsidiary or their assigns, estates or heirs upon the
death, retirement or termination of such employee or (ii) loans or advances to
employees of the Company or any of its Subsidiaries made in the ordinary course
of business.
"Permitted Holders" means Joseph W. Luter, III or any Person
the majority of the equity interests of which is beneficially owned by Joseph W.
Luter, III.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary, the Company or a
Person that will, upon the making of such Investment, become a Restricted
Subsidiary; provided, however, that the primary business of such Restricted
Subsidiary is a Related Business, (ii) another Person if as a result of such
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; provided, however, that the primary business of such
Person is a Related Business, (iii) Temporary Cash Investments, (iv) receivables
owing to the Company or any Restricted Subsidiary, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances, (v) securities received as consideration in
Asset Dispositions made in compliance with Section 3.7 with the exception of
securities received as consideration for Asset Dispositions of any property,
plant, equipment or other facility closed and designated in accordance with
clause (a)(ii) of Section 3.7, (vi) Investments in existence on the Issue Date
(but not in excess of the amount of such Investments in existence on the Issue
Date without giving effect to increases or decreases attributable to accounting
for the net income of such Investments or subsequent changes in value), (vii)
any Investment by the Company or a Wholly-Owned Subsidiary in a Receivables
Entity or any Investment by a Receivables Entity in any other Person in
connection with a Qualified Receivables Transaction; provided that any
Investment in a Receivables Entity is in the form of a Purchase Money Note or an
Equity Interest and (viii) additional Investments in a Related Business having
an aggregate fair market value, taken together with all other
13
Investments made pursuant to this clause (viii) that are at that time
outstanding, not to exceed 15% of Total Assets at the time of such Investment
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value).
"Permitted Joint Venture" means any Person in which the
Company or a Restricted Subsidiary owns, directly or indirectly, an ownership
interest (other than a Subsidiary) and whose primary business is related,
ancillary or complementary to any of the businesses of the Company and its
Restricted Subsidiaries at the time of determination.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
that is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Private Exchange Securities" shall have the meaning set forth
in the Registration Rights Agreement.
"Purchase Money Note" means a promissory note of a Receivables
Entity evidencing a line of credit, which may be irrevocable, from the Company
or any Subsidiary of the Company in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note shall be repaid from cash
available to the Receivables Entity, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors and
amounts owing to such investors and amounts paid in connection with the purchase
of newly generated receivables.
"QIB" means any "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act).
"Qualified Receivables Transaction" means any transaction or
series of transactions that may be entered into by the Company or any of its
Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell,
convey or otherwise transfer to (a) a Receivables Entity (in the case of a
transfer by the Company or any of its Subsidiaries) and (b) any other Person (in
the case of a transfer by a Receivables Entity), or may grant a security
interest in, any accounts receivable (whether now existing or arising in the
future) of the Company or any of its Subsidiaries, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
14
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Receivables Entity" means a Wholly-Owned Subsidiary of the
Company (or another Person in which the Company or any Subsidiary of the Company
makes an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable and related assets) which engages in no activities
other than in connection with the financing of accounts receivable and which is
designated by the Board of Directors of the Company (as provided below) as a
Receivables Entity, (a) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which (i) is guaranteed by the Company or any
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 Subsidiary of
the Company in any way other than pursuant to Standard Securitization
Undertakings or (iii) subjects any property or asset of the Company or any
Subsidiary of the Company, directly or indirectly, contingently or otherwise, to
the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (b) with which neither the Company nor any Subsidiary of the
Company has any material contract, agreement, arrangement or understanding other
than on terms no less favorable to the Company or such Subsidiary than those
that might be obtained at the time from Persons that are not Affiliates of the
Company, other than fees payable in the ordinary course of business in
connection with servicing accounts receivable, and (c) to which neither the
Company nor any Subsidiary of the Company has any obligation to maintain or
preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Any such designation by the Board of
Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions.
"Recourse Indebtedness" means Indebtedness that is not
Non-Recourse Indebtedness.
"Refinancing Indebtedness" means Indebtedness that is Incurred
to refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances", and "refinanced"
shall have a correlative meaning) any Indebtedness existing on the Issue Date or
Incurred in compliance with the Indenture (including Indebtedness of the Company
that refinances Indebtedness of any Restricted Subsidiary (to the extent
permitted by the Indenture) and Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary (except that a Note
Guarantor shall not refinance Indebtedness of a Restricted Subsidiary that is
not a Note Guarantor)) including Indebtedness that refinances Refinancing
Indebtedness; provided, however, that (i) the Refinancing Indebtedness has a
Stated Maturity no earlier than the Stated Maturity of the Indebtedness being
refinanced, (ii) the Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Indebtedness being refinanced and (iii) such Refinancing
Indebtedness is Incurred in an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is equal to or less than
the aggregate principal amount
15
(or if issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced, plus fees, underwriting
discounts, premiums, unpaid accrued interest and other costs and expenses
incurred in connection with such Refinancing Indebtedness; provided further,
however, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Restricted Subsidiary that refinances Indebtedness of the Company or (y)
Indebtedness of the Company or a Restricted Subsidiary that refinances
Indebtedness of an Unrestricted Subsidiary.
"Registered Exchange Offer" shall have the meaning set forth
in the Registration Rights Agreement.
"Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated February 9, 1998, between the Company and
Chase Securities Inc.
"Related Business" means any business which is the same as or
related, complementary or ancillary to any of the businesses of the Company and
its Restricted Subsidiaries on the date of this Indenture.
"Representative" means the trustee, agent or representative
(if any) for an issue of Senior Indebtedness.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Period" means the 40 consecutive days beginning on
and including the later of (A) the day on which the Initial Notes are offered to
persons other than distributors (as defined in Regulation S under the Securities
Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement
Legend set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set
forth in clause (B) of Section 2.1(c), as applicable.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Revolving Credit Facilities" means the collective reference
to (i) the Five-Year Credit Agreement, dated as of July 15, 1997, among the
Company, the subsidiary guarantors thereto, the lenders party thereto and The
Chase Manhattan Bank, as administrative agent and (ii) the 364-Day Credit
Agreement dated as of July 15, 1997, among the Company, the subsidiary
guarantors thereto, the lenders party thereto and The Chase Manhattan Bank, as
administrative agent, each as may be amended, supplemented or modified from time
to time and any renewal, extension, refunding, restructuring, replacement or
refinancing thereof (whether with the original administrative agent and lenders
or another administrative agent or agents or one or more other lenders and
whether provided under the original Revolving Credit Facilities or one or more
other credit or other agreements or indentures).
16
"Sale/Leaseback Transaction" means any direct or indirect
arrangement relating to property now owned or hereafter acquired by the Company
or a Restricted Subsidiary whereby the Company or such Restricted Subsidiary
transfers such property to a Person and the Company or such Restricted
Subsidiary leases it from such Person, other than leases between the Company and
a Wholly-Owned Subsidiary or between Wholly-Owned Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the
Global Security (as appointed by the Depositary), or any successor Person
thereto and shall initially be the Trustee.
"Senior Indebtedness" means, whether outstanding on the Issue
Date or thereafter issued, (i) Bank Indebtedness and the Senior Secured Notes
and (ii) all other Indebtedness of the Company, including interest and fees
thereon, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that the obligations in respect
of such Indebtedness are not superior in right of, or are subordinated to,
payment to the Securities; provided, however, that Senior Indebtedness will not
include (1) any obligation of the Company to any Subsidiary, (2) any liability
for Federal, state, foreign, local or other taxes owed or owing by the Company,
(3) any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness, Guarantee or obligation of
the Company that is expressly subordinate or junior in right of payment to any
other Indebtedness, Guarantee or obligation of the Company, including any Senior
Subordinated Indebtedness and any Subordinated Indebtedness or (5) any Capital
Stock.
"Senior Management" means with respect to the Company or any
of its Subsidiaries, as the case may be, any one of the Chairman of the Board,
the Chief Executive Officer, the President and the Chief Operating Officer or
any combination of the foregoing.
"Senior Secured Notes" means collectively, the 6.24% Series A
Senior Secured Notes Due November 1, 1998, the 8.41% Series B Senior Secured
Notes Due August 1, 2006, the 8.34% Series C Senior Secured Notes Due August 1,
2003, the 9.80% Series D Senior Secured Notes Due August 1, 2003, the 10.75%
Series E Senior Secured Notes Due August 1, 2005, the 8.52% Series F Senior
Secured Notes Due August 1, 2006, the 9.85% Series G Senior Secured Notes Due
November 1, 2006 and the 8.41% Series H Senior Secured Notes Due August 1, 2004,
each issued pursuant to the Note Purchase Agreement, dated as of July
17
15, 1996, among the Company and each of the several purchasers named therein, as
the same may be amended, supplemented or otherwise modified from time to time.
"Senior Subordinated Indebtedness" means any Indebtedness that
is pari passu in right of payment to the Securities.
"Shelf Registration Statement" has the meaning ascribed
thereto in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that
is a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"S&P" means Standard & Poor's Ratings Service, a division of
The McGraw- Hill Companies, Inc., and its successors.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company which are reasonably customary in an accounts
receivable transaction.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer, unless such
contingency has occurred).
"Subordinated Indebtedness" means any Indebtedness of the
Company (whether outstanding on the date of this Indenture or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership or
joint venture interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person
or (ii) one or more Subsidiaries of such Person.
"Successor Company" shall have the meaning assigned thereto in
clause (i) of Section 4.1.
"Successor Guarantor" shall have the meaning assigned thereto
in clause (i) of Section 4.2.
"Temporary Cash Investments" means any of the following: (i)
any Investment in direct obligations (x) of the United States of America or any
agency thereof or obligations
18
Guaranteed by the United States of America or any agency thereof or (y) of any
foreign country recognized by the United States of America rated at least "A" by
S&P or "A-1" by Moody's, (ii) Investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company that is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America having capital and surplus
aggregating in excess of $250.0 million (or the foreign currency equivalent
thereof) and whose long-term debt is rated "A" by S&P or "A-1" by Moody's, (iii)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (i) or (ii) above entered into with
a bank meeting the qualifications described in clause (ii) above, (iv)
Investments in commercial paper, maturing not more than 270 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any Investment therein is made of "P-1" (or higher) according
to Moody's or "A-1" (or higher) according to S&P, (v) Investments in securities
with maturities of six months or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by S&P or "A" by Moody's and (vi) any money market deposit accounts
issued or offered by a domestic commercial bank or a commercial bank organized
and located in a country recognized by the United States of America, in each
case, having capital and surplus in excess of $250.0 million (or the foreign
currency equivalent thereof), or investments in money market funds complying
with the risk limiting conditions of Rule 2a-7 (or any short-term successor
rule) of the SEC, under the Investment Company Act of 1940, as amended.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act
of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb), as in effect from time to time.
"Total Assets" means, with respect to any Person, the total
consolidated assets of such Person and its Restricted Subsidiaries, as shown on
the recent balance sheet of such Person.
"Trade Payables" means, with respect to any Person, any
accounts payable or any indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary course of
business in connection with the acquisition of goods or services.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means such successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
19
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Restricted Subsidiary of the Company (including any newly acquired or newly
formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, the Company or any Restricted Subsidiary (except a Restricted Subsidiary
which upon such designation becomes an Unrestricted Subsidiary in accordance
with this Indenture); provided that (i) such designation would be permitted
under Section 3.5, (ii) no portion of the Indebtedness or any other obligation
(contingent or otherwise) of such Subsidiary (A) is Guaranteed by the Company or
any Restricted Subsidiary, (B) is Recourse Indebtedness or (C) subjects any
property or asset of the Company or any Restricted Subsidiary, directly or
indirectly, contingently or otherwise, to the satisfaction thereof, and (iii) no
default or event of default with respect to any Indebtedness of such Subsidiary
would permit any holder of any Indebtedness of the Company or any Restricted
Subsidiary to declare such Indebtedness of the Company or any Restricted
Subsidiary due and payable prior to its maturity. The Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
that immediately after giving effect to such designation (x) the Company could
Incur $1.00 of additional Indebtedness under Section 3.3(a) and (y) no Default
or Event of Default shall have occurred and be continuing. Any such designation
by the Board of Directors shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of the Board Resolution giving effect to such
designation and an Officers' Certificate that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of an entity means all classes of Capital Stock
of such entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company, 80% or more of the Capital Stock of which (other than directors'
qualifying shares) is owned directly or indirectly by the Company.
