EXHIBIT 4.1
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GENERAL NUTRITION CENTERS, INC.
AND EACH OF THE GUARANTORS PARTY HERETO
8-1/2% SENIOR SUBORDINATED NOTES DUE 2010
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INDENTURE
Dated as of December 5, 2003
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U.S. Bank National Association
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................... 7.10
(a)(2)................................................................... 7.10
(a)(3)................................................................... N.A.
(a)(4)................................................................... N.A.
(a)(5)................................................................... 7.10
(b)...................................................................... 7.10
(c)...................................................................... N.A.
311(a)...................................................................... 7.11
(b)...................................................................... 7.11
(c)...................................................................... N.A.
312(a)...................................................................... 2.05
(b)...................................................................... 12.03
(c)...................................................................... 12.03
313(a)...................................................................... 7.06
(b)(1)................................................................... N.A.
(b)(2)................................................................... 7.06; 7.07
(c)...................................................................... 7.06; 12.02
(d)...................................................................... 7.06
314(a)...................................................................... 4.03; 12.02; 12.05
(b)...................................................................... N.A
(c)(1)................................................................... 12.04
(c)(2)................................................................... 12.04
(c)(3)................................................................... N.A.
(d)...................................................................... N.A
(e)...................................................................... 12.05
(f)...................................................................... N.A.
315(a)...................................................................... 7.01
(b)...................................................................... 7.05; 12.02
(c)...................................................................... 7.01
(d)...................................................................... 7.01
(e)...................................................................... 6.11
316(a) (last sentence)...................................................... 2.09
(a)(1)(A)................................................................ 6.05
(a)(1)(B)................................................................ 6.04
(a)(2)................................................................... N.A.
(b)...................................................................... 6.07
(c)...................................................................... 2.12
317(a)(1)................................................................... 6.08
(a)(2)................................................................... 6.09
(b)...................................................................... 2.04
318(a)...................................................................... 12.01
(b)...................................................................... N.A.
(c)...................................................................... 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions................................................................................ 1
Section 1.02 Other Definitions.......................................................................... 29
Section 1.03 Incorporation by Reference of Trust Indenture Act.......................................... 29
Section 1.04 Rules of Construction...................................................................... 30
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating............................................................................ 30
Section 2.02 Execution and Authentication............................................................... 31
Section 2.03 Registrar and Paying Agent................................................................. 32
Section 2.04 Paying Agent to Hold Money in Trust........................................................ 32
Section 2.05 Holder Lists............................................................................... 32
Section 2.06 Transfer and Exchange...................................................................... 33
Section 2.07 Replacement Notes.......................................................................... 45
Section 2.08 Outstanding Notes.......................................................................... 45
Section 2.09 Treasury Notes............................................................................. 45
Section 2.10 Temporary Notes............................................................................ 45
Section 2.11 Cancellation............................................................................... 46
Section 2.12 Defaulted Interest......................................................................... 46
Section 2.13 Issuance of Additional Notes............................................................... 46
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee......................................................................... 47
Section 3.02 Selection of Notes to Be Redeemed or Purchased............................................. 47
Section 3.03 Notice of Redemption....................................................................... 47
Section 3.04 Effect of Notice of Redemption............................................................. 48
Section 3.05 Deposit of Redemption or Purchase Price.................................................... 48
Section 3.06 Notes Redeemed or Purchased in Part........................................................ 49
Section 3.07 Optional Redemption........................................................................ 49
Section 3.08 Mandatory Redemption....................................................................... 50
Section 3.09 Offer to Purchase by Application of Excess Proceeds........................................ 50
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes........................................................................... 51
Section 4.02 Maintenance of Office or Agency............................................................ 52
Section 4.03 Reports.................................................................................... 52
Section 4.04 Compliance Certificate..................................................................... 53
Section 4.05 Taxes...................................................................................... 53
Section 4.06 Stay, Extension and Usury Laws............................................................. 53
Section 4.07 Limitation on Restricted Payments.......................................................... 53
Section 4.08 Limitation on Restrictions on Distributions from Restricted Subsidiaries................... 56
Section 4.09 Limitation on Indebtedness................................................................. 58
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Section 4.10 Limitation on Asset Dispositions........................................................... 60
Section 4.11 Limitation on Transactions with Affiliates................................................. 62
Section 4.12 Limitation on Liens........................................................................ 64
Section 4.13 Limitation on the Sale or Issuance of Preferred Stock of Restricted Subsidiaries........... 64
Section 4.14 Corporate Existence........................................................................ 64
Section 4.15 Offer to Repurchase Upon Change of Control................................................. 65
Section 4.16 Limitation on Layering..................................................................... 66
Section 4.17 Additional Note Guarantees................................................................. 66
Section 4.18 Designation of Unrestricted Subsidiaries................................................... 67
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets................................................... 67
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.......................................................................... 68
Section 6.02 Acceleration............................................................................... 70
Section 6.03 Other Remedies............................................................................. 70
Section 6.04 Waiver of Past Defaults.................................................................... 70
Section 6.05 Control by Majority........................................................................ 71
Section 6.06 Limitation on Suits........................................................................ 71
Section 6.07 Rights of Holders of Notes to Receive Payment.............................................. 71
Section 6.08 Collection Suit by Trustee................................................................. 72
Section 6.09 Trustee May File Proofs of Claim........................................................... 72
Section 6.10 Priorities................................................................................. 72
Section 6.11 Undertaking for Costs...................................................................... 73
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.......................................................................... 73
Section 7.02 Rights of Trustee.......................................................................... 74
Section 7.03 Individual Rights of Trustee............................................................... 74
Section 7.04 Trustee's Disclaimer....................................................................... 75
Section 7.05 Notice of Defaults......................................................................... 75
Section 7.06 Reports by Trustee to Holders of the Notes................................................. 75
Section 7.07 Compensation and Indemnity................................................................. 75
Section 7.08 Replacement of Trustee..................................................................... 76
Section 7.09 Successor Trustee by Merger, etc........................................................... 77
Section 7.10 Eligibility; Disqualification.............................................................. 77
Section 7.11 Preferential Collection of Claims Against Company.......................................... 77
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance................................... 77
Section 8.02 Legal Defeasance and Discharge............................................................. 77
Section 8.03 Covenant Defeasance........................................................................ 78
Section 8.04 Conditions to Legal or Covenant Defeasance................................................. 78
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions................................................................................. 80
Section 8.06 Repayment to Company....................................................................... 80
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Section 8.07 Reinstatement.............................................................................. 80
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................ 81
Section 9.02 With Consent of Holders of Notes........................................................... 82
Section 9.03 Compliance with Trust Indenture Act........................................................ 83
Section 9.04 Revocation and Effect of Consents.......................................................... 83
Section 9.05 Notation on or Exchange of Notes........................................................... 83
Section 9.06 Trustee to Sign Amendments, etc............................................................ 83
ARTICLE 10
SUBORDINATION
Section 10.01 Agreement to Subordinate................................................................... 84
Section 10.02 Liquidation; Dissolution; Bankruptcy....................................................... 84
Section 10.03 Default on Designated Senior Indebtedness.................................................. 84
Section 10.04 Acceleration of Notes...................................................................... 85
Section 10.05 When Distribution Must Be Paid Over........................................................ 85
Section 10.06 Notice by Company.......................................................................... 86
Section 10.07 Subrogation................................................................................ 86
Section 10.08 Relative Rights............................................................................ 86
Section 10.09 Subordination May Not Be Impaired by Company............................................... 86
Section 10.10 Distribution or Notice to Representative................................................... 86
Section 10.11 Rights of Trustee and Paying Agent......................................................... 87
Section 10.12 Authorization to Effect Subordination...................................................... 87
Section 10.13 Amendments................................................................................. 87
ARTICLE 11
NOTE GUARANTEES
Section 11.01 Guarantee.................................................................................. 87
Section 11.02 Subordination of Note Guarantee............................................................ 88
Section 11.03 Limitation on Guarantor Liability.......................................................... 89
Section 11.04 Execution and Delivery of Note Guarantee................................................... 89
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms......................................... 89
Section 11.06 Releases................................................................................... 90
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls............................................................... 90
Section 12.02 Notices.................................................................................... 90
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.............................. 91
Section 12.04 Certificate and Opinion as to Conditions Precedent......................................... 92
Section 12.05 Statements Required in Certificate or Opinion.............................................. 92
Section 12.06 Rules by Trustee and Agents................................................................ 92
Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders................... 92
Section 12.08 Governing Law.............................................................................. 92
Section 12.09 No Adverse Interpretation of Other Agreements.............................................. 93
Section 12.10 Successors................................................................................. 93
Section 12.11 Severability............................................................................... 93
Section 12.12 Counterpart Originals...................................................................... 93
Section 12.13 Table of Contents, Headings, etc........................................................... 93
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EXHIBITS
Exhibit A1 FORM OF NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTATION OF GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of December 5, 2003 among General Nutrition Centers,
Inc., a Delaware corporation (the "Company"), the Guarantors (as defined) and
U.S. Bank National Association, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 8-1/2% Senior Subordinated Notes due 2010 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquisition" means the acquisition of General Nutrition Companies,
Inc. pursuant to the Acquisition Agreement.
"Acquisition Agreement" means the Purchase Agreement, dated October 16,
2003, among Royal Numico N.V., Numico USA, Inc. and Apollo GNC Holding, Inc., as
in effect on the date of this Indenture.
"Additional Assets" means
(l) any property or assets (other than Indebtedness and
Capital Stock) to be used by the Company or a Restricted Subsidiary in
a Related Business;
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or another Restricted Subsidiary; provided that such Restricted
Subsidiary is primarily engaged in a Related Business;
(3) Capital Stock of any Person that at such time is a
Restricted Subsidiary, acquired from a third party; provided that such
Restricted Subsidiary is primarily engaged in a Related Business; and
(4) Capital Stock or Indebtedness of any Person which is
primarily engaged in a Related Business; provided, however, for
purposes of Section 4.10 hereof, the aggregate amount of Net Available
Cash permitted to be invested pursuant to this clause (4) shall not
exceed at any one time outstanding 2.5% of Consolidated Tangible
Assets.
"Additional Notes" means additional Notes (other than the Initial
Notes) issued under this Indenture in accordance with Sections 2.02 and 2.13
hereof, and as permitted by Section 4.09 hereof, as part of the same series as
the Initial Notes.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management
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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. No
Person (other than the Company or any Subsidiary of the Company) in whom a
Receivables Subsidiary makes an Investment in connection with a Qualified
Receivables Transaction will be deemed to be an Affiliate of the Company or any
of its Subsidiaries solely by reason of such Investment.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"Apollo" means Apollo Management V, L.P. and its Affiliates or any
entity controlled thereby or any of the partners thereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition 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 merger,
consolidation or similar transaction, other than:
(1) a disposition by a Restricted Subsidiary to the Company or
by the Company or a Restricted Subsidiary to a Restricted Subsidiary;
(2) a disposition of inventory, equipment, obsolete assets or
surplus personal property in the ordinary course of business;
(3) the sale of Cash Equivalents in the ordinary course of
business;
(4) a transaction or a series of related transactions in which
the fair market value of the assets disposed of, in the aggregate, does
not exceed $2 million;
(5) the sale or discount, with or without recourse, and on
commercially reasonable terms, of accounts receivable or notes
receivable arising in the ordinary course of business, or the
conversion or exchange of accounts receivable for notes receivable;
(6) the licensing of intellectual property in the ordinary
course of business;
(7) for purposes of Section 4.10 hereof only, a disposition
subject to the provisions of Section 4.07 hereof;
(8) a disposition of property or assets that is governed by
the provisions of Section 5.01 hereof;
(9) the sale of franchisee accounts receivable and related
assets of the type specified in the definition of "Qualified
Receivables Transaction" to a Receivables Subsidiary 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, it
being understood that, for the purposes of this clause (9), Notes
received in exchange for the transfer of franchisee accounts receivable
and related assets will be deemed cash if the Receivables Subsidiary or
other payor is required to repay said
2
Notes as soon as practicable from available cash collections less
amounts required to be established as reserves pursuant to contractual
agreements with entities that are not Affiliates of the Company entered
into as part of a Qualified Receivables Transaction;
(10) the transfer of franchise accounts receivable and related
assets of the type specified in the definition of "Qualified
Receivables Transaction" (or a fractional undivided interest therein)
by a Receivables Subsidiary in a Qualified Receivables Transaction;
(11) any surrender or waiver of contract rights or the
settlement release or surrender of contract, tort or other litigation
claims in the ordinary course of business;
(12) the granting of Liens (and foreclosure thereon) not
prohibited by this Indenture;
(13) the closure and disposition of retail stores or
distribution centers and any sales of a store owned by the Company to a
franchisee, in each case in the ordinary course of business; and
(14) any sublease of real property by the Company or any
Restricted Subsidiary to a franchisee in the ordinary course of
business.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing:
(1) 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 Indebtedness or Preferred Stock multiplied by the
amount of such payment by
(2) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether outstanding on
the date of this Indenture or thereafter Incurred, payable under or in respect
of the Senior Credit Facility and all obligations under Specified Hedging
Obligations (as defined in the Senior Credit Agreement), including, without
limitation, 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 or any Restricted Subsidiary whether or not a claim for
post-filing interest is allowed in such proceedings, penalties, fees, charges,
expenses, indemnifications, damages, reimbursement obligations, Guarantees,
other monetary obligations of any nature and all other amounts payable
thereunder or in respect thereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
committee thereof duly authorized to act on behalf of such board.
"Borrowing Base" means, as of any date, an amount equal to:
(1) 75% of the face amount of all accounts receivable owned by
the Company and its Restricted Subsidiaries as of the end of the most
recent fiscal quarter preceding such date that were not more than 60
days past due; provided, however, that any franchise accounts
receivable owned by a Receivables Subsidiary, or that the Company or
any of its Subsidiaries has agreed to
3
transfer to a Receivables Subsidiary, shall be excluded for purposes of
determining such amount; plus
(2) 50% of the book value of all inventory, net of reserves,
owned by the Company and its Restricted Subsidiaries as of the end of
the most recent fiscal quarter preceding such date.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"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.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in, however designated, equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"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 any of the following:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality of the United States government (provided that the full
faith and credit of the United States is pledged in support of those
securities) having maturities of not more than one year from the date
of acquisition;
(3) certificates of deposit 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 lender party to the Senior Credit
Agreement or with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Thomson Bank Watch Rating of
"B" or better;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2)
and (3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having one of the two highest ratings
obtainable from Moody's or S&P and, in each case, maturing within one
year after the date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1)
through (5) of this definition.
"Change of Control" means:
(1) any event occurs the result of which is that any "Person,"
as such term is used in Sections 13(d) and 14(d) of the Exchange Act,
other than the Permitted Holder or its Related Parties, becomes the
beneficial owner, as defined in Rules 13d-3 and 13d-5 under the
Exchange
4
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 a Successor Company, as defined below,
including, without limitation, through a merger or consolidation or
purchase of Voting Stock of the Company; provided that the Permitted
Holders or their Related Parties do not have the right or ability by
voting power, contract or otherwise to elect or designate for election
a majority of the Board of Directors; provided further that the
transfer of 100% of the Voting Stock of the Company to a Person that
has an ownership structure identical to that of the Company prior to
such transfer, such that the Company becomes a Wholly Owned Subsidiary
of such Person, shall not be treated as a Change of Control for
purposes of this Indenture;
(2) after an Equity Offering that is an initial public
offering of Capital Stock of the Company, 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 stockholders 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;
(3) the sale, lease, transfer, conveyance or other
disposition, in one or a series of related transactions other than a
merger or consolidation, of all or substantially all of the assets of
the Company and its Restricted Subsidiaries taken as a whole to any
Person or group of related Persons other than a Permitted Holder or a
Related Party of a Permitted Holder; or
(4) the adoption of a plan relating to the liquidation or
dissolution of the Company.