20
SECTION 1.2. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"................................... 3.8
"Agent Member"............................................ 2.1(d)
"Bankruptcy Law".......................................... 5.1
"Blockage Notice"......................................... 9.3
"covenant defeasance option".............................. 7.1(b)
"Custodian"............................................... 5.1
"Definitive Securities"................................... 2.1(e)
"Event of Default"........................................ 5.1
"Global Securities"....................................... 2.1(a)
"legal defeasance option"................................. 7.1(b)
"Offer" .................................................. 3.7(b)
"pay the Securities"...................................... 9.3
"Paying Agent"............................................ 2.3
"Payment Blockage Period"................................. 9.3
"Registrar"............................................... 2.3
"Regulation S"............................................ 2.1(a)
"Resale Restriction Termination Date"..................... 2.6
"Restricted Payment"...................................... 3.5
"Rule 144A"............................................... 2.1(a)
SECTION 1.3. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by the TIA reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
21
SECTION 1.4. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the issuer dated such date prepared in accordance
with GAAP; and
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE II
The Securities
SECTION 2.1. Form, Dating and Terms. (a) The Initial Notes
are being offered and sold by the Company pursuant to a Purchase Agreement,
dated February 4, 1998, between the Company and Chase Securities Inc. (the
"Purchase Agreement").
Initial Notes offered and sold to qualified institutional
buyers (as defined in Rule 144A under the Securities Act ("Rule 144A")) in the
United States of America (the "Rule 144A Notes") will be issued on the Issue
Date in the form of a permanent global Security substantially in the form of
Exhibit A, which is hereby incorporated by reference and expressly made a part
of this Indenture (the "Rule 144A Global Note"), deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Rule 144A Global Note may be
represented by more than one certificate, if so required by the Depositary's
rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Rule 144A Global Note may
from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Initial Notes offered and sold outside the United States of
America (the "Regulation S Note") in reliance on Regulation S under the
Securities Act ("Regulation S") shall be issued in the form of a permanent
global Security substantially in the form of Exhibit A (the "Regulation S Global
Note") deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The Regulation S Global Note may be represented by more than one
certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Regulation S Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Initial Notes resold to institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) in the
United States of America (the "Institutional Accredited Investor Note") will be
issued in the form of a permanent global Security substantially in the form of
Exhibit A (the "Institutional Accredited Investor Global Note") deposited with
the Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The Institutional
Accredited Investor Global Note may be represented by more than one certificate,
if so required by the Depositary's rules regarding the maximum principal amount
to be represented by a single certificate. The aggregate principal amount of the
Institutional Accredited Investor Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Exchange Notes exchanged for interests in the Rule 144A Note,
the Regulation S Note and the Institutional Accredited Investor Note will be
issued in the form of a permanent global Note substantially in the form set
forth in Exhibit B hereto, which is hereby incorporated by reference and
expressly made a part of this Indenture, deposited with the Trustee as
hereinafter provided, with the applicable legend set forth in Section 2.1(c)
hereof (the "Exchange Global Note"). The Exchange Global Note may be represented
by more than one certificate, if so required by the Depositary's rules regarding
the maximum principal amount to be represented by a single certificate.
The Rule 144A Global Note, the Regulation S Global Note, the
Exchange Global Note and the Institutional Accredited Investor Global Note are
sometimes collectively herein referred to as the "Global Securities."
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose in The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose pursuant to Section 2.3;
provided, however, that, at the option of the Company, each installment of
interest may be paid by (i) check mailed to addresses of the Persons entitled
23
thereto as such addresses shall appear on the Note Register or (ii) wire
transfer or other electronic funds transfer to an account located in the United
States maintained by the payee.
The Private Exchange Securities shall be in the form of
Exhibit A. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage, in addition to those set forth on Exhibits
A and B. The Company and the Trustee shall approve the forms of the Securities
and any notation, endorsement or legend on them. Each Security shall be dated
the date of its authentication. The terms of the Securities set forth in Exhibit
A and Exhibit B are part of the terms of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to be bound by such terms.
(b) Denominations. The Securities shall be issuable only in
fully registered form, without coupons, and only in denominations of $1,000 and
any integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial Note
is sold under an effective registration statement or (ii) an Initial Note is
exchanged for an Exchange Note in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement, (A) such
Rule 144A Global Note and the Institutional Accredited Investor Global Note
shall bear the following legend (the "Private Placement Legend") on the face
thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL
24
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF
SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER
OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (ii) PURSUANT TO CLAUSE (E), TO
REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUSTEE A LETTER FROM THE
TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING
MEMORANDUM DATED FEBRUARY 4, 1998. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH HEREON RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."; and
(B) the Regulation S Global Note shall bear the following
legend (the "Regulation S Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A
U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND
IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
25
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (ii) PURSUANT
TO CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUSTEE A
LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE
OFFERING MEMORANDUM DATED FEBRUARY 4, 1998. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH HEREON RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND
INCLUDING THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE OFFERED
TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B)
THE DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.".
The Global Securities, whether or not an Initial Note, shall
bear the following legend on the face thereof:
26
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF."
(d) Book-Entry Provisions. (i) This Section 2.1(d) shall apply
only to Global Securities deposited with the Trustee, as custodian for the
Depositary.
(ii) Each Global Security initially shall (x) be registered in
the name of the Depositary for such Global Security or the nominee of such
Depositary, (y) be delivered to the Trustee as custodian for such Depositary and
(z) bear legends as set forth in Section 2.1(c).
(iii) Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary or by the Trustee as the
custodian of the Depositary or under such Global Security, and the Depositary
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the
beneficial interest in a Global Security pursuant to subsection (e) of this
Section to beneficial owners who are required to hold Definitive Securities (as
defined below), the Security Trustee shall reflect on its books and records the
date and a decrease in the principal amount of such Global Security in an amount
equal to the principal amount of the beneficial interest in the Global Security
to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Definitive Securities of like tenor and
amount.
27
(v) In connection with the transfer of an entire Global
Security to beneficial owners pursuant to subsection (e) of this Section, such
Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations.
(e) Definitive Securities. Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("Definitive Securities"). If required to do so pursuant
to any applicable law or regulation, beneficial owners may obtain Definitive
Securities in exchange for their beneficial interests in a Global Security upon
written request in accordance with the Depositary's and the Registrar's
procedures. In addition, Definitive Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or the Depositary
ceases to be a clearing agency registered under the Exchange Act, at a time when
the Depositary is required to be so registered in order to act as Depositary,
and in each case a successor depositary is not appointed by the Company within
90 days of such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Security shall
be so exchangeable or (iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depositary.
(f) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d)(iv) and (v) shall,
except as otherwise provided by paragraph (c) of Section 2.6, bear the
applicable legend regarding transfer restrictions applicable to the Definitive
Security set forth in Section 2.1(c).
(g) The registered holder of a Global Security may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
SECTION 2.2. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. If an
Officer whose signature is on a Security no longer holds that office at the time
the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually authenticates the Security. The signature of the Trustee on
a Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Trustee shall authenticate and make available
for delivery: (1) Initial Notes for original issue in an aggregate principal
amount of $200.0 million and (2) Exchange Notes for
28
issue only in a Registered Exchange Offer pursuant to the Registration Rights
Agreement, and only in exchange for Initial Notes of an equal principal amount,
in each case upon a written order of the Company signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company (the "Company Order"). Such Company Order shall specify the amount of
the Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Notes or Exchange Notes. The aggregate principal amount of Securities
outstanding at any time may not exceed $200.0 million except as provided in
Section 2.9.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent.
In case the Company or any Note Guarantor (if any), pursuant
to Article IV, shall be consolidated or merged with or into any other Person or
shall convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
such Note Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article IV, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Securities as specified in such order for the purpose
of such exchange. If Securities shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section 2.2 in exchange
or substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Securities at the time outstanding for
Securities authenticated and delivered in such new name.
SECTION 2.3. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Company shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Note
Register"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent.
29
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 6.7. The
Company or any of its domestically incorporated Wholly-Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent for the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. By at least
10:00 a.m (New York City time) on the date on which any principal of or interest
on any Security is due and payable, the Company shall deposit with the Paying
Agent a sum sufficient to pay such principal or interest when due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that such Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by such Paying Agent for the payment of principal of
or interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
(other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money delivered to the Trustee. Upon any
bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange.
(a) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A Note or an Institutional Accredited Investor
Note prior to the date which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto) (the "Resale
Restriction Termination Date"):
(i) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a QIB
shall be made upon the representation of the transferee that it is
purchasing the Security for its own account or an account with
30
respect to which it exercises sole investment discretion and that it
and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations
in order to claim the exemption from registration provided by Rule
144A;
(ii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to an
institutional accredited investor shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set
forth in Section 2.7 hereof from the proposed transferee and, if
requested by the Company or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them; and
(iii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 2.7 hereof
from the proposed transferee and, if requested by the Company or the
Trustee, the delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
(i) a transfer of a Regulation S Note or a beneficial
interest therein to a QIB shall be made upon the representation of the
transferee that it is purchasing the Security for its own account or an
account with respect to which it exercises sole investment discretion
and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial
interest therein to an institutional accredited investor shall be made
upon receipt by the Trustee or its agent of a certificate substantially
in the form set forth in Section 2.7 hereof from the proposed
transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them; and
(iii) a transfer of a Regulation S Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set
forth in Section 2.8 hereof from the proposed transferee
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and, if requested by the Company or the Trustee, receipt by the Trustee
or its agent of an opinion of counsel, certification and/or other
information satisfactory to each of them.
After the expiration of the Restricted Period, interests in
the Regulation S Note may be transferred without requiring certification set
forth in Section 2.8 or any additional certification.
(c) Restricted Securities Legend. Upon the transfer, exchange
or replacement of Securities not bearing a Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear a Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Restricted Securities Legend, the Registrar shall deliver only Securities that
bear such Restricted Securities Legend unless there is delivered to the
Registrar an Opinion of Counsel to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(d) The Security Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.1 or
this Section 2.6. The Company shall have the right to inspect and make copies of
all such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Security Registrar.
(e) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges,
the Company shall, subject to the other terms and conditions of this
Article II, execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charges payable upon
exchange or transfer pursuant to Sections 3.7, 3.9 or 8.5).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning (1) 15 Business Days before the mailing of a notice of an
offer to repurchase Securities and ending at the close of business on
the day of such mailing or (2) 15 Business Days before an interest
payment date and ending on such interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
32
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(f) No Obligation of the Trustee. (i) The Trustee shall have
no responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, the Depositary or other Person with respect to
the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depositary) of any notice or
the payment of any amount or delivery of any Securities (or other security or
property) under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
in respect of the Securities shall be given or made only to or upon the order of
the registered Holders (which shall be the Depositary or its nominee in the case
of a Global Security). The rights of beneficial owners in any Global Security
shall be exercised only through the Depositary subject to the applicable rules
and procedures of the Depositary. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depositary with respect
to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between or
among Depositary participants, members or beneficial owners in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
SECTION 2.7. Form of Certificate to be Delivered in
Connection with Transfers to Institutional Accredited Investors.
[Date]
Smithfield Foods, Inc.
c/o SunTrust Bank, Atlanta
58 Edgewood Avenue
Room 400-Annex
Atlanta, George 30303
Attention: Corporate Trust Department
33
Dear Sirs:
This certificate is delivered to request a transfer of $
principal amount of the 7 5/8% Senior Subordinated Notes due 2008 (the "Notes")
of Smithfield Foods, Inc. (the "Company").
Upon transfer, the Notes would be registered in the name of
the new beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act")) purchasing for our own account or for the account of
such an institutional "accredited investor" at least $250,000 principal amount
of the Notes, and we are acquiring the Notes not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act. We
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Notes and we
invest in or purchase securities similar to the Notes in the normal course of
our business. We and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.
2. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date which is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement which has been declared effective under
the Securities Act ("Rule 144A"), (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Notes of $250,000 or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any
34
requirement of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control and in
compliance with any applicable state securities laws. The foregoing restrictions
on resale will not apply subsequent to the Resale Restriction Termination Date.