"Clearstream" means Clearstream Banking, S.A.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means General Nutrition Centers, Inc., and any and all
successors thereto.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of
(1) 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
(2) Consolidated Interest Expense of the Company for such four
fiscal quarters; provided, however, that:
(a) if the Company or any Restricted Subsidiary:
(i) 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, except that in making such computation,
the amount of Indebtedness
5
under any revolving credit facility outstanding on
the date of such calculation shall be computed based
on:
(A) the average daily balance
of such Indebtedness during such four fiscal
quarters or such shorter period for which
such facility was outstanding or
(B) if such facility was
created after the end of such four fiscal
quarters, the average daily balance of such
Indebtedness during the period from the date
of creation of such facility to the date of
such calculation, 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, or
(ii) has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the
beginning of the period that is no longer outstanding
on such date of determination, or if the transaction
giving rise to the need to calculate the Consolidated
Coverage Ratio involves a discharge of Indebtedness,
in each case other than Indebtedness Incurred under
any revolving credit facility unless such
Indebtedness has been permanently repaid, EBITDA and
Consolidated Interest Expense for such period shall
be calculated after giving effect on a pro forma
basis to such discharge of such Indebtedness,
including with the proceeds of such new Indebtedness,
as if such discharge had occurred on the first day of
such period;
(b) if since the beginning of such period the Company or
any Restricted Subsidiary has made any Asset Disposition of any company
or any business or any business segment, the EBITDA for such period
shall be reduced by an amount equal to the EBITDA, if positive,
directly attributable to the company, business or business segment 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 with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period,
and, 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;
(c) if since the beginning of such period the Company or
any Restricted Subsidiary, by merger or otherwise, has made an
Investment in any Person that thereby becomes a Restricted Subsidiary,
or otherwise acquired any company or any business or any group of
assets, including any such acquisition of assets occurring in
connection with a transaction causing a calculation to be made
hereunder, 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
6
(d) 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, has made any Asset Disposition or any Investment or acquisition
of assets that would have required an adjustment pursuant to clause (b)
or (c) 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, 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 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 an Asset Disposition, Investment or acquisition of assets, or any
transaction governed by the provisions of Section 5.01 hereof or the amount of
income or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred or repaid, repurchased,
defeased or otherwise discharged in connection therewith, the pro forma
calculations in respect thereof shall be as determined in good faith by a
responsible financial or accounting officer of the Company, based on reasonable
assumptions. 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 at a fixed rate 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. If any Indebtedness bears, at the option of the Company or a Restricted
Subsidiary, a fixed or floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be computed by applying,
at the option of the Company or such Restricted Subsidiary, either a fixed or
floating rate. If any Indebtedness which is being given pro forma effect was
Incurred under a revolving credit facility, the interest expense on such
Indebtedness shall be computed based upon the average daily balance of such
Indebtedness during the applicable period.
"Consolidated Interest Expense" means, as to any Person, for any
period, the total consolidated interest expense of such Person and its
Restricted Subsidiaries determined in accordance with GAAP, minus, to the extent
included in such interest expense, amortization or write-off of financing costs
plus, to the extent Incurred by such Person and its Restricted Subsidiaries in
such period but not included in such interest expense, without duplication:
(1) interest expense attributable to Capitalized Lease
Obligations determined as if such lease were a capitalized lease, in
accordance with GAAP;
(2) amortization of debt discount;
(3) interest in respect of Indebtedness of any other Person
that has been Guaranteed by such Person or any Restricted Subsidiary,
but only to the extent that such interest is actually paid by such
Person or any Restricted Subsidiary;
(4) non-cash interest expense;
(5) net costs associated with Hedging Obligations;
(6) the product of:
(a) mandatory Preferred Stock cash dividends in respect of all
Preferred Stock of Restricted Subsidiaries of such Person and
Disqualified Stock of such Person held by Persons other than such
Person or a Restricted Subsidiary, multiplied by
7
(b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a
decimal, in each case, determined on a consolidated basis in accordance
with GAAP; and
(7) 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 to any Person, other than the referent
Person or any Subsidiary thereof, in connection with Indebtedness
Incurred by such plan or trust; provided, however, that as to the
Company, there shall be excluded therefrom any such interest expense of
any Unrestricted Subsidiary to the extent the related Indebtedness is
not Guaranteed or paid by the Company or any Restricted Subsidiary.
For purposes of the foregoing, gross interest expense shall be
determined after giving effect to any net payments made or received by such
Person and its Subsidiaries with respect to Interest Rate Agreements.
"Consolidated Net Income" means, as to any Person, for any period, the
consolidated net income (loss) of such Person and its Subsidiaries before
preferred stock dividends, determined in accordance with GAAP; provided,
however, that there shall not be included in such Consolidated Net Income:
(1) any net income (loss) of any Person if such Person is not
(as to the Company) a Restricted Subsidiary and, as to any other
Person, an unconsolidated Person, except that:
(a) the referent Person'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
referent Person or a Subsidiary as a dividend or other
distribution, subject, in the case of a dividend or other
distribution to a Subsidiary, to the limitations contained in
clause (3) below, and
(b) the net loss of such Person shall be included to
the extent of the aggregate Investment of the referent Person
or any of its Restricted Subsidiaries in such Person;
(2) any net income (loss) of any Restricted Subsidiary, as to
the Company, or of any Subsidiary, as to any other Person, if in either
case such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions
by such Subsidiary, directly or indirectly, to the Company, except
that:
(a) such Person's equity in the net income of
any such Subsidiary for such period shall be included in
Consolidated Net Income up to the aggregate amount of cash
that could have been distributed by such Subsidiary during
such period to such Person or another 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 net loss of such Subsidiary shall be
included in determining Consolidated Net Income;
(3) any extraordinary gain or loss (together with any
provision for taxes related thereto);
(4) the cumulative effect of a change in accounting
principles;
8
(5) any reduction to the Consolidated Net Income of any Person
caused by the amount, if any, of (a) non-cash charges relating to the
exercise of options and (b) non-cash losses (or minus non-cash gains)
from foreign currency translation;
(6) any decrease in net income caused by the increase in the
book value of assets as a result of the Acquisition as reflected on the
Company's balance sheet solely as a result of the application of SFAS
No. 141;
(7) any gain (or loss), together with any related provision
for taxes on such gain (or loss), realized in connection with any asset
sale (other than in the ordinary course of business);
(8) costs related to the closing of stores in connection with
the Acquisition as described in the Offering Memorandum; and
(9) costs incurred by the Company relating to an election made
under Section 338(h)(10) of the Code (and any corresponding election
under state, local, and foreign income tax laws), as provided in the
Acquisition Agreement, in an amount not to exceed $10 million.
"Consolidated Tangible Assets" means, as of any date of determination,
the total assets, less goodwill and other intangibles, other than patents,
trademarks, copyrights, licenses and other intellectual property, shown on the
balance sheet of the Company and its Restricted Subsidiaries as of the most
recent date for which such a balance sheet is available, determined on a
consolidated basis in accordance with GAAP less all write-ups, other than
write-ups in connection with acquisitions, subsequent to the date of this
Indenture in the book value of any asset, except any such intangible assets,
owned by the Company or any of its Restricted Subsidiaries.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement,
including derivative agreements or arrangements, as to which such Person is a
party or a beneficiary.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A1 hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
9
"Designated Senior Indebtedness" means
(1) the Bank Indebtedness; and
(2) any other Senior Indebtedness or Guarantor 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 million and
is specifically designated by the Company in the instrument evidencing
or governing such Indebtedness as "Designated Senior Indebtedness" for
purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock that by its terms, or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable, or upon the
happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking
fund obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or
Disqualified Stock; or
(3) is redeemable at the option of the holder thereof, in
whole or in part;
in the case of clauses (1), (2) and (3), on or prior to the 91st day after the
Stated Maturity of the Notes. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or asset sale will
not constitute Disqualified Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with the
provisions of Section 4.07 hereof.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that Guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"EBITDA" means, as to any Person, for any period, the Consolidated Net
Income for such period, plus the following to the extent included in calculating
such Consolidated Net Income:
(1) income tax expense;
(2) Consolidated Interest Expense (including the amortization
of any debt issuance costs to the extent such costs are included in the
calculation of Consolidated Interest Expense);
(3) depreciation expense;
(4) amortization expense (including the amortization of any
debt issuance costs to the extent such costs are included in the
calculation of Consolidated Interest Expense);
(5) other non-cash charges or non-cash losses; and
(6) any fees or expenses paid in connection with the
Acquisition as described in the Offering Memorandum.
10
"Equity Offering" means any issuance or sale of Capital Stock (other
than Disqualified Stock and other than to the Company or any of its
Subsidiaries), or a contribution to the equity capital (other than by a
Subsidiary of the Company), of the Company, in each case, that results in net
proceeds to the Company of at least $100 million.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is not a Domestic Subsidiary.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the date of this Indenture, for purposes of
the definitions of the terms "Consolidated Coverage Ratio," "Consolidated
Interest Expense," "Consolidated Net Income" and "EBITDA," all defined terms in
this Indenture, to the extent used in or relating to any of the foregoing
definitions, and all ratios and computations based on any of the foregoing
definitions, and as in effect from time to time, for all other purposes of this
Indenture, 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.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes deposited with or on
behalf of and registered in the name of the Depository or its nominee,
substantially in the form of Exhibit A1 hereto and that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Government Obligations" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness, including any such
obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay, or advance or supply funds for the
purchase or payment of, such Indebtedness 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 or services, to take-or-pay, or to maintain financial
statement conditions or otherwise; or
11
(2) 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 deposits made in the
ordinary course of business.
The term "Guarantee" used as a verb has a correlative meaning.
"Guarantor" means
(1) the Company's direct and indirect Domestic Subsidiaries
existing on the date of this Indenture; and
(2) any Domestic Subsidiary created or acquired by the Company
after the date of this Indenture, other than any Immaterial Subsidiary.
"Guarantor Senior Indebtedness" means, with respect to a Guarantor, the
following obligations, whether outstanding on the date of this Indenture or
thereafter Incurred, without duplication:
(1) Bank Indebtedness; and
(2) all obligations consisting of the principal of and premium
and liquidated damages, if any, and accrued and unpaid interest,
including interest accruing on or after the filling of any petition in
bankruptcy or for reorganization relating to the Guarantor regardless
of whether post-filing interest is allowed in such proceeding, on, and
fees and other amounts owing in respect of, all other Indebtedness of
the Guarantor, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is expressly
provided that the obligations in respect of such Indebtedness are not
senior in right of payment to the obligations of such Guarantor under
the Note Guarantee; provided, however, that Guarantor Senior
Indebtedness will not include:
(a) any obligations of such Guarantor to any
Subsidiary or any other Affiliate of such Guarantor or any
such Affiliate's Subsidiaries;
(b) any liability for Federal, state, local, foreign
or other taxes owed or owing by such Guarantor;
(c) any accounts payable or other liability to trade
creditors arising in the ordinary course of business,
including Guarantees thereof or instruments evidencing such
liabilities;
(d) any Indebtedness, Guarantee or obligation of such
Guarantor that is expressly subordinate or junior to any other
Indebtedness, Guarantee or obligation of such Guarantor,
including any Guarantor Senior Subordinated Indebtedness and
any Subordinated Obligations of such Guarantor;
(e) Indebtedness that is represented by redeemable
Capital Stock; or
(f) that portion of any Indebtedness that is Incurred
in violation of this Indenture; provided that any Guarantee of
Indebtedness under the Senior Credit Facility will not cease
to be Guarantor Senior Indebtedness under this clause (f) if
the lenders of such Indebtedness obtained a certificate from
an Officer of the Company as of the date of
12
Incurrence of such Indebtedness to the effect that such
Indebtedness was permitted to be Incurred by this Indenture.
If any Designated Senior Indebtedness is disallowed, avoided or
subordinated pursuant to the provisions of Section 548 of Title 11 of the U.S.
Code or any applicable state fraudulent conveyance law, such Designated Senior
Indebtedness nevertheless will constitute Guarantor Senior Indebtedness.
"Guarantor Senior Subordinated Indebtedness" means with respect to a
Guarantor, the obligations of such Guarantor under the Note Guarantee and any
other Indebtedness of such Guarantor, whether outstanding on the date of this
Indenture or thereafter Incurred, that:
(1) specifically provides that such Indebtedness is to rank
pari passu in right of payment with the obligations of such Guarantor
under the Note Guarantee; and
(2) is not expressly subordinated by its terms in right of
payment to any Indebtedness or other obligation of such Guarantor that
is not Guarantor Senior Indebtedness of such Guarantor.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A1 hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold to Institutional Accredited
Investors.
"Immaterial Subsidiary" means, as of any date, any Restricted
Subsidiary whose total assets, as of that date, are less than $2 million and
whose total revenues for the most recent 12-month period do not exceed $2
million; provided that a Restricted Subsidiary will not be considered to be an
Immaterial Subsidiary if it, directly or indirectly, guarantees or otherwise
provides direct credit support for any Indebtedness of the Company.
"Incur" means issue, assume, enter into any Guarantee of, 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:
(1) the principal of Indebtedness of such Person for borrowed
money if and to the extent it would appear as a liability upon the
consolidated balance sheet of such Person prepared in accordance with
GAAP;
(2) the principal of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments if and to the
extent it would appear as a liability upon the consolidated balance
sheet of such Person prepared in accordance with GAAP;
13
(3) all reimbursement obligations of such Person, including
reimbursement obligations in respect of letters of credit or other
similar instruments, the amount of such obligations being equal at any
time to the aggregate then undrawn and unexpired amount of such letters
of credit or other instruments plus the aggregate amount of drawings
thereunder that have not then been reimbursed;
(4) 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 one year after the date of
placing such property in final service or taking final delivery and
title thereto or the completion of such services if and to the extent
it would appear as a liability upon the consolidated balance sheet of
such Person prepared in accordance with GAAP;
(5) all Capitalized Lease Obligations of such Person;
(6) the redemption, repayment or other repurchase amount of
such Person with respect to any Disqualified Stock or, if such Person
is a Subsidiary of the Company, any Preferred Stock of such Subsidiary,
but excluding, in each case, any accrued dividends, the amount of such
obligation to be equal at any time to the maximum fixed involuntary
redemption, repayment or repurchase price for such Capital Stock, or if
such Capital Stock has no fixed price, to the involuntary redemption,
repayment or repurchase price therefor calculated in accordance with
the terms thereof as if then redeemed, repaid or repurchased, and if
such price is based upon or measured by the fair market value of such
Capital Stock, such fair market value shall be as determined in good
faith by the Board of Directors or the board of directors of the issuer
of such Capital Stock;
(7) 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
Persons;
(8) all Indebtedness of other Persons to the extent Guaranteed
by such Person; and
(9) to the extent not otherwise included in this definition,
net Hedging Obligations of such Person, such obligations to be equal at
any time 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.
The amount of Indebtedness of any Person at any date shall be
determined as set forth above or otherwise provided in this Indenture, or
otherwise in accordance with GAAP.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $215,000,000 aggregate principal amount
of Notes issued under this Indenture on the date hereof.
14
"Initial Purchasers" means Lehman Brothers Inc., J.P. Morgan Securities
Inc. and UBS Securities LLC.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"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, including derivative agreements or arrangements, as to which
such Person is party or a beneficiary; provided, however, any such agreements
entered into in connection with the Notes shall not be included.
"Investment" in any Person by any other Person means any direct or
indirect advance, loan or other extension of credit (other than to customers,
suppliers, directors, officers or employees of any Person in the ordinary course
of business) 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. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Capital
Stock of any direct or indirect Restricted Subsidiary of the Company such that,
after giving effect to any such sale or disposition, such entity is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Capital Stock of such Subsidiary not sold or disposed of.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Leverage Ratio" means, on any date of determination, the ratio of:
(1) the aggregate amount of Indebtedness of the Company and
its Restricted Subsidiaries on a consolidated basis as of such date, to
(2) 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; provided, however, that:
(a) if since the beginning of such period the Company
or any Restricted Subsidiary has made any Asset Disposition of
any company or any business or any business segment, the
EBITDA for such period shall be reduced by an amount equal to
the EBITDA, if positive, directly attributable to the company,
business or business segment 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;
(b) if since the beginning of such period the Company
or any Restricted Subsidiary, by merger or otherwise, has made
an Investment in any Person that thereby becomes a Restricted
Subsidiary, or otherwise acquired any company or any business
or any business segment, including any such acquisition of
assets occurring in connection with a transaction causing a
calculation to be made hereunder, EBITDA 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
15
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
(c) 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, has made any Asset Disposition
or any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (a) or (b) above if
made by the Company or a Restricted Subsidiary during such
period, EBITDA 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 Asset Disposition,
Investment or acquisition of assets occurred on the first day
of such period.
"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.
"Liquidated Damages" means the liquidated damages then owing under the
Registration Rights Agreement.
"Mellon Letters of Credit" means the letter of credit facility between
Mellon Bank, N.A. and General Nutrition, Incorporated existing on the date of
this Indenture and the letters of credit issued thereunder.
"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 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 noncash form, therefrom, in each case net of:
(1) all legal, title and recording tax expenses, commissions
and other fees and expenses incurred, including, without limitation,
fees and expenses of legal counsel, accountants and financial advisors,
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;
(2) 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;
(3) 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 or to any other Person, other than the
Company or any Restricted Subsidiary, owning a beneficial interest in
the assets disposed of in such Asset Disposition; and
(4) 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.
16
"Net Cash Proceeds" means, with respect to any issuance or sale of any
securities of the Company or any Subsidiary by the Company or any Subsidiary, or
any capital contribution, the cash proceeds of such issuance, sale or
contribution net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees and expenses actually incurred in connection with such issuance, sale
or contribution and net of taxes paid or payable as a result thereof.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any Restricted
Subsidiary;
(a) provides any Guarantee or credit support of any
kind, including any undertaking, Guarantee, indemnity,
agreement or instrument that would constitute Indebtedness; or
(b) is directly or indirectly liable, as a guarantor
or otherwise; and
(2) no default with respect to which, including any rights
that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary, would permit, upon notice, lapse of time or
both, any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means, individually, any Guarantee of payment of the
Notes by a Guarantor pursuant to the terms of this Indenture, and, collectively,
all such Guarantees. Each such Guarantee will be in the form prescribed in this
Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes (and, in each case, any
Exchange Notes issued in exchange therefore) shall be treated as a single class
for all purposes under this Indenture, and unless the context otherwise
requires, all references to the Notes shall include the Initial Notes and any
Additional Notes (and, in each case, any Exchange Notes issued in exchange
therefore).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the Company's offering memorandum, dated
November 25, 2003, related to the issuance and sale of the Initial Notes.
"Officer" means the Chief Executive Officer, President, Chief Financial
Officer, any Vice President, Controller, Secretary or Treasurer of the Company.
"Officer's Certificate" means a certificate signed by at least one
Officer and that meets the requirements of Section 12.05 hereof.
"Opinion of Counsel" means a written opinion from legal counsel
satisfactory to the Trustee and that meets the requirements of Section 12.05
hereof. The counsel may be an employee of or counsel to the Company or the
Trustee.
17
"Parent" means General Nutrition Centers Holding Company and its
successors and assigns.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Holder" means Apollo.
"Permitted Investment" means:
(1) any Investment by the Company or any Restricted Subsidiary
in a Restricted Subsidiary, the Company or a Person that will, upon the
making of such Investment, become a Restricted Subsidiary;
(2) any Investment by the Company or any Restricted Subsidiary
in 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;
(3) any Investment by the Company or any Restricted Subsidiary
in Cash Equivalents;
(4) any Investment by the Company or any Restricted Subsidiary
in receivables owing to the Company or any Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade
terms as the Company or any such Restricted Subsidiary deems reasonable
under the circumstances;
(5) any Investment by the Company or any Restricted Subsidiary
in securities or other Investments received as consideration in sales
or other dispositions of property or assets made in compliance with the
provisions of Section 4.10 hereof;
(6) any Investment by the Company or any Restricted Subsidiary
in securities or other Investments received in settlement of debts
created in the ordinary course of business and owing to the Company or
any Restricted Subsidiary, or as a result of foreclosure, perfection or
enforcement of any Lien, or in satisfaction of judgments, including in
connection with any bankruptcy proceeding or other reorganization of
another Person;
(7) Investments in existence or made pursuant to legally
binding written commitments in existence on the date of this Indenture;
(8) any Investment by the Company or any Restricted Subsidiary
in Hedging Obligations, which obligations are Incurred in compliance
with the provisions of Section 4.09 hereof;
(9) any Investment by the Company or any Restricted Subsidiary
in pledges or deposits:
(a) with respect to leases or utilities provided to
third parties in the ordinary course of business; or
(b) otherwise described in the definition of
"Permitted Liens;"
(10) Investments in a Related Business in an amount not to
exceed $35 million (measured at the time each such Investment is made
without giving effect to subsequent changes in value) in
18
the aggregate at any time outstanding (after giving effect to any such
Investments that are returned to the Company or any Restricted
Subsidiary, including through redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary);
(11) loans by the Company or any Restricted Subsidiary to
franchisees in an aggregate principal amount not to exceed $75 million
at any one time outstanding;
(12) the acquisition by a Receivables Subsidiary in connection
with a Qualified Receivables Transaction of Capital Stock of a trust or
other Person established by such Receivables Subsidiary to effect such
Qualified Receivables Transaction; and any other Investment by the
Company or a Restricted Subsidiary of the Company in a Receivables
Subsidiary or any Investment by a Receivables Subsidiary in any other
Person in connection with a Qualified Receivables Transaction; provided
that such other Investment is in the form of a note or other instrument
that the Receivables Subsidiary or other Person is required to repay as
soon as practicable from available cash collections less amounts
required to be established as reserves pursuant to contractual
agreements with entities that are not Affiliates of the Company entered
into as part of a Qualified Receivables Transaction;
(13) any Investment in exchange for, or out of the net
proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company or an employee stock ownership plan or
similar trust) of Capital Stock of the Company (other than Disqualified
Stock); provided that the amount of any Net Cash Proceeds that are
utilized for any such Investment will be excluded from clause 3(B) of
Section 4.07(a) hereof; provided, however, that the value of any
non-cash net proceeds shall be as conclusively determined by the Board
of Directors in good faith, except that in the event the value of any
non-cash proceeds shall be $20 million or more, the value shall be as
determined in writing by an independent investment banking firm of
nationally recognized standing;
(14) any sublease of real property to a franchisee, any
advertising cooperative with franchisees and any trade credit extended
to franchisees, in each case in the ordinary course of business;
(15) any Investments received in compromise or resolution of
(a) obligations of trade creditors or customers that were incurred in
the ordinary course of business of the Company or any Restricted
Subsidiary, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or
customer; or (b) litigation, arbitration or other disputes with Persons
who are not Affiliates; and
(16) any Investments representing amounts held for employees
of the Company and its Restricted Subsidiaries under the Company's
deferred compensation plan; provided that the amount of such
Investments (excluding income earned thereon) shall not exceed the
amount otherwise payable to such employees the payment of which was
deferred under such plan and any amounts matched by the Company under
such plan.
"Permitted Junior Securities" means (1) common equity interests in the
Company or any Guarantor or (2) debt or preferred equity securities of the
Company or any Guarantor issued pursuant to a plan of reorganization consented
to by each class of Senior Indebtedness; provided that all such securities are
subordinated to all Senior Indebtedness and any debt securities issued in
exchange for Senior Indebtedness to substantially the same extent as, or to a
greater extent than, the Notes and the Guarantees are subordinated to Senior
Indebtedness under this Indenture.
19
"Permitted Liens" means:
(1) Liens on properties or assets of (a) the Company securing
Senior Indebtedness and (b) any Guarantor securing Guarantor Senior
Indebtedness, in each case, that was permitted by the terms of this
Indenture to be incurred;
(2) Liens for taxes, assessments or other governmental charges
not yet delinquent or the nonpayment of which in the aggregate would
not be reasonably expected to have a material adverse effect on the
Company and its Restricted Subsidiaries, or that are being contested in
good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or such
Subsidiary, as the case may be, in accordance with GAAP;
(3) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations that are not overdue for a
period of more than 60 days or that are bonded or that are being
contested in good faith and by appropriate proceedings;
(4) pledges, deposits or Liens in connection with workers'
compensation, unemployment insurance and other social security
legislation and/or similar legislation or other insurance-related
obligations, including, without limitation, pledges or deposits
securing liability to insurance carriers under insurance or
self-insurance arrangements;
(5) pledges, deposits or Liens to secure the performance of
bids, tenders, trade, government or other contracts, other than for
borrowed money, obligations and deposits for or under or in respect of
utilities, leases, licenses, statutory obligations, surety, judgment
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(6) easements, including reciprocal easement agreements,
rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments,
changes, and other similar encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of
business, which do not in the aggregate materially interfere with the
ordinary conduct of the business of the Company and its Subsidiaries,
taken as a whole;
(7) Liens existing on, or provided for underwritten
arrangements existing on, the date of this Indenture, or, in the case
of any such Liens securing Indebtedness of the Company or any of its
Subsidiaries existing or arising under written arrangements existing on
the date of this Indenture, securing any Refinancing Indebtedness in
respect of such Indebtedness so long as the Lien securing such
Refinancing Indebtedness is limited to all or part of the same property
or assets, plus improvements, accessions, proceeds or dividends or
distributions in respect thereof, that secured, or under such written
arrangements could secure, the original Indebtedness;
(8) Liens securing Hedging Obligations Incurred in compliance
with the provisions of Section 4.09 hereof;
(9) Liens arising out of judgments, decrees, orders or awards
in respect of which the Company shall in good faith be prosecuting an
appeal or proceedings for review which appeal or proceedings shall not
have been finally terminated, or the period within which such appeal or
proceedings may be initiated shall not have expired and Liens arising
from final judgments only to the extent, in an amount and for a period
not resulting in an Event of Default with respect thereto;
20
(10) Liens existing on property or assets of a Person at the
time such Person becomes a Subsidiary of the Company, or at the time
the Company or a Restricted Subsidiary acquires such property or
assets; provided, however, that such Liens are not created in
connection with, or in contemplation of, such other Person becoming
such a Subsidiary, or such acquisition of such property or assets, and
that such Liens are limited to all or part of the same property or
assets, plus improvements, accessions, proceeds or dividends or
distributions in respect thereof, that secured, or, under the written
arrangements under which such Liens arose, could secure, the
obligations to which such Liens relate;
(11) Liens on Capital Stock of an Unrestricted Subsidiary that
secure Indebtedness or other obligations of such Unrestricted
Subsidiary;
(12) Liens securing the Notes or the Note Guarantees;
(13) Liens on assets of the Company or a Receivables
Subsidiary incurred in connection with a Qualified Receivables
Transaction;
(14) Liens securing Refinancing Indebtedness Incurred in
respect of any Indebtedness secured by, or securing any refinancing,
refunding, extension, renewal or replacement, in whole or in part, of
any other obligation secured by, any other Permitted Liens; provided
that any such new Lien is limited to all or part of the same property
or assets, plus improvements, accessions, proceeds or dividends or
distributions in respect thereof, that secured, or, under the written
arrangements under which the original Lien arose, could secure, the
obligations to which such Liens relate;
(15) survey exceptions, easements or reservations of, or
rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real property that were not
incurred in connection with Indebtedness and that do not in the
aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such
Person;
(16) Liens to secure Indebtedness permitted by clause (7) of
paragraph (b) of Section 4.09 hereof; provided that (a) any such Lien
attaches to such assets concurrently with or within 180 days after the
acquisition, construction or capital improvement thereof, (b) such Lien
attaches solely to the assets so acquired, constructed or improved in
such transaction and (c) the principal amount of the Indebtedness
secured thereby does not exceed 100% of the cost of such assets;
(17) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for sale of goods in the ordinary
course of business;
(18) licenses of intellectual property granted in the ordinary
course of business;
(19) Liens in favor of customs or revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods; and
(20) Liens in favor the Company or any Restricted Subsidiary.
21
"Permitted Payments to Parent" means, without duplication as to
amounts:
(1) payments to the Parent to permit the Parent to pay
reasonable directors fees and expenses when due and reasonable
accounting, legal and administrative expenses of the Parent when due in
an aggregate amount not to exceed $250,000 per annum; and
(2) for so long as the Company is a member of a group filing a
consolidated, combined or other similar group tax return with the
Parent, payments to the Parent in respect of an allocable portion of
the tax liabilities of such group that is attributable to the Company
and its Subsidiaries ("Tax Payments"). The Tax Payments shall not
exceed the lesser of (i) the amount of the relevant tax (including any
penalties and interest) that the Company would owe if the Company and
its Subsidiaries were filing a separate tax return (or a separate
consolidated or combined return with its Subsidiaries that are members
of the consolidated or combined group), taking into account any
carryovers and carrybacks of tax attributes (such as net operating
losses) of the Company and such Subsidiaries from other taxable years
(as reduced by the use of such carryovers and carrybacks by the group
of which the Parent is a member) and (ii) the amount of the relevant
tax, taking into account any allowed tax credits, that the Parent
actually owes to the appropriate taxing authority. Any Tax Payments
received from the Company shall be paid over to the appropriate taxing
authority within 30 days of the Parent's receipt of such Tax Payments
or refunded to the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability 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 Placement Legend" means the legend set forth in Section
2.06(g)(1) hereof to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions entered into by the Company or any of its Restricted Subsidiaries
pursuant to which the Company or any of its Restricted Subsidiaries sells,
conveys or otherwise transfers to (1) a Receivables Subsidiary (in the case of a
transfer by the Company or any of its Restricted Subsidiaries) and (2) any other
Person (in the case of a transfer by a Receivables Subsidiary), or grants a
security interest in, any franchise accounts receivable (whether now existing or
arising in the future) of the Company or any of its Restricted Subsidiaries, and
any assets related thereto including, without limitation, all collateral
securing such franchise accounts receivable, all contracts and all guarantees or
other obligations in respect of such franchise accounts receivable, proceeds of
such franchise accounts receivable and other assets that are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving franchise accounts
receivable.
"Receivables Subsidiary" means a Restricted Subsidiary that engages in
no activities other than in connection with the financing of franchise accounts
receivable and that is designated by the Board of Directors (as provided below)
as a Receivables Subsidiary:
22
(1) no portion of the Indebtedness or any other Obligations
(contingent or otherwise) of which:
(a) is guaranteed by the Company or any Restricted
Subsidiary (excluding guarantees of Obligations (other than
the principal of, and interest on, Indebtedness) pursuant to
representations, warranties, covenants and indemnities entered
into in the ordinary course of business in connection with a
Qualified Receivables Transaction);
(b) is recourse to or obligates the Company or any
Restricted Subsidiary in any way other than pursuant to
representations, warranties, covenants and indemnities entered
into in the ordinary course of business in connection with a
Qualified Receivables Transaction; or
(c) subjects any property or asset of the Company or
any Restricted Subsidiary (other than franchise accounts
receivable and related assets as provided in the definition of
"Qualified Receivables Transaction"), directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other
than pursuant to representations, warranties, covenants and
indemnities entered into in the ordinary course of business in
connection with a Qualified Receivables Transaction;
(2) with which neither the Company nor any Restricted
Subsidiary has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the Company or
such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company, other than
fees payable in the ordinary course of business in connection with
servicing franchise accounts receivable; and
(3) with which neither the Company nor any Restricted
Subsidiary has any obligation to maintain or preserve such Subsidiary's
financial condition or cause such Subsidiary to achieve certain levels
of operating results. Any such designation by the Board of Directors
will be evidenced to the Trustee by filing with the Trustee a certified
copy of the resolution of the Board of Directors giving effect to such
designation and an Officer's Certificate certifying that such
designation complied with the foregoing conditions.