If any resale or other transfer of the Notes is proposed to be made pursuant to
clause (e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Company and the Trustee, which shall provide, among other
things, that the transferee is an institutional "accredited investor" (within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and
that it is acquiring such Notes for investment purposes and not for distribution
in violation of the Securities Act. Each purchaser acknowledges that the Company
and the Trustee reserve the right prior to any offer, sale or other transfer
prior to the Resale Termination Date of the Notes pursuant to clauses (d), (e)
or (f) above to require the delivery of an opinion of counsel, certifications
and/or other information satisfactory to the Company and the Trustee.
TRANSFEREE:_____________________
BY______________________________
SECTION 2.8. Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Regulation S.
[Date]
Smithfield Foods, Inc.
c/o SunTrust Bank, Atlanta
58 Edgewood Avenue
Room 400-Annex
Atlanta, George 30303
Attention: Corporate Trust Department
Re: Smithfield Foods, Inc.
7 5/8% Senior Subordinated Notes due 2008 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the Securities was not made to a person
in the United States;
35
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States or (ii) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may
be.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________________ _______________________________
Authorized Signature Signature Medallion Guaranteed
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities.
If a mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss that any of them may suffer if a Security is
replaced, then, in the absence of notice to the Company, any Note Guarantor or
the Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
36
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Note Guarantor and any
other obligor upon the Securities, whether or not the mutilated, destroyed, lost
or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding in
the event the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.9, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Securities
maturing and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.11. Temporary Securities. Until Definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of Definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate Definitive Securities.
After the preparation of Definitive Securities, the temporary Securities shall
be exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary
37
Securities, the Company shall execute, and the Trustee shall authenticate and
make available for delivery in exchange therefor, one or more Definitive
Securities representing an equal principal amount of Securities. Until so
exchanged, the Holder of temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as a holder of Definitive Securities.
SECTION 2.12. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel and return to the Company all Securities surrendered for registration of
transfer, exchange, payment or cancellation and deliver a certificate of such
destruction to the Company. The Company may not issue new Securities to replace
Securities it has paid or delivered to the Trustee for cancellation.
SECTION 2.13. Payment of Interest; Defaulted Interest.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any interest payment date shall be paid to the Person in whose
name such Security (or one or more predecessor Securities) is registered at the
close of business on the regular record date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 2.3.
Any interest on any Security which is payable, but is not paid
when the same becomes due and payable and such nonpayment continues for a period
of 30 days shall forthwith cease to be payable to the Holder on the regular
record date by virtue of having been such Holder, and such defaulted interest
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of
business on a Special Record Date (as defined below) for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date
(not less than 30 days after such notice) of the proposed payment (the
"Special Interest Payment Date"), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a record date (the "Special Record Date") for the
payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the Special Interest Payment Date
and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date, and in the name and at the expense
38
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Interest
Payment Date therefor to be given in the manner provided for in Section
10.2, not less than 10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor having been so
given, such Defaulted Interest shall be paid on the Special Interest
Payment Date to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14. Computation of Interest. Interest on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.
SECTION 2.15. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use).
ARTICLE III
Covenants
SECTION 3.1. Payment of Securities. The Company shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and interest
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
39
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 3.2. SEC Reports. Notwithstanding that the Company may
not remain subject to the reporting requirements of Section 13(a) or 15(d) of
the Exchange Act, the Company will file (if then permitted to do so) with the
SEC and provide (whether or not so filed with the SEC) the Trustee and
Securityholders and prospective Securityholders (upon request) within 15 days of
the date of filing with the SEC or, if not filed, on the date that such reports
would be required to be filed with the SEC if the Company was a reporting
company, with the annual reports and the information, documents and other
reports, which are specified in Sections 13 and 15(d) of the Exchange Act;
provided, however, that the Company shall provide one copy of the exhibits of
the foregoing to the Trustee and shall (upon request) provide additional copies
of such exhibits to any Securityholder or prospective Securityholder. The
Company shall also comply with the other provisions of TIA ss. 314(a).
SECTION 3.3. Limitation on Indebtedness. (a) The Company will
not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness
(including Acquired Indebtedness); provided, however, that the Company and its
Restricted Subsidiaries may Incur Indebtedness if on the date of the Incurrence
of such Indebtedness the Consolidated Coverage Ratio would be equal to or
greater than 2.00:1.00.
(b) Notwithstanding the foregoing paragraph (a), the Company
and its Restricted Subsidiaries may Incur the following Indebtedness:
(i) (A) Indebtedness of the Company Incurred pursuant to the
Revolving Credit Facilities and (B) the Incurrence by a Receivables
Entity of Indebtedness in a Qualified Receivables Transaction that is
nonrecourse to the Company or any Subsidiary of the Company (except for
Standard Securitization Undertakings) in an aggregate principal amount
for Indebtedness Incurred under clauses (A) and (B) outstanding at any
one time not to exceed the greater of (x) $400.0 million, less the
aggregate amount of all repayments of principal actually made under the
Revolving Credit Facilities since the Issue Date with Net Available
Cash from Asset Dispositions pursuant to clause (a)(iii)(A) of Section
3.7 and (y) the Borrowing Base;
(ii) the incurrence by the Company of Indebtedness represented
by the Securities;
(iii) Indebtedness (A) of the Company to any Wholly-Owned
Subsidiary and (B) of any Restricted Subsidiary to the Company or any
other Wholly-Owned Subsidiary; provided, however, that any subsequent
issuance or transfer of any Capital Stock or any other event that
results in any such Wholly-Owned Subsidiary ceasing to be a
Wholly-Owned Subsidiary or any other subsequent transfer of any such
Indebtedness (except to the Company or a Wholly-Owned Subsidiary) will
be deemed,
40
in each case, an Incurrence of Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(iv) any Indebtedness (other than the Indebtedness described
in clauses (i) or (iii) above) outstanding on the date of this
Indenture, including the Senior Secured Notes and the Guarantees
related thereto, and any Refinancing Indebtedness Incurred in respect
of any Indebtedness described in this clause (iv) or paragraph (a);
(v) Indebtedness represented by the Note Guarantees and
Guarantees of Indebtedness Incurred pursuant to clause (i) above;
(vi) Indebtedness in respect of performance, surety or appeal
bonds provided in the ordinary course of business;
(vii) Indebtedness under Hedging Obligations; provided,
however, that such Hedging Obligations are entered into for bona fide
hedging purposes of the Company or any Restricted Subsidiary in the
ordinary course of business;
(viii) Indebtedness (in addition to Indebtedness described in
clauses (i), (iii) and (iv)) of the Company or any Restricted
Subsidiary attributable to Capitalized Lease Obligations, or Incurred
to finance the acquisition, construction or improvement of fixed or
capital assets, or constituting Attributable Debt in respect of
Sale/Leaseback Transactions, in an aggregate principal amount at any
time outstanding not in excess of $50.0 million;
(ix) Indebtedness of a Restricted Subsidiary issued and
outstanding on or prior to the date on which such Restricted Subsidiary
was acquired by the Company (other than Indebtedness Incurred (A) as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company or (B)
otherwise in connection with, or in contemplation of, such acquisition)
and any Refinancing Indebtedness with respect thereto; provided,
however, that on the date of any such acquisition of a Restricted
Subsidiary, the Company shall have been able to Incur at least an
additional $1.00 of Indebtedness under paragraph (a) above after giving
effect to such acquisition; and
(x) Indebtedness (in addition to Indebtedness described in
clauses (i)-(ix)) in a principal amount which, when taken together with
the principal amount of all other Indebtedness Incurred pursuant to
this clause (x) and then outstanding, will not in the aggregate exceed
$50.0 million.
(c) Notwithstanding the foregoing, the Company will not Incur
any Indebtedness pursuant to the foregoing paragraph (b) if the proceeds thereof
are used, directly or indirectly, to refinance any Subordinated Indebtedness
unless such Indebtedness (i) will be subordinated to the Securities to at least
the same extent as such Subordinated Indebtedness and (ii) will not mature prior
to the Stated Maturity of the Indebtedness to be refinanced or
41
refunded, and the Average Life of such new Indebtedness is at least equal to the
remaining Average Life of the Indebtedness to be refinanced or refunded.
(d) The Company will not permit any Unrestricted Subsidiary to
Incur any Indebtedness other than Non-Recourse Indebtedness; provided, however,
if any such Indebtedness ceases to be Non-Recourse Indebtedness, such event
shall be deemed to constitute an Incurrence of Indebtedness by the Company or a
Restricted Subsidiary.
(e) For purposes of determining compliance with this Section
3.3, in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described in the above clauses, the Company, in
its sole discretion, shall classify such item of Indebtedness at the time of
Incurrence and only be required to include the amount and type of such
Indebtedness in one of such clauses.
SECTION 3.4. Limitation on Layering. The Company will not, and
will not permit any Note Guarantor, if any, to, directly or indirectly, Incur
any Indebtedness (including Acquired Indebtedness) if such Indebtedness is
subordinate in right of payment to any Senior Indebtedness or any Indebtedness
of any Note Guarantor, as the case may be, unless such Indebtedness is either
(a) Senior Subordinated Indebtedness or (b) subordinate in right of payment to
the Securities.
SECTION 3.5. Limitation on Restricted Payments. (a) The
Company will not, and will not permit any Restricted Subsidiary, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company) except (x) dividends or
distributions payable solely in its Capital Stock (other than Disqualified
Stock) and (y) dividends or distributions payable to the Company or any of its
Subsidiaries (and, if such Subsidiary is not directly or indirectly owned 100%
by the Company, to its other stockholders on a pro rata basis), (ii) purchase,
redeem, retire or otherwise acquire for value any Capital Stock of the Company
or any Restricted Subsidiary held by Persons other than the Company or any of
its Subsidiaries, (iii) purchase, repurchase, redeem, prepay interest, defease
or otherwise acquire or retire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated Indebtedness
(other than the purchase, repurchase or other acquisition of Subordinated
Indebtedness purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of the
date of acquisition) or (iv) make any Restricted Investment in any Person (any
such dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment referred to in clauses (i) through (iv)
being herein referred to as a "Restricted Payment"), if at the time the Company
or such Restricted Subsidiary makes such Restricted Payment: (1) a Default shall
have occurred and be continuing (or would result therefrom); (2) the Company
could not Incur at least an additional $1.00 of Indebtedness under paragraph (a)
of Section 3.3; or (3) the aggregate amount of such Restricted Payment and all
other Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Company's Board of Directors, whose
determination shall be conclusive and evidenced by a resolution of the Company's
Board of Directors) declared or made subsequent to the date of this Indenture
42
would exceed the sum of: (A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) commencing on the Issue Date to
the end of the most recent fiscal quarter ending prior to the date of such
Restricted Payment as to which financial results are available (but in no event
ending more than 135 days prior to the date of such Restricted Payment) (or, in
case such Consolidated Net Income shall be a deficit, minus 100% of such
deficit); (B) the aggregate Net Cash Proceeds received by the Company from the
issuance or sale of its Capital Stock (other than Disqualified Stock) or other
cash capital contributions subsequent to the Issue Date (other than an issuance
or sale to a Subsidiary of the Company and other than an issuance or sale to an
employee stock ownership plan or other trust established by the Company or any
of its Subsidiaries for the benefit of their employees to the extent the
purchase by such plan or trust is financed by Indebtedness of such plan or trust
and for which the Company or any Restricted Subsidiary is the lender or is
liable as guarantor or otherwise); (C) the sum of (i) the amount by which
Indebtedness of the Company is reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Subsidiary of the Company) subsequent to
the Issue Date, of any Indebtedness of the Company or its Restricted
Subsidiaries convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any cash or other
property (other than Capital Stock) distributed by the Company upon such
conversion or exchange) and (ii) the aggregate Net Cash Proceeds received by the
Company (less any contingent amounts that the Company may be required to refund
or return) upon the conversion or exchange (other than by a Subsidiary of the
Company) subsequent to the Issue Date of any Indebtedness of the Company or its
Restricted Subsidiaries convertible or exchangeable for Capital Stock (other
than Disqualified Stock); (D) the amount equal to the net reduction in
Investments in Unrestricted Subsidiaries resulting from (i) repayments of loans
or advances or other transfers of assets to the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries or (ii) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary, which
amount was treated as a Restricted Payment (and, with respect to clauses (i) and
(ii), without duplication of any amounts included in Consolidated Net Income);
and (E) to the extent that any Restricted Investment that was made after the
Issue Date is sold for cash or otherwise liquidated or repaid for cash, the
lesser of (A) the net proceeds of such sale, liquidation or repayment and (B)
the net book value of such Restricted Investment.
(b) So long as there is no Default or Event of Default
continuing, the provisions of the foregoing paragraph (a) will not prohibit: (i)
any purchase, defeasance or redemption of Capital Stock or Subordinated
Indebtedness of the Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
of the Company or an employee stock ownership plan or other trust established by
the Company or any of its Subsidiaries for the benefit of their employees to the
extent the purchase by such plan or trust is financed by Indebtedness by such
plan or trust and for which the Company or any Restricted Subsidiary is the
lender or is liable as a guarantor or otherwise); provided, however, that (A)
such purchase, defeasance or redemption shall be excluded in subsequent
calculations of the amount of Restricted Payments and (B) the Net
43
Cash Proceeds from such sale of Capital Stock shall be excluded in calculations
under clause (3) (B) of Section 3.5(a); (ii) any purchase, defeasance or
redemption of Subordinated Indebtedness made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated Indebtedness of
the Company that is Refinancing Indebtedness; provided, however, that (A) such
Indebtedness is subordinated to the Senior Indebtedness and the Securities at
least to the same extent as such Subordinated Indebtedness so purchased or
redeemed and (B) such purchase, defeasance or redemption shall be excluded in
subsequent calculations of the amount of Restricted Payments; (iii) dividends
paid within 60 days after the date of declaration thereof if at such date of
declaration such dividend would have complied with the requirements of Section
3.5(a); provided, however, that such dividend shall be included in subsequent
calculations of the amount of Restricted Payments; (iv) any repurchase of an
Equity Interest deemed to occur upon exercise of stock options if such Equity
Interests represent a portion of the exercise price of such options; (v)
Permitted Employee Payments in an aggregate amount not in excess of $5.0
million; provided, however, that such payments shall be included in the
calculation of Restricted Payments; or (vi) the repurchase of common Equity
Interests of Brown's of Carolina, Inc. outstanding but not owned by the Company
on the Issue Date.
SECTION 3.6. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any other Restricted Subsidiary, (ii) make any loans or advances to
the Company or any other Restricted Subsidiary or (iii) transfer any of its
property or assets to the Company or any other Restricted Subsidiary; except:
(a) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on the Issue Date, including pursuant to this Indenture, the
Revolving Credit Facilities and the Senior Secured Notes; (b) any encumbrance or
restriction with respect to a Restricted Subsidiary pursuant to an agreement
relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the
date on which such Restricted Subsidiary was acquired by the Company (other than
Indebtedness Incurred as consideration in, or to provide all or any portion of
the funds or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and outstanding on such
date; (c) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement effecting a refinancing of Indebtedness Incurred
pursuant to an agreement referred to in the preceding clauses (a) or (b) or this
clause (c) or contained in any amendment to an agreement referred to in the
preceding clauses (a) or (b) or this clause (c); provided, however, that the
encumbrances and restrictions contained in any such refinancing agreement or
amendment are no less favorable to the Holders of the Securities taken as a
whole, than the original encumbrances and restrictions contained in such
agreements; (d) in the case of clause (iii) of this Section 3.6, any encumbrance
or restriction (A) that restricts in a customary manner the subletting,
assignment or transfer of any property or asset that is subject to a lease,
license or similar contract, (B) by virtue of any transfer of, agreement to
transfer, option or right with respect to, any property or assets of the Company
or any Restricted Subsidiary not otherwise prohibited by this Indenture, (C)
contained in
44
security agreements securing Indebtedness of a Restricted Subsidiary to the
extent such encumbrance or restrictions restrict the transfer of the property
subject to such security agreements and (D) ordinary course provisions
restricting the assignability of contracts; (e) any restriction with respect to
the Company or a Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of all or substantially all the Capital Stock
or assets of the Company or such Restricted Subsidiary pending the closing of
such sale or disposition; (f) restrictions created in connection with a
Qualified Receivables Transaction that, in the good faith determination of the
Board of Directors, are necessary to effect such Qualified Receivables
Transaction; provided that such restrictions apply only to such Receivables
Entity; and (g) any restriction by operation of applicable law.
SECTION 3.7. Limitation on Sales of Assets and Subsidiary
Stock. (a) The Company will not, and will not permit any Restricted Subsidiary
to, make any Asset Disposition unless (i) the Company or such Restricted
Subsidiary receives consideration (including by way of relief from, or by any
other Person assuming sole responsibility for, any liabilities, contingent or
otherwise) at the time of such Asset Disposition at least equal to the fair
market value of the shares and assets subject to such Asset Disposition (as
determined in good faith by the management of the Company, or if such Asset
Disposition involves consideration in excess of $20.0 million, by a resolution
of the Board of Directors set forth in an Officers' Certificate delivered to the
Trustee), (ii) at least 75% of the consideration thereof received by the Company
or such Restricted Subsidiary is in the form of cash and/or Cash Equivalents
(except such requirement of cash and/or Cash Equivalents shall not apply to any
property, plant, equipment or other facility closed and designated as unused,
idle or obsolete by either Senior Management or by resolution of the Board of
Directors, and in either case set forth in an Officers' Certificate delivered to
the Trustee) and (iii) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such Restricted Subsidiary,
as the case may be) as follows: (A) first, to the extent the Company or such
Restricted Subsidiary elects (or is required by the terms of Senior
Indebtedness), to prepay, repay or purchase Senior Indebtedness (and to
correspondingly reduce commitments with respect thereto) within 365 days after
the date of such Asset Disposition; (B) second, to the extent of the balance of
Net Available Cash after application in accordance with clause (A), to the
extent the Company or such Restricted Subsidiary elects, to reinvest in
Additional Assets (including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary) within 365 days from the date of such Asset Disposition;
(C) third, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A) and (B), to make an offer to purchase
Securities and Senior Subordinated Indebtedness with similar asset sale
provisions, pro rata at 100% of the tendered principal amount thereof (or 100%
of the accreted value of such other Senior Subordinated Indebtedness so
tendered, if such Senior Subordinated Indebtedness was offered at a discount)
plus accrued and unpaid interest, if any, thereon to the purchase date and (D)
fourth, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A), (B) and (C) above, to fund (to the
extent consistent with any other applicable provision of the Indenture) any
corporate purpose; provided, however, that in connection with any prepayment,
repayment or purchase of Indebtedness pursuant to clause (A) or (C) above, the
Company or such Restricted Subsidiary will retire such Indebtedness and will
cause the
45
related loan commitment (if any) to be permanently reduced in an amount equal to
the principal amount so prepaid, repaid or purchased. Notwithstanding the
foregoing provisions, the Company and the Restricted Subsidiaries shall not be
required to apply any Net Available Cash in accordance with this covenant except
to the extent that the aggregate Net Available Cash from all Asset Dispositions
that is not yet applied in accordance with this Section 3.7 at any time exceeds
$10.0 million.
For the purposes of this Section 3.7, the following will be
deemed to be cash: (x) the assumption of Indebtedness of the Company (other than
Disqualified Stock of the Company) or any Restricted Subsidiary and the release
of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition and (y) securities
received by the Company or any Restricted Subsidiary from the transferee that
are converted within 30 days by the Company or such Restricted Subsidiary into
cash. Upon the completion of the application of the Net Available Cash from any
Asset Disposition pursuant to this paragraph (a), the amount of Net Available
Cash attributable to such Asset Disposition shall be deemed to be zero.
(b) In the event of an Asset Disposition that requires the
purchase of Securities pursuant to Section 3.7(a)(iii)(C), the Company will be
required to apply such Excess Proceeds (as defined below) to the repayment of
the Securities and any other Senior Subordinated Indebtedness outstanding with
similar provisions requiring the Company to make an offer to purchase such
Indebtedness with the proceeds from any Asset Disposition as follows: (A) the
Company will make an offer to purchase (an "Offer") within ten days of such time
from all holders of the Securities in accordance with the procedures set forth
in this Indenture in the maximum principal amount (expressed as a multiple of
$1,000) of Securities that may be purchased out of an amount (the "Note Amount")
equal to the product of such Excess Proceeds multiplied by a fraction, the
numerator of which is the outstanding principal amount of the Securities and the
denominator of which is the sum of the outstanding principal amount of the
Securities and such Senior Subordinated Indebtedness and (B) to the extent
required by such Senior Subordinated Indebtedness to permanently reduce the
principal amount of such Senior Subordinated Indebtedness, the Company will make
an offer to purchase or otherwise repurchase or redeem Senior Subordinated
Indebtedness (a "Pari Passu Offer") in an amount equal to the excess of the
Excess Proceeds over the Note Amount at a purchase price of 100% of their
principal amount plus accrued and unpaid interest (or 100% of the accreted value
of such Senior Subordinated Indebtedness, if such Senior Subordinated
Indebtedness was offered at a discount) to the purchase date in accordance with
the procedures (including prorating in the event of oversubscription) set forth
in this Indenture with respect to the Offer and in the documentation governing
such Senior Subordinated Indebtedness with respect to the Pari Passu Offer. If
the aggregate purchase price of the Securities tendered pursuant to the Offer
and Pari Passu Offer is less than the Excess Proceeds, the remaining Excess
Proceeds will be available to the Company for use in accordance with clause
(a)(iii)(D) above. The Company shall not be required to make an Offer for
Securities pursuant to this Section 3.7 if the Net Available Cash available
therefor (after application of the proceeds as provided in clauses (a)(iii)(A)
and (a)(iii)(B)) above ("Excess Proceeds") is less than $10.0 million (which
lesser amounts shall be carried forward
46
for purposes of determining whether an Offer is required with respect to the Net
Available Cash from any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within 10 days after the
Company is required to make an Offer, the Company will deliver to the Trustee
and send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in whole
or in part (subject to prorating as hereinafter described in the event the Offer
is oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date").
(2) Not later than the date upon which such written notice of
an Offer is delivered to the Trustee and the Holders, the Company will deliver
to the Trustee an Officers' Certificate setting forth (i) the amount of the
Offer (the "Offer Amount"), (ii) the allocation of the Net Available Cash from
the Asset Dispositions as a result of which such Offer is being made and (iii)
the compliance of such allocation with the provisions of Section 3.7(a). Upon
the expiration of the period (the "Offer Period") for which the Offer remains
open, the Company shall deliver to the Trustee for cancellation the Securities
or portions thereof which have been properly tendered to and are to be accepted
by the Company. The Trustee shall, on the Purchase Date, mail or deliver payment
to each tendering Holder in the amount of the purchase price of the Securities
tendered by such Holder to the extent such funds are available to the Trustee.
(3) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice prior to the expiration of
the Offer Period. Each Holder will be entitled to withdraw its election if the
Trustee or the Company receives, not later than one Business Day prior to the
expiration of the Offer Period, a facsimile transmission or overnight mail from
such Holder setting forth the name of such Holder, the principal amount of the
Security or Securities which were delivered for purchase by such Holder and a
statement that such Holder is withdrawing his election to have such Security or
Securities purchased. If at the expiration of the Offer Period the aggregate
principal amount of Securities surrendered by Holders exceeds the Offer Amount,
the Company shall select the Securities to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part will be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(d) The Company will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 3.7. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.7, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue thereof.
47
SECTION 3.8. Limitation on Transactions with Affiliates. (a)
The Company will not, and will not permit any Restricted Subsidiary to, directly
or indirectly, enter into or conduct any transaction or series of transactions
(including the purchase, sale, lease or exchange of any property or assets or
the rendering of any service or the making of any Investment) with any Affiliate
of the Company (an "Affiliate Transaction") on terms: (i) that are less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
those that could be obtained at the time of such transaction in arm's-length
dealings with a Person who is not an Affiliate and (ii) that in the event such
Affiliate Transaction involves an aggregate amount in excess of $10.0 million,
are not in writing and have not been approved or negotiated and entered into on
behalf of the Company or such Restricted Subsidiary by Senior Management acting
pursuant to authorizing resolutions adopted by a majority of the members of the
Board of Directors or by a majority of the members of the Board of Directors
having no personal stake in such Affiliate Transaction (and such majority or
majorities, as the case may be, determines that such Affiliate Transaction
satisfies the criteria in clause (i) above). In addition, any Affiliate
Transaction involving aggregate payments or other transfers by the Company and
its Restricted Subsidiaries in excess of $20.0 million will also require an
opinion from an independent investment banking firm or appraiser, as
appropriate, of national prominence, to the effect that the terms of such
transaction are either (i) no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could be obtained at the time of
such transaction in arm's-length dealings with a Person who is not an Affiliate
or (ii) fair to the Company or such Restricted Subsidiary, as the case may be,
from a financial point of view.