"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 date of this
Indenture or Incurred in compliance with this Indenture, including Indebtedness
of the Company that refinances Indebtedness of any Restricted Subsidiary, to the
extent permitted in this Indenture, and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary,
including Indebtedness that refinances Refinancing Indebtedness; provided,
however, that:
(1) the Refinancing Indebtedness has a Stated Maturity no
earlier than the Stated Maturity of the Indebtedness being refinanced;
(2) 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;
(3) if the Indebtedness being refunded, refinanced, replaced,
renewed, repaid, extended, defeased or discharged is Subordinated
Obligations, such Refinancing Indebtedness is subordinated in right of
payment to the Notes on terms at least as favorable to the Holders of
23
Notes as those contained in the documentation governing the
Indebtedness being refunded, refinanced, replaced, renewed, repaid,
extended, defeased or discharged;
(4) 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, or if issued with original issue discount, the
aggregate accreted value, then outstanding of the Indebtedness being
refinanced, plus fees, underwriting discounts, premiums and other costs
and expenses Incurred in connection with such Refinancing Indebtedness;
provided further, however, that Refinancing Indebtedness shall not
include:
(a) Indebtedness of a Restricted Subsidiary that
refinances Indebtedness of the Company; or
(b) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted
Subsidiary; and
(5) in the case of Indebtedness of the Company or a Guarantor,
such Refinancing Indebtedness is Incurred by the Company, a Guarantor
or by the Subsidiary who is the obligor on the Indebtedness being
refinanced.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 5, 2003, among the Company, the Guarantors and
the Initial Purchasers, as such agreement may be amended, modified or
supplemented from time to time and, with respect to any Additional Notes, one or
more registration rights agreements among the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit A2 hereto deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
"Related Business" means those businesses in which the Company or any
of its Subsidiaries is engaged on the date of this Indenture or that are
reasonably related or incidental thereto.
"Related Party" means:
(1) any controlling equityholder, 80% (or more) owned
Subsidiary, or immediate family member (in the case of an individual)
of any Permitted Holder; or
24
(2) any trust, corporation, partnership, limited liability
company or other entity, the beneficiaries, stockholders, partners,
members, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of any one or more Permitted
Holders and/or such other Persons referred to in the immediately
preceding clause (1).
"Representative" means the trustee, agent or representative, if any,
for an issue of Senior Indebtedness.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Restricted Subsidiary" means any Subsidiary of the Company other than
as Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Secured Indebtedness" means any Indebtedness of the Company or its
Subsidiaries secured by a Lien.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Agreement" means the credit agreement to be dated on or
about the date of this Indenture, among the Company, the Parent, the banks and
other financial institutions party thereto from time to time, Lehman Commercial
Paper Inc., as administrative agent, JPMorgan Chase Bank, as syndication agent,
and the other parties thereto, as such agreement may be assumed by any successor
in interest, and as such agreement may be amended, supplemented, waived or
otherwise modified from time to time, or refunded, refinanced, restructured,
replaced, renewed, repaid, increased or extended from time to time (whether in
whole or in part, whether with the Company, or any subsidiary of the Company as
borrower, whether with the original agent and lenders or other agents and
lenders or otherwise, and whether provided under the original Senior Credit
Agreement or otherwise).
"Senior Credit Facility" means the collective reference to the Senior
Credit Agreement, any Loan Documents, as defined therein, any notes and letters
of credit issued pursuant thereto and any guarantee and collateral agreement,
intellectual property security agreement, mortgages, letter of credit
applications and other security agreements and collateral documents, and other
instruments and documents, executed and delivered pursuant to or in connection
with any of the foregoing, in each case as the same may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time, whether in
25
whole or in part, whether with the original agent and lenders or other agents
and lenders or otherwise, and whether provided under the original Senior Credit
Agreement or otherwise. Without limiting the generality of the foregoing, the
term "Senior Credit Facility" shall include any agreement:
(1) changing the maturity of any Indebtedness Incurred
thereunder or contemplated thereby;
(2) adding Subsidiaries of the Company as additional borrowers
or guarantors thereunder;
(3) increasing the amount of Indebtedness Incurred thereunder
or available to be borrowed thereunder; or
(4) otherwise altering the terms and conditions thereof.
"Senior Indebtedness" means the following obligations of the Company,
whether outstanding on the date of this Indenture or thereafter Incurred,
without duplication:
(1) Bank Indebtedness; and
(2) all obligations consisting of the principal of and premium
and liquidated damages, if any, and accrued and unpaid interest,
including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company regardless of
whether post-filing interest is allowed in such proceeding, on, and
fees and other amounts owing in respect of, all other Indebtedness of
the Company, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is expressly provided
that the obligations in respect of such Indebtedness are not senior in
right of payment to the Notes; provided, however, that Senior
Indebtedness will not include:
(a) any obligations of the Company to any Subsidiary
or any other Affiliate of the Company, or any such Affiliate's
Subsidiaries;
(b) any liability for Federal, state, foreign, local
or other taxes owed or owing by the Company;
(c) any accounts payable or other liability to trade
creditors arising in the ordinary course of business,
including Guarantees thereof or instruments evidencing such
liabilities;
(d) any Indebtedness, Guarantee or obligation of the
Company that is expressly subordinate or junior to any other
Indebtedness, Guarantee or obligation of the Company,
including any Senior Subordinated Indebtedness and any
Subordinated Obligations of the Company;
(e) Indebtedness that is represented by redeemable
Capital Stock; or
(f) that portion of any Indebtedness that is Incurred
in violation of this Indenture; provided that Indebtedness
under the Senior Credit Facility will not cease to be Senior
Indebtedness under this clause (f) if the lenders of such
Indebtedness obtained a certificate from an Officer of the
Company as of the date of Incurrence of such Indebtedness to
the effect that such Indebtedness was permitted to be Incurred
by this Indenture.
26
If any Designated Senior Indebtedness is disallowed, avoided or
subordinated pursuant to the provisions of Section 548 of Title 11 of the U.S.
Code or any applicable state fraudulent conveyance law, such Designated Senior
Indebtedness nevertheless will constitute Senior Indebtedness.
"Senior Subordinated Indebtedness" means the Notes and any other
Indebtedness of the Company, whether outstanding on the date of this Indenture
or thereafter Incurred, that:
(1) specifically provides that such Indebtedness is to rank
pari passu in right of payment with the Notes; and
(2) is not expressly subordinated by its terms in right of
payment to any Indebtedness or other obligation of the Company that is
not Senior Indebtedness.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means:
(1) any Subsidiary that would be a "significant subsidiary" as
defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant
to the Securities Act, as such Regulation is in effect on the date of
this Indenture; and
(2) any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc., and its successors.
"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 Obligation" means any Indebtedness of the Company or any
Guarantor, whether outstanding on the date of this Indenture or thereafter
Incurred, which is expressly subordinate or junior in right of payment to the
Notes or the Note Guarantees pursuant to a written agreement.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency and
after giving effect to any voting agreement or stockholders' agreement
that effectively transfers voting power) to vote in the election of
directors, managers or trustees of the corporation, association or
other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of
that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that Person
or one or more Subsidiaries of that Person (or any combination
thereof).
27
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"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 U.S. Bank National Association until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Unrestricted Definitive Note" means a Definitive Note that does not
bear and is not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a Global Note that does not bear and
is not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the
Company, including any newly acquired or newly formed Subsidiary of the
Company, to be an Unrestricted Subsidiary unless at the time of such
designation such Subsidiary or any of its Subsidiaries owns any Capital
Stock or Indebtedness of, or owns or holds any Lien on any property of,
the Company or any other Subsidiary of the Company that is not a
Subsidiary of the Subsidiary to be so designated; provided, however,
that either:
(a) the Subsidiary to be so designated has total
consolidated assets of $100,000 or less; or
(b) if such Subsidiary has consolidated assets
greater than $100,000, then such designation would be
permitted under the provisions of Section 4.07 hereof.
The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation:
(a) the Company could Incur at least $1.00 of
additional Indebtedness under paragraph (a) of Section 4.09
hereof; and
(b) no Default or Event of Default shall have
occurred and be continuing.
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Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution of the
Company's Board of Directors giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Person" means a U.S. Person as defined in Rule 902(k) promulgated
under the Securities Act.
"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
all the Capital Stock of which, other than directors' qualifying shares, is
owned by the Company or another Wholly Owned Subsidiary.
Section 1.02 Other Definitions.
Defined in
Term Section
---- ------
"Affiliate Transaction"............................................................. 4.11
"Asset Disposition Offer"........................................................... 3.09
"Authentication Order".............................................................. 2.02
"Blockage Notice"................................................................... 10.03
"Change of Control Offer"........................................................... 4.15
"Change of Control Payment"......................................................... 4.15
"Change of Control Payment Date".................................................... 4.15
"Covenant Defeasance"............................................................... 8.03
"DTC"............................................................................... 2.03
"Event of Default".................................................................. 6.01
"Excess Proceeds"................................................................... 4.10
"Fairness Opinion".................................................................. 4.11
"incur"............................................................................. 4.09
"Initial Agreement"................................................................. 4.08
"Legal Defeasance".................................................................. 8.02
"Offer Amount"...................................................................... 3.09
"Offer Period"...................................................................... 3.09
"Paying Agent"...................................................................... 2.03
"Permitted Debt".................................................................... 4.09
"Payment Blockage Notice"........................................................... 10.03
"Payment Default" .................................................................. 6.01
"Purchase Date"..................................................................... 3.09
"Redemption Date" .................................................................. 3.07
"Refinancing Agreement"............................................................. 4.08
"Registrar"......................................................................... 2.03
"Restricted Payments"............................................................... 4.07
"Successor Company"................................................................. 5.01
Section 1.03 Incorporation by Reference of Trust Indenture Act.
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Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions;
and
(7) references to sections of or rules under the Securities
Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
will be substantially in the form of Exhibits A1 and A2 hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note will be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture, and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the
30
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in
the form of Exhibits A1 or A2 hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A1 hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary
Global Note, which will be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Restricted Period will be terminated upon
the receipt by the Trustee of any certificates identified by the Company or its
counsel to be required pursuant to Rule 903(b)(3)(ii)(B) under the Securities
Act, which may include certificates from Euroclear or Clearstream, as the case
may be, certifying that it has received certification of non-United States
beneficial ownership of 100% of the aggregate principal amount of the Regulation
S Temporary Global Note (except to the extent of any beneficial owners thereof
who acquired an interest therein during the Restricted Period pursuant to
another exemption from registration under the Securities Act and who will take
delivery of a beneficial ownership interest in a 144A Global Note or an IAI
Global Note bearing a Private Placement Legend, all as contemplated by Section
2.06(b) hereof).
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in the Regulation S Permanent Global Note pursuant to the
Applicable Procedures. Simultaneously with the authentication of the Regulation
S Permanent Global Note, the Trustee will cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary Global
Note and the Regulation S Permanent Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.
(1) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Note that are held by Participants through
Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
At least one Officer must sign the Notes for the Company by manual or
facsimile signature.
31
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed
by one Officer (an "Authentication Order"), authenticate Notes for original
issue that may be validly issued under this Indenture, including any Additional
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed the aggregate principal amount of Notes authorized for issuance by the
Company pursuant to one or more Authentication Orders, except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders, the
Company or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar will keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company will notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
32
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary;
(2) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee; provided that in no event shall the Regulation S Temporary
Global Note be exchanged by the Company for Definitive Notes prior to
(A) the expiration of the Restricted Period and (B) the receipt by the
Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act; or
(3) upon request of the Trustee or the Holders of at least a
majority in aggregate principal amount of outstanding Notes, if there
has occurred and is continuing a Default or Event of Default with
respect to the Notes.
Upon the occurrence of any of the preceding events in (1), (2) or (3)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Definitive Notes
delivered in exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the Depositary (in accordance with its customary
procedures) and will bear the Private Placement Legend and the Regulation S
Temporary Legend unless those legends are not required by applicable law.
Every Note authenticated and delivered in exchange for, or in lieu of,
a Global Note or any portion thereof, pursuant to this Section 2.06 or Section
2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and
shall be, a Global Note. A Global Note may not be exchanged for another Note
other than as provided in this Section 2.06(a), however, beneficial interests in
a Global Note may be transferred and exchanged as provided in Section 2.06(b),
(c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will
33
require compliance with either subparagraph (1) or (2) below, as applicable, as
well as one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Regulation S Temporary
Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(1) above,
the transferor of such beneficial interest must deliver to the
Registrar either:
(A) both:
(i) a written order from a Participant
or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an
amount equal to the beneficial interest to be
transferred or exchanged; and
(ii) instructions given in accordance
with the Applicable Procedures containing information
regarding the Participant account to be credited with
such increase; or
(B) both:
(i) a written order from a Participant
or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing
the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to
be transferred or exchanged; and
(ii) instructions given by the Depositary
to the Registrar containing information regarding the
Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange
referred to in (1) above;
provided that in no event shall Definitive Notes be issued upon the transfer or
exchange of beneficial interests in the Regulation S Temporary Global Note prior
to (A) the expiration of the Restricted Period and (B) the receipt by the
Registrar of any certificates required pursuant to Rule 903 under the Securities
Act. Upon consummation of an Exchange Offer by the Company in accordance with
Section 2.06(f) hereof, the requirements of this Section 2.06(b)(2) shall be
deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.06(h) hereof.
34
(3) Transfer of Beneficial Interests to Another Restricted Global Note.
A beneficial interest in any Restricted Global Note may be transferred to a
Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements of
Section 2.06(b)(2) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Permanent Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Global Note or transferred
to a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
the holder of the beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
or
(ii) if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
35
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if such beneficial interest is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
36
(G) if such beneficial interest is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Global Note
to Definitive Notes. Notwithstanding Sections 2.06(c)(1)(A) and (C)
hereof, a beneficial interest in the Regulation S Temporary Global Note
may not be exchanged for a Definitive Note or transferred to a Person
who takes delivery thereof in the form of a Definitive Note prior to
(A) the expiration of the Restricted Period and (B) the receipt by the
Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act, except in the case of a
transfer pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 903 or Rule 904.
(3) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for an Unrestricted
Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
37
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such
holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(4) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(2) hereof, the Trustee will cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company will execute and the Trustee
will authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 2.06(c)(4) will be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest requests through instructions to the Registrar from
or through the Depositary and the Participant or Indirect Participant.
The Trustee will deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(4)
will not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial interest
in a Restricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with
38
Rule 144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case of
an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is
not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive
Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit
C hereto, including the certifications in item (1)(c)
thereof; or
(ii) if the Holder of such Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of a
beneficial
39
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee will cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not
yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to
Rule 144A, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if the transfer will be made pursuant to
Rule 903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
40
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case of
an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is
not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to
the Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
or
(ii) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
41
(1) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes accepted for exchange in the
Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that (A) they are not Broker-Dealers, (B) they are not
participating in a distribution of the Exchange Notes and (C) they are
not affiliates (as defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes
accepted for exchange in the Exchange Offer by Persons that certify in
the applicable Letters of Transmittal that (A) they are not
Broker-Dealers, (B) they are not participating in a distribution of the
Exchange Notes and (C) they are not affiliates (as defined in Rule 144)
of the Company.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive Note (and all
Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (4) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT, IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (5) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (BASED UPON AN OPINION OF COUNSEL IF GENERAL NUTRITION CENTERS,
INC. SO REQUESTS) OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF
THE STATES OF THE UNITED STATES."
(B) Notwithstanding the foregoing, any Global
Note or Definitive Note issued pursuant to subparagraphs
(b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f)
of this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) will not bear the Private
Placement Legend.
42
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF GENERAL NUTRITION CENTERS, INC.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Regulation S Temporary Global Note Legend. The Regulation
S Temporary Global Note will bear a Legend in substantially the
following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST HEREON. DURING THE PERIOD WHICH SUCH HOLDER
HOLDS THIS NOTE NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such
43
other Global Note will be increased accordingly and an endorsement will be made
on such Global Note by the Trustee or by the Depositary at the direction of the
Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Company will execute and the Trustee will authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance
with Section 2.02 hereof or at the Registrar's request.