(b) The provisions of Section 3.8(a) shall not prohibit (i) any
Restricted Payment or Permitted Investment permitted to be made pursuant to
Section 3.5, (ii) the performance of the Company's or Restricted Subsidiary's
obligations under any collective bargaining agreement, employee benefit plan,
related trust agreement or any other similar arrangement heretofore or hereafter
entered into in the ordinary course of business, (iii) payment of reasonable
fees and compensation to employees, officers or directors as determined in good
faith by the Company's Board of Directors or senior management (including
indemnification to the fullest extent permitted by applicable law, directors'
and officers' insurance and similar arrangements, employment contracts,
non-competition and confidentiality agreements and similar instruments or
payments) entered into in the ordinary course of business, (iv) maintenance in
the ordinary course of business of reasonable benefit programs or arrangements
for employees, officers or directors, including vacation plans, health and life
insurance plans, SERPs, split-dollar life insurance plans, deferred compensation
plans, and retirement or savings plans and similar plans as determined in good
faith by the Company's Board of Directors or Senior Management, (v) any
transaction between the Company and a Wholly-Owned Subsidiary or between
Wholly-Owned Subsidiaries, (vi) transactions effected as part of a Qualified
Receivables Transaction, (vii) any issuance by the Company of Capital Stock
(other than Disqualified Stock) or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans to the extent reasonable, as determined
in good faith by the Company's Board of Directors in the ordinary course of
business, and loans or advances to employees in the ordinary course of business
of the Company or its Restricted Subsidiaries consistent with past practices,
(viii) transactions with customers, suppliers, or purchasers or sellers of goods
48
or services, in each case, in the ordinary course of business and otherwise in
compliance with the terms of this Indenture which are fair to the Company or the
Restricted Subsidiaries or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated third party, in
the reasonable determination of the Board of Directors of the Company or the
Senior Management thereof, and (ix) any agreement as in effect on the Issue Date
or any amendment thereto (so long as any such amendment is not disadvantageous
to the holders of the Notes in any material respect).
SECTION 3.9. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require the Company to
repurchase all or any part of such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date).
(b) In the event that at the time of such Change of Control
the terms of any Indebtedness restrict or prohibit the repurchase of Securities
pursuant to Section 3.9(a), prior to the mailing of the notice to Holders
provided for in Section 3.9(c) but in any event within 30 days following any
Change of Control, the Company shall either (i) repay in full all Indebtedness
or offer to repay in full all such Indebtedness and repay the Indebtedness of
each lender who has accepted such offer or (ii) obtain the requisite consent
under the agreements governing such Indebtedness to permit the repurchase of the
Securities as provided for in Section 3.9(c). The Company will first comply with
the preceding sentence of this Section 3.9(b) before the Company will be
required to make the Change of Control Offer or to purchase the Securities
pursuant to this Section 3.9; provided, that compliance with this clause (b)
will not extend the time periods set forth in Section 3.9(c) for the Company to
make an offer to repurchase the Securities in connection with a Change of
Control.
(c) Subject to the provisions of Section 3.9(b), within 30
days following any Change of Control, the Company shall mail a notice (the
"Change of Control Offer") to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on a record date to
receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts and financial
information regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed) (the
"Change of Control Payment Date");
49
(4) that any Security not tendered will continue to accrue
interest pursuant to its terms;
(5) that, unless the Company defaults in the payment of the
purchase price, any Security accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest on and after the
Change of Control Payment Date; and
(6) the instructions determined by the Company, consistent
with this Section 3.9, that a Holder must follow in order to have its
Securities purchased or to cancel such order of purchase.
(d) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Each Holder will be entitled to withdraw its
election if the Company receives, not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter from such
Holder setting forth the name of such Holder, the principal amount of the
Security or Securities which were delivered for purchase by such Holder and a
statement that such Holder is withdrawing his election to have such Security or
Securities purchased.
(e) On or before the Change of Control Payment Date, the
Company shall: (i) accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Securities or portions thereof
so accepted and (iii) deliver, or cause to be delivered, to the Trustee, all
Securities or portions thereof so accepted together with an Officers'
Certificate specifying the Securities or portions thereof accepted for payment
by the Company. The Paying Agent shall promptly mail, to the Holders of
Securities so accepted, payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail to such Holders a new Security
equal in principal amount to any unpurchased portion of the Securities
surrendered; provided that each Security purchased and each new Security issued
shall be in a principal amount of $1,000 or integral multiples thereof.
(f) The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(g) The Company will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 3.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.9, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue thereof.
SECTION 3.10. Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries. The Company (i) will not, and will not permit
any Restricted Subsidiary to, transfer, convey, lease, sell or otherwise dispose
of any shares of Capital Stock
50
of a Restricted Subsidiary to any Person (other than to the Company or a
Wholly-Owned Subsidiary) and (ii) will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell any shares of its Capital Stock (other
than directors' qualifying shares) to any Person (other than to the Company or a
Wholly-Owned Subsidiary); provided, however, that (i) the Company is permitted
to sell all the Capital Stock of a Restricted Subsidiary as long as the Company
is in compliance with the terms of Section 3.7 and (ii) the Company is permitted
to sell less than all of the Capital Stock of a Restricted Subsidiary if (A)
immediately after giving effect to such sale such Restricted Subsidiary would no
longer constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect to such sale would have been permitted to be made
under Section 3.5 if made on the date of such issuance or sale and (B) the
Company is in compliance with the terms of Section 3.7.
SECTION 3.11. Limitation on Liens. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly create, incur, assume or suffer to exist any Lien that secures
obligations under any Senior Subordinated Indebtedness or Subordinated
Indebtedness on any asset or property of the Company or such Restricted
Subsidiary, or any income or profits therefrom, or assign or convey any right to
receive income therefrom, unless the Securities are equally and ratably secured
with the obligations so secured (or senior to, in the event the Lien relates to
a Subordinated Indebtedness) or until such time as such obligations are no
longer secured by a Lien.
(b) The Company will not permit any Note Guarantor to directly
or indirectly create, incur, assume or suffer to exist any Lien that secures
obligations under any Senior Subordinated Indebtedness or Subordinated
Indebtedness of such Note Guarantor on any asset or property of such Note
Guarantor or any income or profits therefrom, or assign or convey any right to
receive income therefrom, unless the Guarantee of such Note Guarantor is equally
and ratably secured with the obligations so secured (or senior to, in the event
the Lien relates to a Subordinated Indebtedness) or until such time as such
obligations are no longer secured by a Lien.
(c) Notwithstanding the foregoing, Liens on assets transferred
to a Receivables Entity or on assets of a Receivables Entity incurred in
connection with a Qualified Receivables Transaction will not require such equal
and ratable security.
SECTION 3.12. Limitation on Issuances of Guarantees of
Indebtedness by Restricted Subsidiaries. (a) The Company will not permit any
Restricted Subsidiary to guarantee the payment of any Indebtedness of the
Company or any Indebtedness of any other Restricted Subsidiary unless (i) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to the Indenture providing for a Guarantee of payment of the
Securities by such Restricted Subsidiary (a "Note Guarantee") except that with
respect to a guarantee of Indebtedness of the Company (A) if the Securities are
subordinated in right of payment to such Indebtedness, the Note Guarantee shall
be subordinated to such Restricted Subsidiary's guarantee with respect to such
Indebtedness substantially to the same extent as the Securities are subordinated
to such Indebtedness under this Indenture and (B) if such Indebtedness is by its
express terms subordinated in right of payment to the Securities, any such
guarantee of such Restricted Subsidiary with respect to such Indebtedness shall
be
51
subordinated in right of payment to such Restricted Subsidiary's Note Guarantee
with respect to the Securities substantially to the same extent as such
Indebtedness is subordinated to the Securities; (ii) such Restricted Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Note Guarantee; and (iii) such
Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the
effect that (A) such Note Guarantee has been duly executed and authorized and
(B) such Note Guarantee constitutes a valid, binding and enforceable obligation
of such Restricted Subsidiary, subject to bankruptcy, insolvency or similar laws
(including, without limitation, all laws relating to fraudulent transfers) and
general principles of equity; provided that this paragraph (a) shall not be
applicable to any guarantee of any Restricted Subsidiary (x) that (A) existed at
the time such Person became a Restricted Subsidiary and (B) was not incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary or (y) that guarantees the payment of obligations of the Company or
any Restricted Subsidiary under the Revolving Credit Facilities, the Senior
Secured Notes or any other Senior Indebtedness and any refunding, refinancing or
replacement thereof, in whole or in part; provided, further that such refunding,
refinancing or replacement thereof constitutes Senior Indebtedness and is not
incurred pursuant to a registered offering of securities under the Securities
Act or a private placement of securities (including under Rule 144A) pursuant to
an exemption from the registration requirements of the Securities Act, which
private placement provides for registration rights under the Securities Act (any
guarantee excluded by operations of this clause (y) being an "Excluded
Guarantee").
(b) Notwithstanding the foregoing and the other provisions of
this Indenture, any Note Guarantee by a Restricted Subsidiary shall provide by
its terms that it shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Company's Capital Stock in, or all or
substantially all the assets of, whether by way of merger, consolidation or
otherwise, such Restricted Subsidiary (which sale, exchange or transfer is not
prohibited by this Indenture), (ii) the release or discharge of the guarantee
which resulted in the creation of such Note Guarantee, except a discharge or
release by or as a result of payment under such guarantee or (iii) such
Restricted Subsidiary is designated an Unrestricted Subsidiary of the Company in
accordance with the terms of this Indenture by the Company's Board of Directors.
SECTION 3.13. Limitation on Lines of Business. The Company
will not, and will not permit any Restricted Subsidiary to, engage in any
business other than a Related Business.
SECTION 3.14. Maintenance of Office or Agency. The Company
will maintain in The City of New York, an office or agency where the Securities
may be presented or surrendered for payment, where, if applicable, the
Securities may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The corporate trust office of the Trustee, which
initially shall be located at SunTrust Bank, Atlanta c/o The First
52
Chicago Trust Company, 14 Wall Street, 8th Floor, New York, New York, 10005
Attention: Corporate Trust Department (the "Corporate Trust Office") shall be
such office or agency of the Company, unless the Company shall designate and
maintain some other office or agency for one or more of such purposes. The
Company will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Securities may be presented or surrendered for any or all such purposes and may
from time to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
SECTION 3.15. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of (or premium, if any) or interest on any
of the Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal of (or premium, if any)
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee in
writing of its action or failure to so act.
Whenever the Company shall have one or more Paying Agents for
the Securities, it will, on or before each due date of the principal of (or
premium, if any) or interest on any Securities, deposit with any Paying Agent a
sum in same day funds (or New York Clearing House funds if such deposit is made
prior to the date on which such deposit is required to be made) that shall be
available to the Trustee by 10:00 a.m. New York City time on such due date
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee in writing of such action
or any failure to so act.
The Company will cause each Paying Agent (other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Securities in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
53
(b) give the Trustee written notice of any default by the
Company (or any other obligor upon the Securities) in the making of any
payment of principal (and premium, if any) or interest; and
(c) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (or
premium, if any) or interest on any Security and remaining unclaimed for two
years after such principal, premium or interest has become due and payable shall
be paid to the Company on Company Order, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment to the Company, may at the expense of the
Company cause to be published once, in a leading daily newspaper (if
practicable, The Wall Street Journal (Eastern Edition)) printed in the English
language and of general circulation in New York City, 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 publication nor shall it be later than
two years after such principal (or premium, if any) or interest shall have
become due and payable, any unclaimed balance of such money then remaining will
be repaid to the Company.
SECTION 3.16. Corporate Existence. Subject to Article IV, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and that of each Restricted
Subsidiary and the corporate rights (charter and statutory) licenses and
franchises of the Company and each Restricted Subsidiary; provided, however,
that the Company shall not be required to preserve any such existence (except
the Company), right, license or franchise if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not, and will not
be, disadvantageous in any material respect to the Holders.
54
SECTION 3.17. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all material taxes, assessments and governmental charges
levied or imposed upon the Company or any Subsidiary or upon the income, profits
or property of the Company or any Subsidiary and (ii) all lawful claims for
labor, materials and supplies, which, if unpaid, might by law become a material
liability or lien upon the property of the Company or any Restricted Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate reserves, if necessary (in the
good faith judgment of management of the Company) are being maintained in
accordance with GAAP.
SECTION 3.18. Maintenance of Properties. The Company will
cause all material properties owned by the Company or any Restricted Subsidiary
or used or held for use in the conduct of its business or the business of any
Restricted Subsidiary to be maintained and kept in normal condition, repair and
working order and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the maintenance of any of such properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business or the business of any Restricted Subsidiary and not adverse in
any material respect to the Holders.
SECTION 3.19. Insurance. To the extent available at
commercially reasonable rates, the Company will maintain, and will cause its
Restricted Subsidiaries to maintain, insurance with responsible carriers against
such risks and in such amounts, and with such deductibles, retentions,
self-insured amounts and co-insurance provisions, as are customarily carried by
similar businesses, of similar size in their country of organization, including
professional and general liability, property and casualty loss, workers'
compensation and interruption of business insurance. In the event the Company
determines that insurance satisfying the first sentence of this Section 3.19 is
not available at commercially available rates, it shall provide an Officer's
Certificate to such effect to the Trustee and the Trustee may conclusively rely
on the determinations set forth therein.
SECTION 3.20. Compliance with Laws. The Company shall comply,
and shall cause each of its Restricted Subsidiaries to comply, with all
applicable statutes, rules, regulations, orders and restrictions of the United
States of America, all states and municipalities thereof, and of any
governmental regulatory authority, in respect of the conduct of their respective
businesses and the ownership of their respective properties, except for such
noncompliances as would not in the aggregate have a material adverse effect on
the financial condition or results of operations of the Company and its
Restricted Subsidiaries, taken as a whole.
SECTION 3.21. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each Fiscal Year of the
Company an Officers'
55
Certificate stating that in the course of the performance by the signers of
their duties as Officers of the Company they would normally have knowledge of
any Default or Event of Default and whether or not the signers know of any
Default or Event of Default that occurred during such period. If they do, the
certificate shall describe the Default or Event of Default, its status and what
action the Company is taking or proposes to take with respect thereto. The
Company also shall comply with TIA ss. 314(a)(4). The Officer's Certificate
shall also notify the Trustee should the then current Fiscal Year be changed to
end on any date other than on the date as herein defined.
SECTION 3.22. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE IV
Successor Company and Successor Guarantor
SECTION 4.1. When Company May Merge or Otherwise Dispose of
Assets. The Company will not, in a single transaction or series of related
transactions, consolidate with or merge with or into, or convey, transfer, lease
or otherwise dispose of all or substantially all its assets to, any Person nor
permit any Person to merge with or into the Company, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") will be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) will
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this Indenture;
(ii) immediately before and after giving effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor Company or any Restricted Subsidiary as a result of
such transaction as having been Incurred by the Successor Company or
such Restricted Subsidiary at the time of such transaction), no Default
or Event of Default will have occurred and be continuing;
(iii) immediately after giving effect to such transaction,
the Successor Company would be able to Incur an additional $1.00 of
Indebtedness under paragraph (a) of Section 3.3;
(iv) each Note Guarantor, if any, shall have delivered a
written instrument in form and substance satisfactory to the Trustee
confirming its Note Guarantee; and
56
(v) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transactions or series of
transactions) of all or substantially all of the properties and assets of one or
more Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
The Successor Company shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but the predecessor Company in the case of a conveyance, transfer,
lease of all or substantially all its assets will not be released from the
obligation to pay the principal of and interest on the Securities. Solely for
the purpose of computing amounts described in clause 3(A) of Section 3.5(a), the
Successor Company shall only be deemed to have succeeded and be substituted for
the Company with respect to periods subsequent to the effective time of such
merger, consolidation, combination or transfer of assets.
Notwithstanding clauses (ii) and (iii) of the first sentence
of this Section 4.1: (1) any Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company and (2)
the Company may merge with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction to realize tax or other
benefits.
SECTION 4.2. When a Note Guarantor May Merge or Otherwise
Dispose of Assets. Subject to Section 3.12(b), the Company will not permit any
Note Guarantor, if any, to, in a single transaction or series of related
transactions, consolidate with or merge with or into, or convey, transfer or
lease or otherwise dispose of all or substantially all its assets to, any Person
nor permit any Person to merge with or into such Note Guarantor, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Guarantor") will be a Person organized and existing under
the laws of the United States of America, any State thereof or the
District of Columbia and the Successor Guarantor (if not the Note
Guarantor) will expressly assume in writing all the obligations of such
Note Guarantor under such Note Guarantor's respective Note Guarantee;
(ii) immediately before and after giving effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor Guarantor or any Restricted Subsidiary as a result of
such transaction as having been Incurred by the Successor Guarantor or
such Restricted Subsidiary at the time of such transaction), no Default
or Event of Default will have occurred and be continuing;
57
(iii) immediately after giving effect to such transaction,
the Company would be able to Incur an additional $1.00 of Indebtedness
under paragraph (a) of Section 3.3;
(iv) each other Note Guarantor shall have delivered a
written instrument in form and substance satisfactory to the Trustee
confirming its Note Guarantee; and
(v) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such assumption of the Note
Guarantee, if applicable, comply with this Indenture.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of one or
more Subsidiaries of such Note Guarantor, the Capital Stock of which constitutes
all or substantially all of the properties and assets of such Note Guarantor,
shall be deemed to be the transfer of all or substantially all of the properties
and assets of such Note Guarantor.
The Successor Guarantor shall succeed to, and be substituted
for, and may exercise every right and power of, the Note Guarantor under this
Indenture and the relevant Note Guarantee, but the predecessor Note Guarantor in
the case of a conveyance, transfer or lease of all or substantially all its
assets will not be released from its obligations under the Note Guarantee.
Notwithstanding clauses (ii) and (iii) of the first sentence
of this Section 4.2, any Subsidiary of the Note Guarantor (which Subsidiary is a
Restricted Subsidiary) may consolidate with, merge into or transfer all or part
of its properties and assets to the Note Guarantor.
ARTICLE V
Defaults and Remedies
SECTION 5.1. Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article IX, and such default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of or
premium, if any, on any Security when the same becomes due and payable
at its Stated Maturity, upon required repurchase, upon declaration or
otherwise, whether or not such payment shall be prohibited by Article
IX;
(3) the Company fails to comply with Article IV;
58
(4) the Company fails to comply with Section 3.2, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12 and 3.13 (in each case other
than a failure to repurchase Securities when required pursuant to
Section 3.7 or 3.9, which failure shall constitute an Event of Default
under Section 5.1(2)) and such failure continues for 30 days after the
notice specified below;
(5) the Company defaults in the performance of or a breach by
the Company of any other covenant or agreement in this Indenture or
under the Securities (other than those referred to in (1), (2), (3) or
(4) above) and such default continues for 60 days after the notice
specified below;
(6) the failure by any Note Guarantor that is a Significant
Subsidiary (if any) to comply with its obligations under any Note
Guarantee to which such Note Guarantor is a party, after any applicable
grace period;
(7) Indebtedness of the Company or any Significant Subsidiary
is not paid within any applicable grace period after final maturity or
is accelerated by the holders thereof and the total amount of such
unpaid or accelerated Indebtedness exceeds $25.0 million or its foreign
currency equivalent at the time;
(8) the Company or a Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian (as
defined below) of it or for any substantial part of its
property; or
(D) makes a general assignment for the benefit of
its creditors; or takes any comparable action under any
foreign laws relating to insolvency;
(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary;
59
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days;
(10) any judgment or decree for the payment of money in excess
of $25.0 million or its foreign currency equivalent at the time in the
aggregate for all such final judgments or orders against the Company or
a Significant Subsidiary if (A) an enforcement proceeding thereon is
commenced and not discharged within ten days or (B) such judgment or
decree remains outstanding for a period of 60 days following such
judgment or decree and is not discharged, waived, stayed or bonded; or
(11) the failure of any Note Guarantee by a Note Guarantor (if
any) which is a Significant Subsidiary to be in full force and effect
(except as contemplated by the terms thereof) or the denial or
disaffirmation by any such Note Guarantor of its obligations under any
Note Guarantee if such Default continues for 30 days.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under clause (4) or
(5) of this Section 5.1 will not constitute an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified in said clause (4) or (5) after receipt of
such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clauses (4), (5), (6), (7), (10) or (11) of this
Section 5.1.
SECTION 5.2. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 5.1(8) or (9) with respect to the
Company or a Significant Subsidiary) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in outstanding principal
amount of the Securities by notice to the Company and the Trustee, may, and the
Trustee at the request of such Holders shall, declare the principal of, premium,
if any, and accrued but unpaid interest on all the Securities to be due and
payable. Upon such a declaration, such principal, premium and interest shall,
subject to Section 9.4, be immediately due and payable. In the event of a
declaration of acceleration because an Event of Default set forth in Section
5.1(7) above has occurred and is continuing, such declaration of acceleration
shall be automatically rescinded and annulled if the event of default or payment
default triggering such Event of Default pursuant to Section 5.1(7) shall
60
be remedied or cured by the Company and/or the relevant Significant Subsidiaries
or waived by the holders of the relevant Indebtedness within 60 days after the
declaration of acceleration with respect thereto. If an Event of Default
specified in Section 5.1(8) or (9) with respect to the Company occurs, the
principal of, premium, if any, and accrued and unpaid interest on all the
Securities will become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. The Holders
of a majority in principal amount of the Securities then outstanding by notice
to the Trustee may waive all past defaults (except with respect to nonpayment of
principal, premium or interest) and rescind an acceleration with respect to the
Securities and its consequences if (i) the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction and (ii) all
existing Events of Default, other than the nonpayment of principal of, premium,
if any or interest on the Securities that has become due solely because of such
acceleration, have been cured or waived. No such rescission shall affect any
subsequent Default or Event of Default or impair any right consequent thereto.
SECTION 5.3. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 5.4. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences except (i) a
Default or Event of Default in the payment of the principal of or interest on a
Security or (ii) a Default or Event of Default in respect of a provision that
under Section 8.2 cannot be amended without the consent of each Securityholder
affected. When a Default or Event of Default is waived, it is deemed cured, but
no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any consequent right.
SECTION 5.5. Control by Majority. The Holders of a majority in
principal amount of the Securities then outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 6.1, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action under this Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
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SECTION 5.6. Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in outstanding principal
amount of the Securities make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 5.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of, premium (if any) or interest on the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities, or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 5.8. Collection Suit by Trustee. If an Event of
Default specified in Section 5.1(1) or (2) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount then due and owing (together with interest on
any unpaid interest to the extent lawful) and the amounts provided for in
Section 6.7.
SECTION 5.9. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 6.7.
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SECTION 5.10. Priorities. If the Trustee collects any money
or property pursuant to this Article V, it shall pay out the money or property
in the following order:
FIRST: to the Trustee for amounts due under Section 6.7;
SECOND: to holders of Senior Indebtedness to the extent
required by Article IX;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 5.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by the Company, a suit by a Holder
pursuant to Section 5.7 or a suit by Holders of more than 10% in outstanding
principal amount of the Securities.
ARTICLE VI
Trustee
SECTION 6.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine such certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.5.
(d) 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.
(e) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 6.2. Rights of Trustee. (a) The Trustee may
conclusively rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
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(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond or other
paper or document; but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(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 5.1(1) and 5.1(2), or (ii) any Default or Event of Default of which
the Trustee shall have received written notification or obtained "actual
knowledge." "Actual knowledge" shall mean the actual fact or statement of
knowing without independent investigation with respect thereto.
SECTION 6.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 6.10 and 6.11.
SECTION 6.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication or for the use or application of any
funds received by any Paying Agent other than the Trustee.
SECTION 6.5. Notice of Defaults. If a Default or Event of
Default occurs and is continuing and if a Trust Officer has actual knowledge
thereof, the Trustee shall mail to each Securityholder notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a Default
or Event of Default in payment of principal of, premium (if any), or interest on
any Security (including payments pursuant to the required repurchase provisions
of such Security, if any), the Trustee may withhold the notice if and so long as
its board of directors, a committee of its board of directors or a committee of
its Trust
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Officers and/or a Trust Officer of the Trustee in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 6.6. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
The Trustee shall also transmit by mail all reports required by TIA ss. 313(c).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee in writing whenever the Securities become listed on any stock exchange
and of any delisting thereof.