(2) No service charge will be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15
and 9.05 hereof).
(3) The Registrar will not be required to register the
transfer of or exchange of any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in
part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture,
as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(5) Neither the Registrar nor the Company will be required:
(A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close
of business on the day of selection;
(B) to register the transfer of or to exchange
any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a
Note between a record date and the next succeeding interest
payment date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
44
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence (which evidence may be from the Trustee) to its
satisfaction of the destruction, loss or theft of any Note, the Company will
issue and the Trustee, upon receipt of an Authentication Order, will
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an affidavit of lost certificate and/or
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if
a Note is replaced. The Company may charge for its expenses in replacing a Note,
including reasonable fees and expenses of its counsel and of the Trustee and its
counsel.
Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee (including any Note represented by a Global Note) except for those
canceled by it or at its direction, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes will be deemed to be no longer outstanding and will cease to accrue
interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any Guarantor, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Guarantor, will be considered as though not outstanding, except that for the
purposes of determining whether the Trustee will be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without
45
unreasonable delay, the Company will prepare and the Trustee will authenticate
definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else will cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and will destroy canceled Notes
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all canceled Notes will be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13 Issuance of Additional Notes.
The Company will be entitled, upon delivery of an Officer's
Certificate, Opinion of Counsel and Authentication Order, subject to its
compliance with Section 4.09 hereof, to issue Additional Notes under this
Indenture which will have identical terms as the Initial Notes issued on the
date of this Indenture, other than with respect to the date of issuance and
issue price.
With respect to any Additional Notes, the Company will set forth in a
resolution of its Board of Directors and an Officer's Certificate, a copy of
each of which shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Notes to
be authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date and the CUSIP number of
such Additional Notes; and
(3) whether such Additional Notes shall be transfer restricted
Notes and issued in the form of Initial Notes as set forth in Section
2.02 of this Indenture or shall be issued in the form of Exchange
Notes.
46
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 30 days (unless a shorter period is acceptable to the Trustee) but not
more than 60 days (unless a longer period is acceptable to the Trustee) before a
redemption date, an Officer's Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
purchase on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 90 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 90 days before a redemption date, the Company will mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 90 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Articles 8 or 12 hereof.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
47
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days (unless a shorter period
is acceptable to the Trustee) prior to the redemption date, an Officer's
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional. At any time prior to the mailing of a notice of redemption to the
Holders pursuant to Section 3.03 hereof, the Company may withdraw, revoke or
rescind any notice of redemption delivered to the Trustee without any continuing
obligation to redeem the Notes as contemplated by such notice of redemption.
Section 3.05 Deposit of Redemption or Purchase Price.
At or before 10:00 a.m. Eastern Time on the redemption or purchase
date, the Company will deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption or purchase price of and accrued and unpaid
interest and Liquidated Damages, if any, on all Notes to be redeemed or
purchased on that date. The Trustee or the Paying Agent will promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption or purchase
price of, and accrued and unpaid interest and Liquidated Damages, if any, on,
all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase. If a Note
is redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called
48
for redemption or purchase is not so paid upon surrender for redemption or
purchase because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
or purchase date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder at the expense of the Company, a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to December 1, 2006, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 108.500% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the redemption date, with the Net Cash Proceeds of one or more Equity
Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes
originally issued under this Indenture (excluding Notes held by the
Company and its Subsidiaries) remains outstanding immediately after the
occurrence of such redemption; and
(2) the redemption occurs within 60 days after the date of the
closing of such Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes will not be
redeemable at the Company's option prior to December 1, 2007.
(c) On or after December 1, 2007 and prior to maturity, the Company
may, at its option, redeem all or a part of the Notes at any time and from time
to time upon not less than 30 nor more than 90 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes
redeemed to the applicable redemption date, if redeemed during the twelve-month
period beginning on December 1 of the years indicated below, subject to the
rights of Holders on the relevant record date to receive interest on the
relevant interest payment date:
Year Percentage
- ---- ----------
2007........................................................................................... 104.250%
2008........................................................................................... 102.125%
2009 and thereafter............................................................................ 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Sections 3.01 through 3.06 hereof.
49
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset
Disposition Offer"), it will follow the procedures specified below.
The Asset Disposition Offer shall be made to all Holders and all
holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem at a purchase price of 100% of the principal amount
thereof plus accrued and unpaid interest to the Purchase Date and liquidated
damages, if any, with the proceeds of sales of assets. The Company will comply
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of Notes
pursuant to this Section 3.09 and Section 4.10 hereof, in each case, to the
extent applicable. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.09 or Section 4.10
hereof, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
Section or Section 4.10 hereof as a results of such compliance. Payment for any
Notes so purchased will be made in the same manner as interest payments are
made.
If the date on which Notes are purchased pursuant to an Asset
Disposition Offer (the "Purchase Date") is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest and Liquidated Damages, if any, will be paid to the Person in whose
name a Note is registered at the close of business on such record date, and no
additional interest will be payable to Holders who tender Notes pursuant to the
Asset Disposition Offer.
Upon the commencement of an Asset Disposition Offer, the Company will
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice will contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset
Disposition Offer. The notice, which will govern the terms of the Asset
Disposition Offer, will state:
(1) that the Asset Disposition Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time the
Asset Disposition Offer will remain open;
(2) the offer amount, which shall equal the amount of all
Excess Proceeds (the "Offer Amount"), the purchase price and the
Purchase Date;
(3) that any Note not tendered or accepted for payment will
continue to accrue interest and Liquidated Damages, if any;
(4) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Disposition Offer
will cease to accrue interest and Liquidated Damages, if any, after the
Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to
an Asset Disposition Offer may elect to have Notes purchased in
integral multiples of $1,000 only;
50
(6) the instructions determined by the Company, consistent
with Section 4.10 and this Section 3.09, that a Holder must follow to
have its Notes purchased;
(7) that, if the aggregate principal amount of Notes and other
pari passu Indebtedness surrendered in connection with the Asset
Disposition Offer thereof exceeds the Offer Amount, the Company will
select the Notes and other pari passu Indebtedness to be purchased on a
pro rata basis based on the principal amount of Notes and such other
pari passu Indebtedness surrendered (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations
of $1,000, or integral multiples thereof, will be purchased); and
(8) that Holders whose Notes were purchased only in part will
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof properly tendered and not withdrawn pursuant
to the Asset Disposition Offer, or if less than the Offer Amount has been
tendered, all Notes properly tendered and not withdrawn and will deliver or
cause to be delivered to the Trustee the Notes properly accepted together with
an Officer's Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section
3.09. The Company, the Depositary or the Paying Agent, as the case may be, will
promptly mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, and the Company will promptly issue a new Note, and the Trustee,
upon written request from the Company, will authenticate and mail or deliver (or
cause to be transferred by book entry) such new Note to such Holder, in a
principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company will publicly announce the results of the Asset
Disposition Offer on or about the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Liquidated Damages, if any, on, the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
and Liquidated Damages, if any will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
11:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company will pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
at the rate equal to the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
51
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company will furnish to the Holders of
Notes or cause the Trustee to furnish to the Holders of Notes, within the time
periods specified in the SEC's rules and regulations:
(1) all quarterly and annual reports that would be required to
be filed with the SEC on Forms 10-Q and 10-K if the Company were
required to file such reports and, with respect to the annual
information only, a report on the Company's consolidated financial
statements by the Company's certified independent accountants; and
(2) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports.
All such reports will be prepared in all material respects in
accordance with all of the rules and regulations of the Exchange Act applicable
to such reports.
In addition, following the consummation of the Exchange Offer
contemplated by the Registration Rights Agreement, the Company will file a copy
of each of the reports referred to in clauses (1) and (2) above with the SEC for
public availability within the time periods specified in the rules and
regulations applicable to such reports (unless the SEC will not accept such a
filing) and will make such information available to securities analysts and
prospective investors upon request. The Company will at all times comply with
TIA Section 314(a).
If, at any time after consummation of the Exchange Offer contemplated
by the Registration Rights Agreement, the Company is no longer subject to the
periodic reporting requirements of the Exchange Act for any reason, the Company
will nevertheless continue filing the reports specified in the preceding
paragraphs with the SEC within the time periods specified above unless the SEC
will not accept such a filing. The Company will not take any action for the
purpose of causing the SEC not to accept any such filings. If, notwithstanding
the foregoing, the SEC will not accept the Company's filings
52
for any reason, the Company will post the reports referred to in the preceding
paragraphs on its website within the time periods that would apply if the
Company were required to file those reports with the SEC.
(b) For so long as any Notes remain outstanding, if at any time the
Company and the Guarantors are not required to file with the SEC the reports
required by paragraphs (a) and (b) of this Section 4.03, the Company and the
Guarantors will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officer's Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing Officer
with a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default has occurred, describing all such Defaults or
Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto).
(b) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, within 30 days after the occurrence of any Default or
Event of Default, an Officer's Certificate specifying such Default or Event of
Default, its status and what action the Company is taking or proposes to take
with respect thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment would not have a material adverse
effect on the ability of the Company and the Guarantors to satisfy their
obligations under the Notes, the Guarantees and this Indenture.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted
Subsidiaries to, take any of the following actions:
53
(i) declare or pay any dividend or make any
other payment or distribution on account of the
Company's or any of its Restricted Subsidiaries'
Capital Stock (including, without limitation, any
payment in connection with any merger or
consolidation involving the Company or any of its
Restricted Subsidiaries) or to the direct or indirect
holders of the Company's or any of its Restricted
Subsidiaries' Capital Stock in their capacity as such
(other than dividends or distributions payable in
Capital Stock (other than Disqualified Stock) of the
Company or to the Company or a Restricted Subsidiary
and other than payments of dividends on, and
mandatory repurchases at Stated Maturity of,
Disqualified Stock that was issued after the date of
this Indenture in compliance with Section 4.09
hereof);
(ii) purchase, redeem, retire or otherwise
acquire for value (including, without limitation, in
connection with any merger or consolidation involving
the Company) any Capital Stock of the Company, of any
direct or indirect parent of the Company or of any
Restricted Subsidiary held by Persons other than the
Company or another Restricted Subsidiary;
(iii) purchase, repurchase, redeem, defease
or otherwise acquire or retire for value any
Subordinated Obligation before scheduled maturity,
scheduled repayment or scheduled sinking fund
payment; provided that this restriction does not
apply to a purchase, repurchase, redemption or other
acquisition made in anticipation of satisfying a
sinking fund obligation, principal installment or
final maturity, in each case due within one year of
the date of such purchase, repurchase, redemption or
acquisition; or
(iv) make any Restricted Investment (all
such payments and other actions set forth in these
clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"),
if at the time the Company or its Restricted Subsidiary makes a
Restricted Payment:
(1) a Default occurs and continues to occur or would result
therefrom;
(2) the Company could not Incur at least $1.00 of additional
Indebtedness under paragraph (a) of Section 4.09 hereof; or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made after the date of this
Indenture (excluding Restricted Payments permitted by clauses (1), (2),
(3), (5), and (6) of paragraph (b) of this Section 4.07) would exceed,
without duplication, the sum of:
(A) 50% of the Consolidated Net Income of the Company
accrued during the period, treated as one accounting period,
from the beginning of the first fiscal quarter commencing
after the date of this Indenture to the end of the most recent
fiscal quarter ending before the date of such Restricted
Payment for which consolidated financial statements of the
Company are available, or, if such Consolidated Net Income is
a deficit, then minus 100% of such deficit;
(B) 100% of the aggregate Net Cash Proceeds received
by the Company since the date of this Indenture as a
contribution to its common equity capital or from the
54
issue or sale of Capital Stock of the Company (other than
Disqualified Stock) or from the issue or sale of convertible
or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been
converted into or exchanged for such Capital Stock (other than
Capital Stock (or Disqualified Stock or debt securities) sold
to a Restricted Subsidiary of the Company), less the amount of
any such Net Cash Proceeds that are utilized for an Investment
pursuant to clause (13) of the definition of "Permitted
Investments;"
(C) in the case of the disposition or repayment of
any Investment constituting a Restricted Investment, without
duplication of any amount deducted in calculating the amount
of Investments at any time outstanding included in the amount
of Restricted Payments, an amount equal to the lesser of the
return of capital or similar repayment with respect to such
Investment, or the initial amount of such Investment, in
either case, less the cost of the disposition of such
Investment;
(D) to the extent that any Unrestricted Subsidiary of
the Company designated as such after the date of this
Indenture is redesignated as a Restricted Subsidiary after the
date of this Indenture, the lesser of (i) the fair market
value of the Company's Investment in such Subsidiary as of the
date of such redesignation or (ii) such fair market value as
of the date on which such Subsidiary was originally designated
as an Unrestricted Subsidiary after the date of this
Indenture; and
(E) 50% of any dividends received by the Company or a
Guarantor after the date of this Indenture from an
Unrestricted Subsidiary of the Company, to the extent that
such dividends were not otherwise included in the Consolidated
Net Income of the Company for such period.
(b) The provisions of Section 4.07(a) hereof will not prohibit the
following actions:
(1) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Capital Stock of the Company or
Subordinated Obligations made by exchange, including any such exchange
pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of
fractional shares, 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 or an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries; provided that
the Net Cash Proceeds or reduction of Indebtedness from such sale or
exchange will be excluded in subsequent calculations of the amount of
Restricted Payments;
(2) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent
sale of, Subordinated Obligations of the Company that is permitted to
be Incurred under the provisions of Section 4.09 hereof;
(3) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Subordinated Obligations from Net
Available Cash to the extent permitted by the provisions of Section
4.10 hereof;
(4) payment of dividends within 60 days after the date of
declaration of such dividends, if at the date of declaration such
dividend would have complied with Section 4.07(a) hereof;
55
(5) any purchase or redemption of any shares of Capital Stock
of the Company from employees or former employees of the Company and
its Restricted Subsidiaries pursuant to the repurchase provisions under
employee stock option or stock purchase agreements or other agreements
to compensate management or in connection with the termination of
employment in an aggregate amount after the date of this Indenture not
in excess of $5 million in any fiscal year, plus any unused amounts
under this clause from prior fiscal years;
(6) the payment of any dividend by a Restricted Subsidiary to
the holders of all of its common equity interests on a pro rata basis;
(7) any payments to the Permitted Holder made in connection
with, and substantially concurrent with the closing of, the Acquisition
by the Company and its Restricted Subsidiaries;
(8) any Permitted Payments to Parent;
(9) Restricted Payments not to exceed $50 million in the
aggregate since the date of this Indenture; provided that no more than
$25 million of such Restricted Payments are made in any calendar year;
provided further that, after giving pro forma effect to any such
Restricted Payment, the Company would have had a Leverage Ratio of less
than 2.5 to 1.00; and
(10) Restricted Payments not to exceed $35 million in the
aggregate since the date of this Indenture.
The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined by the Board of Directors whose
resolution with respect thereto will be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment-banking firm of national standing if the
fair market value exceeds $20 million.
Section 4.08 Limitation on Restrictions on Distributions from Restricted
Subsidiaries.