SECTION 6.7. Compensation and Indemnity. The Company shall pay
to the Trustee from time to time such compensation for its services as the
parties shall agree in writing from time to time. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including, but not limited to,
costs of collection, costs of preparing and reviewing reports, certificates and
other documents, costs of preparation and mailing of notices to Securityholders
and reasonable costs of counsel retained by the Trustee in connection with the
delivery of an Opinion of Counsel or otherwise, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee, and each of
its officers, directors, counsel and agents, against any and all loss, liability
or expense (including, but not limited to, reasonable attorneys' fees and
expenses) incurred by it in connection with the administration of this trust and
the performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 6.7) and of defending itself
against any claims (whether asserted by any Securityholder, the Company or
otherwise). The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith, subject to the
exceptions contained in Section 6.1(c) hereof.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 6.7 shall not be
subordinate to any other liability or indebtedness of the Company.
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The Company's payment obligations pursuant to this Section and
any lien arising hereunder shall survive the discharge of this Indenture and the
resignation or removal of the Trustee. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 5.1(8) or (9) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 6.8. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Company and
the Trustee in writing and may appoint a successor Trustee. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 6.7.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section 6.8, the Company's obligations under Section 6.7 shall continue for
the benefit of the retiring Trustee.
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SECTION 6.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 6.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have
a combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b).
SECTION 6.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VII
Discharge of Indenture; Defeasance
SECTION 7.1. Discharge of Liability on Securities; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.9) for cancellation or
(ii) all outstanding Securities have become due and payable at maturity and the
Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity all outstanding Securities (other than Securities replaced pursuant to
Section 2.9), including interest thereon to maturity, and the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 7.1(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
(accompanied by an Officers' Certificate and an Opinion of Counsel stating that
all conditions precedent specified herein relating to the satisfaction and
discharge of this Indenture have been complied with) and at the cost and expense
of the Company.
(b) Subject to Sections 7.1(c) and 7.2, the Company at its
option and at any time may terminate (i) all the obligations of the Company and
any Note Guarantor under the Securities and this Indenture ("legal defeasance
option") or (ii) the obligations of the
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Company and any Note Guarantor under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8,
3.9, 3.10, 3.11, 3.12, 3.13, 4.1(iii), 4.1(v), 4.2(iii) and 4.2(v) and the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant or provision,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or provision 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 5.1(3) and 5.1(4) ("covenant defeasance option"), but except as
specified above, the remainder of this Indenture and the Securities shall be
unaffected thereby. The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections 5.1(4),
5.1(6), 5.1(7), 5.1(8) (but only with respect to a Significant Subsidiary),
5.1(9) (but only with respect to a Significant Subsidiary), 5.1(10) and 5.1(11)
or because of the failure of the Company to comply with Sections 4.1(iii),
4.1(v), 4.2(iii) and 4.2(v).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 7.1(a) and (b),
the Company's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 6.7,
6.8, 7.4, 7.5 and 7.6 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 6.7, 7.4 and 7.5 shall
survive.
SECTION 7.2. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
for the benefit of the Holders cash in U.S. dollars or U.S. Government
Obligations or a combination thereof for the payment of principal of
and interest on the Securities to maturity;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default with respect to the Indenture resulting from the incurrence
of Indebtedness, all or a portion of which will be used to defease the
Securities concurrently with such incurrence);
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(4) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default under this
Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that (A) the Securities and (B) assuming no
intervening bankruptcy of the Company between the date of deposit and
the 91st day following the deposit and that no Holder of the Securities
is an insider of the Company, after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' right generally;
(6) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article IX;
(7) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(8) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States stating that (i) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling, or (ii) since
the date of this Indenture there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Securityholders
will not recognize income, gain or loss for federal income tax purposes
as a result of such legal defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such legal defeasance had not
occurred;
(9) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States to the effect that the Securityholders will not recognize
income, gain or loss for federal income tax purposes as a result of
such covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred; and
(10) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities and this
Indenture as contemplated by this Article VII have been complied with.
SECTION 7.3. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article VII. It shall apply the deposited money and the money from U.S.
Government Obligations through the
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Paying Agent and in accordance with this Indenture to the payment of principal
of and interest on the Securities. Money and securities so held in trust are not
subject to Article IX.
SECTION 7.4. Repayment to Company. Anything herein to the
contrary notwithstanding, the Trustee shall deliver or pay to the Company from
time to time upon Company Order any money or U.S. Government Obligations held by
it as provided in this Article VII which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect legal defeasance
or covenant defeasance, as applicable, provided that the Trustee shall not be
required to liquidate any U.S. Government Obligations in order to comply with
the provisions of this paragraph.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon written request any money
held by them for the payment of principal of or interest on the Securities that
remains unclaimed for two years, and, thereafter, Securityholders entitled to
the money must look to the Company for payment as general creditors.
SECTION 7.5. Indemnity for U.S. Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 7.6. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article VII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VII until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VII; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE VIII
Amendments
SECTION 8.1. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by
a Successor Company of an obligation of the Company under this
Indenture;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article IX that would limit or
terminate the benefits available to any holder of Senior Indebtedness
(or Representatives therefor) under Article IX;
(5) to add Guarantees with respect to the Securities or to
secure the Securities;
(6) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(7) to comply with any requirements of the SEC in connection
with qualifying this Indenture under the TIA;
(8) to make any change that does not adversely affect the
rights of any Securityholder; or
(9) to provide for the issuance of the Exchange Notes, which
will have terms substantially identical in all material respects to the
Initial Notes (except that the transfer restrictions contained in the
Initial Notes will be modified or eliminated, as appropriate), and
which will be treated, together with any outstanding Initial Notes, as
a single issue of securities.
An amendment under this Section may not make any change that
adversely affects the rights under Article IX of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such
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notice to all Securityholders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section.
SECTION 8.2. With Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding. However,
without the consent of each Securityholder affected, an amendment may not:
(1) reduce the principal amount of Securities whose Holders
must consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of
any Security;
(4) reduce the premium payable upon the repurchase of any
Security or change the time at which any Security may or shall be
repurchased in accordance with Section 3.9;
(5) make any Security payable in money other than that stated
in the Security;
(6) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities;
(7) release any Note Guarantor, if any, from any of its
obligations under its Note Guarantee or this Indenture, except in
compliance with the terms thereof; or
(8) make any change in the amendment provisions which require
each Holder's consent or in the waiver provisions.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article IX of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such
73
notice to all Securityholders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section.
SECTION 8.3. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 8.4. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver made pursuant to Section 8.2 shall become effective upon
receipt by the Trustee of the requisite number of written consents.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall become
valid or effective more than 120 days after such record date.
SECTION 8.5. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 8.6. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article VIII if the amendment
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 6.1) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
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ARTICLE IX
Subordination
SECTION 9.1. Agreement To Subordinate. The Company agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by, and all other obligations in respect of, the Securities is
subordinated in right of payment, to the extent and in the manner provided in
this Article IX, to the prior payment of all Senior Indebtedness and that the
subordination is for the benefit of and enforceable by the holders of Senior
Indebtedness. The Securities shall in all respects rank pari passu with all
other Senior Subordinated Indebtedness of the Company and only Indebtedness of
the Company that is Senior Indebtedness will rank senior to the Securities in
accordance with the provisions set forth herein. All provisions of this Article
IX shall be subject to Section 9.12.
SECTION 9.2. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its properties:
(1) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents of all Senior
Indebtedness before Securityholders shall be entitled to receive any
payment of principal of or interest on or other amounts with respect to
the Securities from the Company; and
(2) until the Senior Indebtedness is paid in full in cash or
Cash Equivalents, any payment or distribution to which Securityholders
would be entitled but for this Article IX shall be made to holders of
Senior Indebtedness, as their respective interests may appear.
SECTION 9.3. Default on Senior Indebtedness. The Company shall
not pay the principal of, premium (if any) or interest on or any other amounts
with respect to the Securities or make any deposit pursuant to Section 7.2 or
repurchase or otherwise retire any Securities (collectively, "pay the
Securities") if (i) any Senior Indebtedness is not paid when due in cash or Cash
Equivalents or (ii) any other default on Senior Indebtedness occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded in writing or (y) such Senior Indebtedness has
been paid in full in cash or Cash Equivalents; provided, however, that the
Company may pay the Securities, without regard to the foregoing if the Company
and the Trustee receive written notice approving such payment from the
Representative of the Senior Indebtedness with respect to which either of the
events set forth in clause (i) or (ii) of this sentence has occurred or is
continuing. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Securities (except in (i) Capital Stock
(other than Disqualified
Stock) issued by the Company to pay interest on the Securities or issued in
exchange for the Securities, (ii) in securities substantially identical to the
Securities issued by the Company in payment of interest thereon or (iii) in
securities issued by the Company which are subordinated to Senior Indebtedness
at least to the same extent as the Securities and having an Average Life at
least equal to the remaining Average Life of the Securities) for a period (a
"Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to the Company) of written notice (a "Blockage Notice") of such default
from the Representative(s) of the holders of such Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated (i) by
written notice to the Trustee and the Company from the Person or Persons who
gave such Blockage Notice, (ii) because the default giving rise to such Blockage
Notice is no longer continuing or (iii) because such Designated Senior
Indebtedness has been repaid in full in cash or Cash Equivalents).
Notwithstanding the provisions of the immediately preceding sentence, unless the
holders of such Designated Senior Indebtedness or the Representative(s) of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Securities after the end of
such Payment Blockage Period. Not more than one Blockage Notice may be given,
and not more than one Payment Blockage may occur, in any consecutive 360-day
period, irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period.
SECTION 9.4. Acceleration of Payment of Securities. If payment
of the Securities is accelerated because of an Event of Default, the Company and
the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness (or their Representatives) of the acceleration; provided, however,
that the Company and the Trustee shall be obligated to notify such a
Representative only if such Representative has delivered or caused to be
delivered to the Company and the Trustee an address for service of such a notice
(and the Company and the Trustee shall only be obligated to deliver the notice
to the address so specified). If any Designated Senior Indebtedness is
outstanding, the Company shall not pay the Securities until five Business Days
after the holders or Representative(s) of such Designated Senior Indebtedness
receives notice of such acceleration and, thereafter, may pay the Securities,
only if this Article IX otherwise permits payments at that time.
SECTION 9.5. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article IX should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and promptly pay it
over to them as their respective interests may appear.
SECTION 9.6. Subrogation. After all Senior Indebtedness is
paid in full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article IX to holders of Senior Indebtedness which otherwise would have been
made to Securityholders is not, as between the Company and Securityholders, a
payment by the Company of Senior Indebtedness.
SECTION 9.7. Relative Rights. This Article IX defines the
relative rights of Securityholders and holders of Senior Indebtedness. Nothing
in this Indenture shall:
76
(1) impair, as between the Company and Securityholders, the
obligation of the Company which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or Event of Default, subject to
the rights of holders of Senior Indebtedness to receive distributions
otherwise payable to Securityholders.
SECTION 9.8. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by the failure of any of them to comply with this
Indenture.
SECTION 9.9. Rights of Trustee and Paying Agent.
Notwithstanding Section 9.3, the Trustee or Paying Agent may continue to make
payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives notice in writing satisfactory to it that
payments may not be made under this Article IX. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice; provided, however, that, if an issue of Senior
Indebtedness has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article IX with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article VI shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article IX shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
SECTION 9.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
SECTION 9.11. Article IX Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment in respect of the
Securities, by reason of any provision in this Article IX shall not be construed
as preventing the occurrence of a Default or Event of Default. Nothing in this
Article IX shall have any effect on the right of the Secu- rityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION 9.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VII by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior
77
Indebtedness or subject to the restrictions set forth in this Article IX, and
none of the Securityholders shall be obligated to pay over any such amount to
the Company, any holder of Senior Indebtedness, or any other creditor of the
Company.
SECTION 9.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article IX, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 9.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article IX. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article IX, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article IX, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
6.1 and 6.2 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article IX.
SECTION 9.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article IX and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 9.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article IX or otherwise.
SECTION 9.16. Reliance by Holders of Senior Indebtedness on
Indebtedness on Subordination Provisions. Each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
78
ARTICLE X
Miscellaneous
SECTION 10.1. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control.
SECTION 10.2. Notices. Any notice or communication shall be
in writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Smithfield Foods, Inc.
999 Waterside Drive
Suite 900
Norfolk, VA 23510
Attention: Aaron D. Trub
Facsimile No.: (757) 365-3017
With a copy to:
McGuire, Woods, Battle & Boothe
One James Center
901 E. Cary Street
Richmond, VA 23219-4030
Attention: Robert L. Burrus, Jr., Esq.
Facsimile No.: (804) 775-1061
if to the Trustee:
SunTrust Bank, Atlanta
58 Edgewood Avenue
Room 400-Annex
Atlanta, Georgia 30303
Attention: Corporate Trust Department
Facsimile No.: (404) 332-3966
79
With a copy (which shall not constitute notice) to:
Long, Aldridge & Norman, LLP
One Peachtree Center
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
Attention: Government Finance
Facsimile No.: (404) 527-4198
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.3. Communication by Holders with other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 10.4. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
80
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 10.6. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 10.7. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 10.8. Legal Holidays. A "Legal Holiday" is a Saturday,
a Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City or Atlanta, Georgia. If a payment date is
a Legal Holiday, payment shall be made on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date shall not be affected.
SECTION 10.9. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York 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.
SECTION 10.10. No Recourse Against Others. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
81
SECTION 10.11. Successors. All agreements of the Company in
this Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 10.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 10.13. Variable Provisions. The Company initially
appoints the Trustee as Paying Agent and Registrar and custodian with respect to
any Global Securities.
SECTION 10.14. Qualification of Indenture. The Company shall
qualify this Indenture under the TIA in accordance with the terms and conditions
of the Registration Rights Agreement and shall pay all reasonable costs and
expenses (including attorneys' fees and expenses for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of the Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive from
the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 10.15. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
SMITHFIELD FOODS, INC.
By:______________________________
Name:
Title:
SUNTRUST BANK, ATLANTA
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Applicable Restricted Securities Legend]
[Depository Legend, if applicable]
No. [___] Principal Amount $[______________]
CUSIP NO. ____________
SMITHFIELD FOODS, INC.
7 5/8% Senior Subordinated Note due 2008
Smithfield Foods, Inc., a Virginia corporation promises to pay
to [___________], or registered assigns, the principal sum of
[__________________] Dollars on February 15, 2008.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: SMITHFIELD FOODS, INC.
By:---------------------------------------
By:---------------------------------------
2
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
SUNTRUST BANK, ATLANTA
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By---------------------
Authorized Signatory February __, 1998
[FORM OF REVERSE SIDE OF INITIAL NOTE]
7 5/8% Senior Subordinated Note due 2008
1. Interest
Smithfield Foods, Inc., a Virginia corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company") promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on February 15 and
August 15 of each year. Interest on the Securities will accrue from the most
recent date to which interest has been paid on the Securities or, if no interest
has been paid, from February 9, 1998. The Company shall pay interest on overdue
principal or premium, if any (plus interest on such interest to the extent
lawful), at the rate borne by the Securities to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on
which any principal of or interest on any Security is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The Company
will pay interest (except Defaulted Interest) to the Persons who are registered
Holders of Securities at the close of business on the February 1 or August 1
next preceding the interest payment date even if Securities are cancelled or
repurchased after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar
Initially, SunTrust Bank, Atlanta, a banking corporation duly
organized and existing under the laws of the State of Georgia ("Trustee"), will
act as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice to any Securityholder. The
Company or any of its domestically incorporated Wholly-Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of February 9, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company and the
Trustee. The terms of the Securities
2
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as
in effect from time to time (the "Act"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are general unsecured senior subordinated
obligations of the Company limited to $200.0 million aggregate principal amount
(subject to Section 2.9 of the Indenture). This Security is one of the Initial
Notes referred to in the Indenture. The Securities include the Initial Notes and
any Exchange Notes issued in exchange for the Initial Notes pursuant to the
Indenture and the Registration Rights Agreement. The Initial Notes and the
Exchange Notes are treated as a single class of securities under the Indenture.
The Indenture imposes certain limitations on the Incurrence of Indebtedness by
the Company and its Subsidiaries, the payment of dividends and other
distributions on the Capital Stock of the Company and its Subsidiaries, the
purchase or redemption of Capital Stock of the Company and Capital Stock of such
Subsidiaries, certain purchases or redemptions of Subordinated Indebtedness, the
sale or transfer of assets and Capital Stock of Subsidiaries, the issuance or
sale of Capital Stock of Subsidiaries, the business activities and investments
of the Company and its Subsidiaries and transactions with Affiliates. In
addition, the Indenture limits the ability of the Company and its Subsidiaries
to restrict distributions and dividends from Subsidiaries.
5. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
6. Subordination
The Securities are subordinated to Senior Indebtedness, as
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give them
effect and appoints the Trustee as attorney-in-fact for such purpose.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register
3
the transfer of or exchange any Securities for a period beginning 15 days before
an interest payment date and ending on such interest payment date.
8. Persons Deemed Owners
The registered holder of this Security may be treated as the
owner of it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to maturity.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to provide for the issuance of Exchange
Notes.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon required repurchase, upon
declaration or otherwise; (iii) failure by the Company or any Significant
Subsidiary to comply with other agreements in the Indenture or
4
the Securities, in certain cases subject to notice and lapse of time; (iv)
certain accelerations (including failure to pay within any grace period after
final maturity) of other indebtedness of the Company or any Significant
Subsidiary if the amount accelerated (or so unpaid) exceeds $25.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company or any
Significant Subsidiary; and (vi) certain final, non-appealable judgments or
decrees for the payment of money in excess of $25.0 million. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities then outstanding may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities being due
and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default or Event of Default (except a Default or Event of Default in payment of
principal or interest) if it determines that withholding notice is in their
interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent acting on its behalf) manually signs
the certificate of authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT
5
TEN (=joint tenants with rights of survivorship and not as tenants in common),
CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities. No representation is made as to the accuracy of
such numbers as printed on the Securities and reliance may be placed only on the
other identification numbers placed thereon.
18. Governing Law
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York 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.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Smithfield Foods, Inc.
999 Waterside Drive
Suite 900
Norfolk, VA 23510
Attention of Aaron D. Trub
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
-----------------------------------------------------
(Print or type assignee's name, address and zip code)
--------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint-----------agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Date:____________________ Your Signature:___________________
Signature Guarantee:______________________________
(Signature must be guaranteed)
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
1 [] acquired for the undersigned's own account, without transfer; or
2 [] transferred to the Company; or
3 [] transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933, as amended
(the "Securities Act"); or
4 [] transferred pursuant to an effective registration statement under
the Securities Act; or
2
5 [] transferred pursuant to and in compliance with Regulation S
under the Securities Act; or
6 [] transferred to an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act), that has furnished to the
Trustee a signed letter containing certain
representations and agreements (the form of which
letter appears as Section 2.7 of the Indenture); or
7 [] transferred pursuant to another available exemption
from the registration requirements of the Securities
Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
------------------------------
Signature
Signature Guarantee:
- ------------------------- ------------------------------
(Signature must be guaranteed) Signature
- ------------------------------------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying
3
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
----------------------------------------------
Dated: NOTICE: To be executed by an executive officer
4
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Exchange Global Security Global Security such decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.7 or 3.9 of the Indenture, check the box:
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 3.7 or 3.9 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $
Date: _____________ Your Signature: _________________________
(Sign exactly as your name appears on the other side of the
Security)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE]
[Depository Legend, if applicable]
No. [_____] Principal Amount $[____________]
CUSIP NO. _____________
SMITHFIELD FOODS, INC.
7 5/8% Senior Subordinated Notes due 2008
Smithfield Foods, Inc., a Virginia corporation, promises to
pay to [______________], or registered assigns, the principal sum of
[_______________] Dollars on February 15, 2008.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
Additional provisions of this Security are set forth on the
other side of this Security.
SMITHFIELD FOODS, INC.
By:------------------------------------------------
By:------------------------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
SUNTRUST BANK, ATLANTA
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:---------------------------------
Authorized Signatory Date:
[FORM OF REVERSE SIDE OF EXCHANGE NOTE]
7 5/8% Senior Subordinated Note due 2008
1. Interest
Smithfield Foods, Inc., a Virginia corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company") promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on February 15 and
August 15 of each year. Interest on the Securities will accrue from the most
recent date to which interest has been paid on the Securities or, if no interest
has been paid, from February 9, 1998. The Company shall pay interest on overdue
principal or premium, if any (plus interest on such interest to the extent
lawful), at the rate borne by the Securities to the extent lawful. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on
which any principal of or interest on any Security is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The Company
will pay interest (except Defaulted Interest) to the Persons who are registered
Holders of the Securities at the close of business on the February 1 or August 1
next preceding the interest payment date even if Securities are cancelled or
repurchased after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar
Initially, SunTrust Bank, Atlanta, a banking corporation duly
organized and existing under the laws of the State of Georgia ("Trustee"), will
act as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice to any Securityholder. The
Company or any of its domestically incorporated Wholly-Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of February 9, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the
2
Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect from
time to time (the "Act"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the Act
for a statement of those terms.
The Securities are general unsecured senior subordinated
obligations of the Company limited to $200.0 million aggregate principal amount
(subject to Section 2.9 of the Indenture). This Security is one of the Exchange
Notes referred to in the Indenture. The Securities include the Initial Notes and
any Exchange Notes issued in exchange for the Initial Notes pursuant to the
Indenture and the Registration Rights Agreement. The Initial Notes and the
Exchange Notes are treated as a single class of securities under the Indenture.
The Indenture imposes certain limitations on the Incurrence of Indebtedness by
the Company and its Subsidiaries, the payment of dividends and other
distributions on the Capital Stock of the Company and certain of its
Subsidiaries, the purchase or redemption of Capital Stock of the Company and
Capital Stock of such Subsidiaries, certain purchases or redemptions of
Subordinated Indebtedness, the sale or transfer of assets and Capital Stock of
Subsidiaries, the issuance or sale of Capital Stock of Subsidiaries, the
business activities and investments of the Company and its Subsidiaries and
transactions with Affiliates. In addition, the Indenture limits the ability of
the Company and its Subsidiaries to restrict distributions and dividends from
Subsidiaries.
5. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
6. Subordination
The Securities are subordinated to Senior Indebtedness, as
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give them
effect and appoints the Trustee as attorney-in-fact for such purpose.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register
3
the transfer of or exchange any Securities for a period beginning 15 days before
an interest payment date and ending on such interest payment date.
8. Persons Deemed Owners
The registered holder of this Security may be treated as the
owner of it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to maturity.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
Communications or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Notes.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon required repurchase, upon
declaration or otherwise; (iii) failure by the Company or any Significant
Subsidiary to comply with other agreements in the Indenture or
4
the Securities, in certain cases subject to notice and lapse of time; (iv)
certain accelerations (including failure to pay within any grace period after
final maturity) of other Indebtedness of the Company or any Significant
Subsidiary if the amount accelerated (or so unpaid) exceeds $25.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company or any
Significant Subsidiary; and (vi) certain final, non-appealable judgments or
decrees for the payment of money in excess of $25.0 million. If an Event of
Default occurs and is continuing, the Trustee or Holders of at least 25% in
principal amount of the Securities then outstanding may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities being due
and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default or Event of Default (except a Default or Event of Default in payment of
principal or interest) if it determines that withholding notice is in their
interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent acting on its behalf) manually signs
the certificate of authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT
5
TEN (=joint tenants with rights of survivorship and not as tenants in common),
CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities. No representation is made as to the accuracy of
such numbers as printed on the Securities and reliance may be placed only on the
other identification numbers placed thereon.
18. Governing Law
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York 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.
The Company will furnish to any Securityholder upon request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Smithfield Foods, Inc.
999 Waterside Drive
Suite 900
Norfolk, VA 23510
Attention of Aaron D. Trub
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
----------------------------------------------------
(Print or type assignee's name, address and zip code)
--------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint---------------agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
- --------------------------------------------------------------------------------
Date: _______________ Your Signature ____________________
Signature Guarantee: ___________________________________
(Signature must be guaranteed)
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
2
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Exchange Global Security Global Security such decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.7 or 3.9 of the Indenture, check the box:
[]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 3.7 or 3.9 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $
Date: _______________ Your Signature: _________________________
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.