(a) Neither the Company nor any Restricted Subsidiary will create or
otherwise cause or permit to exist any consensual restriction on the ability of
any Restricted Subsidiary to take the following actions:
(1) pay dividends or make any other distributions on its
Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any of its Restricted Subsidiaries;
(2) make any loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) transfer any of its property or assets to the Company or
any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof will not apply to
encumbrances or restrictions existing or by reason of:
(1) the Senior Credit Facility and any agreements governing
Indebtedness existing on the date of this Indenture, in each case, as
in effect on the date of this Indenture and any amendments,
56
restatements, modifications, renewals, supplements, refundings,
replacements or refinancings of those agreements; provided that the
amendments, restatements, modifications, renewals, supplements,
refundings, replacements or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the
date of this Indenture;
(2) this Indenture, the Notes and the Note Guarantees;
(3) any restriction with respect to a Restricted Subsidiary
that is either:
(A) pursuant to an agreement relating to any
Indebtedness (i) Incurred by a Restricted Subsidiary before
the date on which such Restricted Subsidiary was acquired by
the Company, or (ii) of another Person that is assumed by the
Company or a Restricted Subsidiary in connection with the
acquisition of assets from, or merger or consolidation with,
such Person and is outstanding on the date of such
acquisition, merger or consolidation; provided that any
restriction with respect to a Restricted Subsidiary pursuant
to an agreement relating to Indebtedness Incurred either as
consideration in, or for the provision of any portion of the
funds or credit support used 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 such acquisition of assets, merger
or consolidation shall not be permitted pursuant to this
clause (A); or
(B) pursuant to any agreement, not relating to any
Indebtedness, existing when a Person becomes a Subsidiary of
the Company or acquired by the Company or any of its
Subsidiaries, that, in each case, is not created in
contemplation of such Person becoming such a Subsidiary or
such acquisition (it being understood for purposes of this
clause (B) that if another Person is the Successor Company,
any Subsidiary or agreement thereof shall be deemed acquired
or assumed by the Company when such Person becomes the
Successor Company),
and, in the case of clauses (A) and (B), which restriction is
not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the properties or assets
of the Person, so acquired;
(4) any restriction with respect to a Restricted Subsidiary
pursuant to an agreement (a "Refinancing Agreement") that effects a
refinancing, extension, renewal or replacement of Indebtedness under an
agreement referred to in this Section 4.08 (an "Initial Agreement") or
contained in any amendment to an Initial Agreement; provided that the
restrictions contained in any such Refinancing Agreement or amendment
are not materially more restrictive, taken as a whole, than the
restrictions contained in the Initial Agreement or Agreements to which
such Refinancing Agreement or amendment relates;
(5) any restriction that is a customary restriction on
subletting, assignment or transfer of any property or asset that is
subject to a lease, license or similar contract, or on the assignment
or transfer of any lease, license or other contract;
(6) any restriction by virtue of a transfer, agreement to
transfer, option, right, or Lien with respect to any property or assets
of the Company or any Restricted Subsidiary not otherwise prohibited by
this Indenture;
57
(7) any restriction contained in mortgages, pledges or other
agreements securing Indebtedness of the Company or a Restricted
Subsidiary to the extent such restriction restricts the transfer of the
property subject to such mortgages, pledges or other security
agreements;
(8) any restriction with respect to a Restricted Subsidiary,
or any of its property or assets, imposed pursuant to an agreement for
the sale or disposition of all or substantially all the Capital Stock
or assets of such Restricted Subsidiary, or the property or assets that
are subject to such restriction, pending the closing of such sale or
disposition;
(9) any restriction existing by reason of applicable law,
rule, regulation or order;
(10) provisions limiting the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
sale-leaseback agreements, stock sale agreements and other similar
agreements entered into with the approval of the Company's Board of
Directors, which limitation is applicable only to the assets that are
the subject of such agreements;
(11) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business;
(12) restrictions existing under Indebtedness or other
contractual requirements of a Receivables Subsidiary in connection with
a Qualified Receivables Transaction; provided that such restrictions
apply only to such Receivables Subsidiary; or
(13) restrictions contained in Indebtedness incurred by a
Foreign Subsidiary pursuant to clause (10) of Section 4.09(b) hereof;
provided that such restrictions relate only to one or more Foreign
Subsidiaries.
Section 4.09 Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur any Indebtedness; provided, however, that the Company and
any Restricted Subsidiary of the Company that is a Guarantor may incur
Indebtedness if, on the date of the Incurrence of such Indebtedness, the
Consolidated Coverage Ratio would be greater than 2.0 to 1.0.
(b) The provisions of Section 4.09(a) hereof will not prohibit the
Incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(1) the Incurrence by the Company and any Guarantor of
additional Indebtedness and letters of credit under one or more Senior
Credit Facilities in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of credit being deemed
to have a principal amount equal to the maximum potential liability of
the Company and its Subsidiaries thereunder) not to exceed the greater
of (a) $400 million less the aggregate amount of all Net Cash Proceeds
of Asset Dispositions applied by the Company or any of its Restricted
Subsidiaries since the date of this Indenture to permanently repay any
term Indebtedness under a Senior Credit Facility or to permanently
repay any revolving credit Indebtedness under a Senior Credit Facility
and effect a corresponding commitment reduction thereunder pursuant to
the provisions of Section 4.10 hereof and (b) the amount of the
Borrowing Base as of the date of such Incurrence, in each case less the
aggregate amount of all commitment reductions with respect to any
revolving credit borrowings under a Senior Credit Facility that have
been made by the Company or any of its Restricted Subsidiaries
resulting from or relating to the formation of any Receivables
Subsidiary or the consummation of any Qualified Receivables
Transaction;
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(2) the Guarantee by the Company or any Guarantor of
Indebtedness of the Company or a Restricted Subsidiary that was
permitted to be Incurred by another provision of this Section 4.09;
(3) the Incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on
such Indebtedness, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all
obligations with respect to the Notes, in the case of the
Company, or the applicable Note Guarantee, in the case of a
Guarantor; and
(B) (i) any subsequent issuance or transfer of
Capital Stock that results in any such Indebtedness being held
by a Person other than the Company or a Restricted Subsidiary
and (ii) any sale or other transfer of any such Indebtedness
to a Person that is not either the Company or a Restricted
Subsidiary, will be deemed, in each case, to constitute an
Incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not
permitted by this clause;
(4) the Incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Note Guarantees
to be issued on the date of this Indenture and the Exchange Notes and
the related Note Guarantees to be issued pursuant to the Registration
Rights Agreement;
(5) the Incurrence by the Company and any Restricted
Subsidiary of Indebtedness existing on the date of this Indenture
(other than the Mellon Letters of Credit);
(6) the Incurrence by the Company or any of its Restricted
Subsidiaries of Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by this
Indenture to be Incurred under Section 4.09(a) hereof or clauses (2),
(4), (5), (6), (7) or (14) of this Section 4.09(b);
(7) the Incurrence by the Company or any Restricted Subsidiary
of Indebtedness represented by Capitalized Lease Obligations, mortgage
financings or purchase money obligations, in each case, Incurred for
the purpose of financing all or any part of the purchase price or cost
of design, construction or improvement of property, plant or equipment
used in the business of the Company or a Restricted Subsidiary, in an
aggregate principal amount, including all Refinancing Indebtedness
Incurred to refund, refinance or replace any Indebtedness Incurred
pursuant to this clause (7), not to exceed 2.5% of Consolidated
Tangible Assets at any time outstanding measured at the time of
Incurrence;
(8) the Incurrence by the Company or any Restricted Subsidiary
of Hedging Obligations that are Incurred in the ordinary course of
business and not for speculative purposes;
(9) the Incurrence by the Company or any Restricted Subsidiary
of Indebtedness evidenced by letters of credit issued in the ordinary
course of business of the Company to secure workers' compensation and
other insurance coverage;
(10) the Incurrence by the Foreign Subsidiaries of
Indebtedness if, at the time of Incurrence of such Indebtedness, and
after giving effect thereto, the aggregate principal amount
59
of all Indebtedness of the Foreign Subsidiaries Incurred pursuant to
this clause (10) and then outstanding does not exceed the greater of
(A) $30 million and (B) an amount equal to 50% of the consolidated book
value of the inventories of the Foreign Subsidiaries measured at the
time of Incurrence;
(11) the incurrence by a Receivables Subsidiary of
Indebtedness in a Qualified Receivables Transaction that is without
recourse to the Company or to any other Restricted Subsidiary of the
Company or their assets (other than such Receivables Subsidiary and its
assets and, as to the Company or any Restricted Subsidiary of the
Company, other than pursuant to representations, warranties, covenants
and indemnities customary for such transactions) and is not Guaranteed
by any such Person;
(12) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in respect of workers' compensation
claims, self-insurance obligations, letters of credit (not supporting
Indebtedness for borrowed money), bankers' acceptances, performance and
surety bonds in the ordinary course of business;
(13) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, contribution,
adjustment of purchase price, earn out or similar obligations, in each
case, incurred or assumed in connection with the disposition of any
business or assets of the Company or any Restricted Subsidiary or
Capital Stock of a Restricted Subsidiary; provided that the maximum
aggregate liability in respect of all such Indebtedness Incurred
pursuant to this clause (13) shall at no time exceed the gross proceeds
actually received by the Company and its Restricted Subsidiaries in
connection with such dispositions; and
(14) the Incurrence by the Company or any Restricted
Subsidiary of Indebtedness, which may include Bank Indebtedness, in an
aggregate principal amount not to exceed $35 million outstanding at any
one time.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (14) above,
or is entitled to be Incurred pursuant to Section 4.09(a) hereof, the Company
will be permitted to classify such item of Indebtedness on the date of its
Incurrence, or later reclassify, all or a portion of such item of Indebtedness,
in any manner that complies with this Section 4.09. Indebtedness outstanding
under Senior Credit Facilities and under the Mellon Letters of Credit on the
date on which Notes are first issued and authenticated under this Indenture will
initially be deemed to have been Incurred in reliance on the exception provided
by Section 4.09(b)(1). In addition, for purposes of determining compliance with
this Section 4.09, the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms will not be deemed to be an
Incurrence of Indebtedness for purposes of this Section 4.09; provided that the
amount thereof shall be included in Consolidated Interest Expense of the Company
as accrued.
The Company will not permit any Unrestricted Subsidiary to Incur any
Indebtedness other than Non-Recourse Debt. However, if any such Indebtedness
ceases to be Non-Recourse Debt, then such event shall constitute an Incurrence
of Indebtedness by the Company or a Restricted Subsidiary.
Section 4.10 Limitation on Asset Dispositions.
(a) Neither the Company nor any Restricted Subsidiary shall make any
Asset Disposition unless:
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(1) the Company or such Restricted Subsidiary receives
consideration, including relief from, or the assumption of another
Person 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. The Board of
Directors shall determine the fair market value, and their
determination shall be conclusive, including as to the value of all
non-cash consideration;
(2) at least 75% of the consideration for any Asset
Disposition received by the Company or such Restricted Subsidiary is in
the form of cash. For the purposes of this provision, the following are
deemed to be cash:
(A) Cash Equivalents;
(B) 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;
(C) Indebtedness of any Restricted Subsidiary that is
no longer a Restricted Subsidiary as a result of such Asset
Disposition, to the extent that the Company and each other
Restricted Subsidiary is released from any Guarantee, or is
the beneficiary of any indemnity with respect to such
Indebtedness which is secured by any letter of credit or Cash
Equivalents, of such Indebtedness in connection with such
Asset Disposition;
(D) securities received by the Company or any
Restricted Subsidiary from the transferee that are converted
by the Company or such Restricted Subsidiary into cash within
60 days after the Asset Disposition;
(E) an amount equal to the fair market value of
Indebtedness of the Company or any Restricted Subsidiary
received by the Company or a Restricted Subsidiary as
consideration for any Asset Disposition, determined at the
time of receipt of such Indebtedness by the Company or such
Restricted Subsidiary; and
(F) consideration consisting of Additional Assets;
(3) the Company or such Restricted Subsidiary applies an
amount equal to 100% of the Net Available Cash from such Asset
Disposition in the following manner:
(A) to the extent the Company elects, or is required
by the terms of any Senior Indebtedness or Indebtedness, other
than Preferred Stock, to prepay, repay or purchase Senior
Indebtedness or such Indebtedness, in each case other than the
Indebtedness owed to the Company or a Restricted Subsidiary,
within 365 days after the date of such Asset Disposition;
(B) to the extent of the balance of Net Available
Cash, 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, or, if such reinvestment in
Additional Assets is a project that is authorized by the Board
of Directors within such 365-day period, within 455 days from
the date of such Asset Disposition;
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(C) to the extent of the balance of such Net
Available Cash remaining after application pursuant to clauses
(A) or (B) above (the "Excess Proceeds"), to make an offer to
purchase Notes in accordance with Section 3.09 hereof at a
price in cash equal to 100% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if
any, to the Purchase Date, and, to the extent required by the
terms thereof, any other Senior Subordinated Indebtedness
subject to the agreements governing such other Indebtedness at
a purchase price of 100% of the principal amount thereof plus
accrued and unpaid interest to the Purchase Date and
liquidated damages, if any; and
(D) to the extent of the balance of such Excess
Proceeds after application pursuant to clauses (A), (B) or (C)
of this Section 4.10(3) for any purpose not prohibited by this
Indenture.
However, in connection with any prepayments, repayment or purchase of
revolving credit Indebtedness pursuant to clauses (A) and (C) of this Section
4.10(3), the Company or such Restricted Subsidiary will cause the related loan
commitment, if any, to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased.
Pending the final application of any Net Available Cash, the Company
may temporarily reduce revolving credit borrowings or otherwise invest the Net
Available Cash in any manner that is not prohibited by this Indenture.
(b) Notwithstanding the other provisions of this Section 4.10, the
Company and the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this Section 4.10, except to the extent that
the aggregate Net Available Cash from all Asset Dispositions that is not applied
in accordance with this Section 4.10 exceeds $15 million.
(c) To the extent that the aggregate principal amount of the Notes and
other Senior Subordinated Indebtedness tendered pursuant to an Asset Disposition
Offer made in accordance with this Section 4.10 and Section 3.09 hereof exceeds
the amount of Excess Proceeds, the Trustee will select the Notes and Senior
Subordinated Indebtedness to be purchased on a pro rata basis, based on the
aggregate principal amount thereof surrendered in such Asset Disposition Offer;
provided that when such Asset Disposition Offer is complete, the amount of
Excess Proceeds shall be reset to zero.
(d) The Company will comply with the requirements of Section 14(e) of
the Exchange Act and any other securities laws or regulations in connection with
the repurchase of Notes pursuant to this Section 4.10 and Section 3.09 hereof,
in each case, to the extent applicable. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.10 or
Section 3.09 hereof, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
this Section 4.10 or Section 3.09 hereof as a result of such compliance.
Section 4.11 Limitation on Transactions with Affiliates.
(a) Neither the Company nor any of its Restricted Subsidiaries will
engage in any transaction or series of transactions, including the purchase,
sale, lease or exchange of any property or the rendering of any service with any
Affiliate of the Company (an "Affiliate Transaction") on terms that:
(1) taken as a whole are less favorable to the Company or such
Restricted Subsidiary than the terms that could be obtained at the time
of such transaction in arm's-length dealings with a nonaffiliate; and
62
(2) in the event such Affiliate Transaction involves an
aggregate amount in excess of $15 million, is not in writing and has
not been approved by a majority of the members of the Board of
Directors having no material personal financial interest in such
Affiliate Transaction. If there are no such Board members, then the
Company must obtain a Fairness Opinion. A "Fairness Opinion" means an
opinion from an independent investment banking firm, accounting firm or
appraiser of national standing which indicates that the terms of such
transaction are fair to the Company or such Restricted Subsidiary from
a financial point of view.
In addition, any transaction involving aggregate payments or other
transfers by the Company and its Restricted Subsidiaries in excess of $30
million will also require a Fairness Opinion.
(b) The provisions of Section 4.11(a) hereof shall not prohibit the
following actions:
(1) any Restricted Payment permitted by the provisions of
Section 4.07 hereof or any Permitted Investment;
(2) the performance of the obligations of the Company or a
Restricted Subsidiary under any employment contract, collective
bargaining agreement, service agreement, employee benefit plan, related
trust agreement, severance agreement or any other similar arrangement
entered into in the ordinary course of business;
(3) payment of compensation, performance of indemnification or
contribution obligations in the ordinary course of business;
(4) any issuance, grant or award of stock, options or other
securities, to employees, officers or directors;
(5) any transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries or any transaction
between a Receivables Subsidiary and any Person in which the
Receivables Subsidiary has an Investment;
(6) any other transaction arising out of agreements existing
on the date of this Indenture and described in the "Certain
Relationships and Related Party Transactions" section of the Offering
Memorandum;
(7) transactions with suppliers or other purchasers or sellers
of goods or services, in each case in the ordinary course of business
and on terms no less favorable to the Company or the Restricted
Subsidiary than those that could be obtained at such time in
arm's-length dealings with a nonaffiliate;
(8) the payment of rent due under the Master Lease, dated as
of March 23, 1999, between Gustine Sixth Avenue Associates, Ltd. and
General Nutrition, Incorporated, as in effect on the date of this
Indenture or as amended in compliance with the provisions of this
Section 4.11; and
(9) so long as no Default has occurred and is continuing, (a)
payment of annual management fees to the Permitted Holder in an
aggregate amount not to exceed, during any consecutive 12-month period,
$1.5 million, (b) the payment of fees to the Permitted Holder for
financial advisory and investment banking services rendered to the
Company and its Restricted Subsidiaries in connection with
acquisitions, securities offerings and other financings and similar
significant corporate transactions in customary and reasonable amounts
for such transactions, and (c) reimbursement of reasonable
out-of-pocket expenses incurred by the Permitted Holder in
63
connection with the services described in clauses (a) and (b) above;
provided that the foregoing payments and reimbursements are
subordinated to the Notes to the same extent as the Notes are
subordinated to Designated Senior Indebtedness; provided further that
if any such Default prevents the payment of any such fees, the Company
may pay such deferred fees at the time such Default is cured or waived.
Section 4.12 Limitation on Liens.
Neither the Company nor any Restricted Subsidiary will create or permit
to exist any Lien, other than Permitted Liens, on any of its property or assets,
including Capital Stock, whether owned on the date of this Indenture or
thereafter acquired, securing any Indebtedness that is not Senior Indebtedness
(the "Initial Lien"), unless at the same time effective provision is made to
secure the obligations due under this Indenture and the Notes equally and
ratably with such obligation for so long as such obligation is secured by such
Initial Lien.
Any such Lien created in favor of the Notes will be automatically and
unconditionally released and discharged upon:
(1) the release and discharge of the Initial Lien to which it
relates; or
(2) any sale, exchange or transfer to a non-affiliate of the
Company of the property or assets secured by such Initial Lien, or of
all of the Capital Stock held by the Company or any Restricted
Subsidiary, or all or substantially all of the assets of any Restricted
Subsidiary creating such Lien.
Section 4.13 Limitation on the Sale or Issuance of Preferred Stock of Restricted
Subsidiaries.
The Company will not sell any shares of Preferred Stock of a Restricted
Subsidiary, and will not permit any Restricted Subsidiary to issue or sell any
shares of its Preferred Stock to any Person, other than to the Company or a
Restricted Subsidiary.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or
other existence of each of its Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
64
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple of $1,000) of that Holder's Notes, pursuant to an offer
that the Company will make to all Holders (a "Change of Control Offer") at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes
repurchased to the date of purchase, subject to the rights of Holders on the
relevant record date to receive interest due on the relevant interest payment
date the ("Change of Control Payment"). Unless the Company has exercised its
right to redeem all of the Notes pursuant to Section 3.07 hereof, the Company
will, within thirty days following any Change of Control, or at the Company's
option, prior to such Change of Control but after the public announcement
thereof, mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred or will occur and
that such Holder has, or upon such occurrence will have, the right to
require the Company to purchase such Holder's Notes at a purchase price
in cash equal to 101% of the principal amount thereof, plus accrued and
unpaid interest to the date of purchase, and Liquidated Damages, if
any, subject to the right of Holders of Notes 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 date of purchase, which will be no earlier than 30
days nor later than 90 days from the date such notice is mailed (the
"Change of Control Payment Date");
(4) the instructions determined by the Company, consistent
with this Section 4.15, that a Holder must follow in order to have its
Notes purchased; and
(5) that, if such offer is made prior to such Change of
Control, payment is conditioned on the occurrence of such Change of
Control.
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 Notes pursuant to this
Section 4.15. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.15, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.15 as a result of
such compliance.
Prior to repurchasing any Notes pursuant to this Section 4.15, but in
any event within 90 days following a Change of Control, the Company will either
repay all outstanding Senior Indebtedness and Guarantor Senior Indebtedness or
obtain the requisite consents, if any, under all agreements governing such
outstanding Senior Indebtedness and Guarantor Senior Indebtedness to permit the
repurchase of Notes required by this Section 4.15.
(b) On or before the Change of Control Payment Date, the Company will,
to the extent lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered and not withdrawn pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered and not withdrawn; and
65
(3) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officer's Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered and not withdrawn the Change of Control Payment for such Notes, and the
Trustee will promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any. The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and purchases all Notes properly tendered
and not withdrawn under the Change of Control Offer, or (2) notice of redemption
has been given pursuant to Section 3.07 hereof, unless and until there is a
default in payment of the applicable redemption price.
Section 4.16 Limitation on Layering.
The Company will not Incur any Indebtedness that is contractually
subordinate in right of payment to any Senior Indebtedness, unless such
Indebtedness is Senior Subordinated Indebtedness or is subordinated in right of
payment to Senior Subordinated Indebtedness by contract. In addition, no
Guarantor will Incur any Indebtedness that is contractually subordinate in right
of payment to any Guarantor Senior Indebtedness, unless such Indebtedness is
Guarantor Senior Subordinated Indebtedness of such Guarantor, or is subordinated
in right of payment to Guarantor Senior Subordinated Indebtedness by contract.
Unsecured Indebtedness is not considered subordinate to Secured Indebtedness
merely because it is unsecured, and Indebtedness that is not Guaranteed by a
particular person is not deemed to be subordinate to Indebtedness that is so
guaranteed, merely because it is not Guaranteed. No Indebtedness will be
considered to be senior by virtue of being secured on a first or junior priority
basis.
Section 4.17 Additional Note Guarantees.
If the Company or any of its Restricted Subsidiaries acquires or
creates another Domestic Subsidiary after the date of this Indenture, then the
Company will cause that newly acquired or created Domestic Subsidiary to execute
a Note Guarantee pursuant to a supplemental indenture in form and substance
satisfactory to the Trustee and deliver an Opinion of Counsel to the Trustee
within 10 Business Days of the date on which it was acquired or created to the
effect that such supplemental indenture has been duly authorized, executed and
delivered by that Domestic Subsidiary and constitutes a valid and binding
agreement of that Domestic Subsidiary, enforceable against that Domestic
Subsidiary in accordance with its terms (subject to customary exceptions);
provided that any Domestic Subsidiary that constitutes an Immaterial Subsidiary
need not become a Guarantor until such time as it ceases to be an Immaterial
Subsidiary.
In addition, if any of General Nutrition Companies, Inc., GNC Newco 1
LLC, GNC Newco 2 LLC, GNC Newco DGP 1 and GNC Newco DGP 2 (each, a "Reorganized
Subsidiary") are not merged with and into the Company on the date of this
Indenture, then the Company will cause that Reorganized Subsidiary to execute a
Note Guarantee pursuant to a supplemental indenture in form and substance
satisfactory to the Trustee and deliver an Opinion of Counsel to the Trustee on
the date of this Indenture to the effect that such supplemental indenture has
been duly authorized, executed and delivered by that Reorganized Subsidiary and
constitutes a valid and binding agreement of that Reorganized Subsidiary,
66
enforceable against that Reorganized Subsidiary in accordance with its terms
(subject to customary exceptions).
The form of such Note Guarantee is attached as Exhibit E hereto.
Section 4.18 Designation of Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default; provided that in no event will a Subsidiary of the Company that owns
or holds the right to use, license or sublicense the "GNC" brand be designated
as an Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an
Unrestricted Subsidiary, the aggregate fair market value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary designated as Unrestricted will be deemed to be an Investment made as
of the time of the designation and will reduce the amount available for
Restricted Payments under the provisions of Section 4.07 hereof or under one or
more clauses of the definition of Permitted Investments, as determined by the
Company. That designation will only be permitted if the Investment would be
permitted at that time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors of the Company
may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if
that redesignation would not cause a Default.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of a resolution of the Board of Directors giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the preceding conditions and was permitted by the provisions of
Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to
meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary will be deemed to be Incurred by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness
is not permitted to be Incurred as of such date under the provisions of Section
4.09 hereof, the Company will be in default of such Section 4.09 hereof. The
Board of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary of the Company; provided that such
designation will be deemed to be an Incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary, and such designation will only be permitted if (1) such Indebtedness
is permitted under the provisions of Section 4.09 hereof, calculated on a pro
forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; and (2) no Default or Event of Default would be
in existence following such designation.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
(a) The Company shall not, in a single transaction or a series of
related transactions, consolidate with or merge with or into, or convey or
transfer all or substantially all its assets to, any Person, unless:
(1) 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;
(2) the Successor Company, if not the Company, will expressly
assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee,
67
all the obligations of the Company under the Notes, this Indenture and
the Registration Rights Agreement;
(3) immediately after giving effect to such transaction or
series of transactions no Default or Event of Default exists;
(4) the Company or the Successor Company, if the Company is
not the continuing obligor under this Indenture, will, at the time of
such transaction or series of transactions and after giving pro forma
effect thereto as if such transaction or series of transactions had
occurred at the beginning of the applicable four-quarter period, be
permitted to Incur at least an additional $1.00 of Indebtedness under
paragraph (a) of Section 4.09 hereof, and
(5) the Company will have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each to the effect
that such consolidation, merger or transfer and such supplemental
indenture, if any, comply with this Indenture; provided that:
(A) in giving such opinion such counsel may rely on
such Officer's Certificate as to any matters of fact,
including without limitation as to compliance with the
foregoing clauses; and
(B) no Opinion of Counsel will be required for a
consolidation, merger or transfer described in Section 5.01(c)
hereof.
In addition, the Company will not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person.
(b) The Successor Company will be substituted for, and may exercise
every right and power of, the Company under this Indenture. Thereafter, the
Company (if it is not the Successor Company) will be relieved of all obligations
and covenants under this Indenture, except that, in the case of a conveyance or
transfer of less than all its assets, the Company will not be released from the
obligation to pay the principal of and interest on the Notes.
(c) The provisions of this Section 5.01 do not prohibit any Restricted
Subsidiary from consolidating with, merging into or transferring all or part of
its properties and assets to the Company. Additionally, the Company may merge
with an Affiliate incorporated or organized for the purpose of reincorporating
or reorganizing the Company in another jurisdiction to realize tax or other
benefits. The definition of "Successor Company" will not include companies
formed by consolidations, mergers or transfers of properties or assets pursuant
to this Section 5.01(c).
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
(a) Each of the following is an "Event of Default":
(1) a default in any payment of interest on, or Liquidated
Damages, if any, with respect to, any Note when due, whether or not
such payment is prohibited by Article 10 hereof, continued for 30 days;
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(2) a default in the payment of principal of, or premium, if
any, on any Note when due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise,
whether or not such payment is prohibited by Article 10 of this
Indenture;
(3) the failure by the Company or any of its Restricted
Subsidiaries to comply with its obligations under Article 5 hereof;
(4) the failure by the Company or any of its Restricted
Subsidiaries to comply for 30 days after written notice from the
Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes with any of its obligations under Sections 4.07,
4.09, 4.10, 4.15, in each case, other than a failure to purchase Notes;
(5) the failure by the Company or any of its Restricted
Subsidiaries to comply with its other agreements contained in the Notes
or this Indenture for 60 days after written notice from the Trustee or
the Holders of at least 25% in principal amount of the outstanding
Notes;
(6) the failure by the Company or any Significant Subsidiary
to pay any Indebtedness within any applicable grace period after final
maturity or the acceleration of any such Indebtedness by the holders
thereof because of a default if the total amount of such Indebtedness
unpaid or accelerated exceeds $20 million;
(7) the Company or any of its Significant Subsidiaries:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a custodian of it
or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries;
(B) appoints a custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of
the property of the Company or any of its Significant
Subsidiaries; or
(C) orders the liquidation of the Company or any of
its Significant Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
(9) the rendering of any judgment or decree for the payment of
money in an amount, net of any insurance or indemnity payments actually
received in respect thereof prior to or within 90 days from the entry
thereof, or to be received in respect thereof in the event any appeal
thereof shall be unsuccessful, in excess of $20 million against the
Company or a Significant Subsidiary
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that is not discharged, bonded or insured by a third Person if either
an enforcement proceeding thereon is commenced, or such judgment or
decree remains outstanding for a period of 90 days and is not
discharged, waived or stayed; or
(10) the failure of any Guarantee of the Notes by a Guarantor
that is a Significant Subsidiary to be in full force, except as
contemplated by the terms thereof or of this Indenture, or the denial
in writing by any such Guarantor of its obligations under this
Indenture or any such Guarantee if such Default continues for 10 days.
(b) The events listed in Section 6.01(a) hereof will constitute Events
of Default regardless of their reasons, whether voluntary or involuntary or
whether effected by operation of law or pursuant to any judgment, decree, order,
rule or regulation of any administrative or governmental body.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (7) or (8) of
Section 6.01(a) hereof, with respect to the Company or any of its Significant
Subsidiaries, all outstanding Notes will become due and payable immediately
without further action or notice on the part of the Trustee or any Holder. If
any other Event of Default occurs and is continuing, the Trustee, by notice to
the Company, or the Holders of at least a majority in aggregate principal amount
of the then outstanding Notes, by notice to the Company and the Trustee, may
declare the principal of and accrued but unpaid interest on all of the Notes to
be due and payable immediately (and upon any such declaration, the Notes shall
become due and payable immediately); provided that so long as any Designated
Senior Indebtedness is outstanding, such acceleration will not be effective
until the earlier of (1) the acceleration of such Designated Senior Indebtedness
and (2) five Business Days after the holders of such Designated Senior
Indebtedness or the Representative thereof receive notice from the Company of
the acceleration with respect to the payment of the Notes.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may, on behalf of all of the
Holders, rescind an acceleration and its consequences, if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium or Liquidated Damages, if
any, that has become due solely because of the acceleration) have been cured or
waived.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
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payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration, if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, interest or premium
or Liquidated Damages, if any, that has become due solely because of the
acceleration) have been cured or waived. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05 Control by Majority.
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that (a) conflicts with law or this Indenture, (b) the Trustee
determines is unduly prejudicial to the rights of any other Holder of Notes or
(c) that would involve the Trustee in personal liability.
Section 6.06 Limitation on Suits.
Except to enforce the right to receive payment of principal, premium
and Liquidated Damages, if any, or interests when due, no Holder may pursue a
remedy with respect to this Indenture or the Notes unless:
(1) such Holder has previously given to the Trustee written
notice that an Event of Default is continuing;
(2) Holders of at least 25% in aggregate principal amount of
the then outstanding Notes have requested to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to
the Trustee reasonable security or indemnity against any loss,
liability or expense;
(4) the Trustee has not complied with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) during such 60-day period, Holders of a majority in
aggregate principal amount of the then outstanding Notes have not given
the Trustee a direction inconsistent with such request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the provisions
of this Indenture relating to the right of any Holder of a Note to receive
payment of principal, premium and Liquidated Damages, if any, and interest on
the Note, on or after the respective due dates expressed in the Note (including
in connection with an offer to purchase) may not be changed, and the right of
any Holder, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired, in each case, without the consent
of such Holder.
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Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a)(1) or (2) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on, the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expenses and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to the Holders of Senior Indebtedness if and to the
extent required by Article 10 hereof;
Third: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any and interest, respectively; and
Fourth: to the Company or to such party as a court of
competent jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Company, a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit
by Holders of more than 10% in aggregate principal amount of the then
outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
will exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee will examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
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(e) No provision of this Indenture will require the Trustee to expend
or risk its own funds or incur any liability. In case an Event of Default occurs
and is continuing, the Trustee will be under no obligation to exercise any of
its rights and powers under this Indenture at the request of any Holders, unless
such Holder has offered to the Trustee reasonable security and indemnity against
any loss, liability or expense. Before taking any action under this Indenture,
the Trustee will be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
(a) In connection with the Trustee's rights and duties under this
Indenture, the Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officer's Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and will not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) Except with respect to Section 4.01 hereof, the Trustee shall have
no duty to inquire as to the performance of the Company's covenants in Article
Four hereof. In addition, 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 Sections 6.01(a)(1), 6.01(a)(2) and 4.01 hereof or (ii) any Default
or Event of Default of which the Trustee shall have received written
notification in the manner set forth in this Indenture or an Officer in the
Corporate Trust Office of the Trustee shall have obtained actual knowledge.
Delivery of reports, information and documents to the Trustee under Section 4.03
hereof is for informational purposes only and the Trustee's receipt of the
foregoing shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on an Officer's Certificate).
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it
74
must eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee (if this Indenture has been qualified under the TIA) or
resign. Any Agent may do the same with like rights and duties.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium or
Liquidated Damages, if any, or interest on, any Note, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA Section 313(b)(2). The Trustee will also transmit by mail
all reports as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA Section 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company and the Guarantors will indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors, any
Holder or any other Person) or liability in
75
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee will notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company will not relieve the Company or any of the Guarantors of
their obligations hereunder. The Company or such Guarantor will defend the claim
and the Trustee will cooperate in the defense. The Trustee may have separate
counsel and the Company will pay the reasonable fees and expenses of such
counsel. Neither the Company nor any Guarantor need pay for any settlement made
without its consent, which consent will not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's and the Guarantors' payment obligations in
this Section 7.07, the Trustee will have a Lien prior to the Notes on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien will survive the
satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(a)(7) or (8) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of a
majority in aggregate principal amount of the then outstanding Notes may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least 10% in aggregate principal
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amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee; provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may at any time elect to have either Section 8.02 or 8.03
hereof be applied to all outstanding Notes upon compliance with the conditions
set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth
77
in Section 8.04 hereof, be deemed to have been discharged from their obligations
with respect to all outstanding Notes (including the Note Guarantees) and the
Indenture on the date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means that the Company
and the Guarantors will be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes (including the Note
Guarantees), which will thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in clauses (1) and (2) below, and to have satisfied all their other
obligations under such Notes, the Note Guarantees and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
will survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium and
Liquidated Damages, if any, on, such Notes when such payments are due
from the trust referred to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from each of their obligations under the covenants contained in
Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18
hereof and clauses (3) and (4) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes will
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and Note
Guarantees, the Company and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Note Guarantees will be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, Sections 6.01(a)(4) through 6.01(a)(10) hereof
will not constitute Events of Default; provided that clauses (7) and (8) of
Section 6.01(a) hereof will continue to constitute Events of Default with
respect to the Company, but not any Significant Subsidiary.
Section 8.04 Conditions to Legal or Covenant Defeasance.
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In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Obligations, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally
recognized investment bank, appraisal firm, or firm of independent
public accountants, to pay the principal of, premium and Liquidated
Damages, if any, and interest on, the outstanding Notes on the stated
date for payment thereof or on the applicable redemption date, as the
case may be, and the Company must specify whether the Notes are being
defeased to such stated date for payment or to a particular redemption
date;
(2) in the case of an election under Section 8.02 hereof, the
Company must deliver to the Trustee an Opinion of Counsel confirming
that:
(A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has been
a change in the applicable federal income tax law,
in either case to the effect that the Holders of the
outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof, the
Company must deliver to the Trustee an Opinion of Counsel confirming
that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit);
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding any creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
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Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Obligations deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium or
Liquidated Damages, if any, or interest on, any Note and remaining unclaimed for
two years after such principal, premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter be permitted to look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which will not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Obligations in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Notes and the Note Guarantees will be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
Liquidated Damages, if any, or interest on, any Note
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following the reinstatement of its obligations, the Company will be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
or the Note Guarantees without the consent of any Holder of Note:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to provide for the assumption by a successor corporation
of the obligations of the Company under this Indenture;
(3) to provide for uncertificated Notes in addition to or in
place of certificated notes; provided, however, that the uncertificated
Notes are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Notes, to secure the
Notes, to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power conferred upon the Company;
(5) to make any change that does not adversely affect the
rights of any Holder;
(6) to comply with any requirement of the SEC in connection
with the qualification of this Indenture under the TIA;
(7) to conform the text of this Indenture, the Note Guarantees
or the Notes to any provision of the Description of Notes to the extent
that such provision in the Description of Notes was intended to be a
verbatim recitation of a provision of this Indenture, the Note
Guarantees or the Notes; or
(8) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture as of the
date hereof.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee may in its
discretion, but will not be obligated to, enter into such amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
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Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.09, 4.10 and 4.15 hereof) and the Notes and the Note Guarantees with
the consent of the Holders of at least a majority in aggregate principal amount
of the then outstanding Notes (including, without limitation, Additional Notes,
if any) voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium or Liquidated Damages, if any, or interest
on, the Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture or the Notes
or the Note Guarantees may be waived with the consent of the Holders of at least
a majority in aggregate principal amount of the then outstanding Notes
(including, without limitation, Additional Notes, if any) voting as a single
class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes). Section 2.08
hereof shall determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but will not be
obligated to, enter into such amended or supplemental indenture.
It is not necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it is sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver.
However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not (with respect to any Notes
held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of
interest on any Note;
(3) reduce the principal amount of or extend the Stated
Maturity of any Note;
(4) reduce the premium payable upon the redemption or
repurchase of any Note or change the time at which any Note may be
redeemed as described in the provisions of Section 3.07 hereof;
(5) make any Note payable in money other than that stated
in the Note;
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(6) make any change to the subordination provisions of
this Indenture that adversely affects the rights of any Holder;
(7) make any change in the provisions of this Indenture
relating to the rights of Holders of Notes to receive payment of
principal of, and interest, premium or Liquidated Damages on, the Notes
on or after the respective due dates expressed in the Notes or impair
the rights of any Holder of notes to sue for the enforcement of any
payment of principal of, or interest, premium or Liquidated Damages on,
such Holder's Notes on or after the respective due dates;
(8) release any Guarantor from any of its obligations
under its Note Guarantee or this Indenture, except in accordance with
the terms of this Indenture; or
(9) make any change in the preceding amendment and waiver
provisions that require each Holder's consent or in the waiver
provisions.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective (as
determined by the Company and which may be prior to any such amendment,
supplement or waiver becoming operative), a consent to it by a Holder of a Note
is a continuing consent by the Holder of a Note and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder of a Note or subsequent Holder of a Note may revoke the consent
as to its Note (if so provided pursuant to any solicitation of such consent) if
the Trustee receives written notice of revocation before the date the amendment,
supplement or waiver becomes effective (as determined by the Company and which
may be prior to any such amendment, supplement or waiver becoming operative). An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee and if such
amendment or supplement does so adversely affect the rights, duties, liabilities
or immunities of the Trustee, the Trustee may, in its discretion, but shall not
be obligated to sign such amendment or supplement. In executing any amended or
supplemental indenture, the Trustee will be entitled to receive and (subject to
Section 7.01 hereof) will be fully protected in relying upon, in addition
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to the documents required by Section 12.04 hereof, an Officer's Certificate and
an Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
Section 10.01 Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full in cash of all Senior Indebtedness (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Indebtedness.
Section 10.02 Liquidation; Dissolution; Bankruptcy.
Upon any distribution of the assets of the Company to creditors of the
Company in a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, in an assignment for the benefit of creditors or any
marshaling of the Company's assets and liabilities:
(1) holders of Senior Indebtedness will be entitled to receive
payment in full in cash of all Obligations due in respect of such
Senior Indebtedness (including interest after the commencement of any
bankruptcy proceeding at the rate specified in the applicable Senior
Indebtedness) before the Holders of Notes will be entitled to receive
any payment with respect to the Notes (except that Holders of Notes may
receive and retain Permitted Junior Securities and payments made from
any defeasance trust created pursuant to Article 8 hereof); and
(2) until all Obligations with respect to Senior Indebtedness
(as provided in clause (1) above) are paid in full in cash, any payment
or distribution to which Holders would be entitled but for this Article
10 will be made to holders of Senior Indebtedness (except that Holders
of Notes may receive and retain Permitted Junior Securities and
payments made from any defeasance trust created pursuant to Section
8.01 hereof), as their interests may appear.
Section 10.03 Default on Designated Senior Indebtedness.
(a) The Company may not make any payment or distribution to the Trustee
or any Holder in respect of obligations, including Liquidated Damages, if any,
with respect to the Notes, may not purchase, redeem or otherwise retire from the
Trustee or any Holder any Notes for cash or property (other than Permitted
Junior Securities and payments made from any defeasance trust created pursuant
to Section 8.01 hereof) and may not make any deposit pursuant to the provisions
of Article 8 hereof until all principal and other Obligations with respect to
the Senior Indebtedness have been paid in full in cash if:
(1) any Senior Indebtedness is not paid when due in cash; or
(2) any other default on Senior Indebtedness occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with
its terms unless (A) the default has been cured or waived and any such
acceleration has been rescinded in writing or (B) such Senior
Indebtedness has been paid in full in cash.
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(b) If any other default occurs under any Designated Senior
Indebtedness that permits the holders thereof to declare such Indebtedness due
and payable, the Company will not be permitted to pay the notes for a period
(the "Payment Blockage Period") beginning upon the receipt by the Trustee of
written notice (a "Blockage Notice") of such default from the Designated Senior
Indebtedness Representative specifying an election to effect a Payment Blockage
Period. This Payment Blockage Period will end upon the earliest to occur of:
(1) written notice to the Trustee to terminate the period by
the person who gave the Blockage Notice;
(2) the discharge or repayment in full in cash of such
Designated Senior Indebtedness;
(3) the date on which the default giving rise to the Blockage
Notice is no longer continuing; and
(4) the date on which 179 days have passed following the
delivery of the Blockage Notice.
Unless the maturity of the Designated Senior Indebtedness has been
accelerated, the Company will resume payments on the Notes after the end of the
Payment Blockage Period. Only one Blockage Notice may be given in a 360-day
period, regardless of the number of defaults on the Designated Senior
Indebtedness during that period. However, if a Blockage Notice is given by a
holder of Designated Senior Indebtedness other than Bank Indebtedness during the
360-day period, a representative of Bank Indebtedness may give another Blockage
Notice during the 360-day period. In no event, however, may the total number of
days during which any Payment Blockage Period or Periods in the aggregate are in
effect exceed 179 days during any 360 consecutive day period.
Section 10.04 Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of Default,
the Company will promptly notify holders of Senior Indebtedness of the
acceleration. The Company is not permitted to pay the Notes until five Business
Days after such holders or the Representative of the Designated Senior
Indebtedness receive notice of such acceleration. At that time, the Company may
pay the Notes only if the subordination provisions in this Article 10 otherwise
permit payment at that time.
Section 10.05 When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
obligations with respect to the Notes (other than Permitted Junior Securities
and payments made from any defeasance trust created pursuant to Section 8.01
hereof) at a time when the Trustee or such Holder, as applicable, has actual
knowledge that such payment is prohibited by this Article 10, such payment will
be held by the Trustee or such Holder, in trust for the benefit of, and will be
paid forthwith over and delivered, upon written request, promptly to, the
holders of Senior Indebtedness as their interests may appear or their
Representative under the agreement, indenture or other document (if any)
pursuant to which Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Indebtedness remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only those obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied
85
covenants or obligations with respect to the holders of Senior Indebtedness will
be read into this Indenture against the Trustee. The Trustee will not be deemed
to owe any fiduciary duty to the holders of Senior Indebtedness, and will not be
liable to any such holders if the Trustee pays over or distributes to or on
behalf of Holders or the Company or any other Person money or assets to which
any holders of Senior Indebtedness are then entitled by virtue of this Article
10, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
Section 10.06 Notice by Company.
The Company will promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice will not affect the subordination of the Notes to the Senior Indebtedness
as provided in this Article 10.
Section 10.07 Subrogation.
After all Senior Indebtedness is paid in full in cash and until the
Notes are paid in full, Holders of Notes will be subrogated (equally and ratably
with all other Indebtedness pari passu with the Notes) to the rights of holders
of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the Holders
of Notes have been applied to the payment of Senior Indebtedness. A distribution
made under this Article 10 to holders of Senior Indebtedness that otherwise
would have been made to Holders of Notes is not, as between the Company and
Holders, a payment by the Company on the Notes.
Section 10.08 Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Indebtedness. Nothing in this Indenture will:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of, premium and interest and Liquidated Damages, if any, on,
the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Indebtedness; or
(3) prevent the Trustee or any Holder of Notes from exercising
its available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of,
premium or interest or Liquidated Damages, if any, on, a Note on the due date,
the failure is still a Default or Event of Default.
Section 10.09 Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes may be impaired by any
act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
Section 10.10 Distribution or Notice to Representative.
86
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.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes will be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 10.
Section 10.11 Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee will not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee has received at its Corporate
Trust Office at least five Business Days prior to the date of such payment
written notice of facts that would cause the payment of any obligations with
respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 will impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 10.12 Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 10.13 Amendments.
No amendment may be made to the provisions of this Article 10 and any
other subordination provisions in this Indenture that adversely affects the
rights 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.
ARTICLE 11
NOTE GUARANTEES
Section 11.01 Guarantee.
(a) Subject to this Article 11, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
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(1) the principal of, premium and Liquidated Damages, if any,
and interest on, the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any,
if lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder in respect
of the Notes, the Note Guarantee, to the extent theretofore discharged, will be
reinstated in full force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
Section 11.02 Subordination of Note Guarantee.
The obligations of each Guarantor under its Note Guarantee pursuant to
this Article 11 will be junior and subordinated to the Guarantor Senior
Indebtedness of such Guarantor on the same basis as the Notes are junior and
subordinated to Senior Indebtedness of the Company. For the purposes of the
foregoing sentence, the Trustee and the Holders will have the right to receive
and/or retain payments by any of the Guarantors only at such times as they may
receive and/or retain payments in respect of the Notes pursuant to this
Indenture, including Article 10 hereof.
88
Section 11.03 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, including any Guarantees under the
Senior Credit Facility, and after giving effect to any collections from, rights
to receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor under its Note Guarantee
not constituting a fraudulent transfer or conveyance.
Section 11.04 Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 11.01 hereof, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit E hereto will be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture will be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 hereof will remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that the Company or any of its Restricted Subsidiaries
creates or acquires any Domestic Subsidiary after the date of this Indenture, if
required by Section 4.17 hereof, the Company will cause such Domestic Subsidiary
to comply with the provisions of Section 4.17 hereof and this Article 11, to the
extent applicable.
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.05 hereof, no Guarantor may
sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the Company or a Wholly Owned
Subsidiary of the Company that is a Guarantor, unless:
(1) the provisions of this Indenture, including Section 4.10
hereof, are complied with; and
(2) such Guarantor is released from all of its obligations
under this Indenture and its Note Guarantee pursuant to Section 11.05
hereof; provided that termination of the Note Guarantee will only occur
to the extent that the Guarantor's obligations under the Senior Credit
Facility and all of its Guarantees of any other Indebtedness of the
Company also terminate.
89
Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture or in any of the Notes will prevent any consolidation or merger
of a Guarantor with or into the Company or a Wholly Owned Subsidiary of the
Company that is a Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or a Wholly Owned Subsidiary of the Company that is a Guarantor.
Section 11.06 Releases.
(a) In the event of any sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the Capital
Stock of any Guarantor, in each case to a Person that is not (either before or
after giving effect to such transactions) the Company or a Restricted Subsidiary
of the Company, then such Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of all of the Capital
Stock of such Guarantor) or the Person acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Note
Guarantee; provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.10 hereof. Upon delivery by the Company
to the Trustee of an Officer's Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in accordance
with the provisions of this Indenture, including without limitation Section 4.10
hereof, the Trustee will execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Note
Guarantee.
(b) Upon designation of any Guarantor as an Unrestricted
Subsidiary in accordance with the terms of this Indenture, such Guarantor will
be released and relieved of any obligations under its Note Guarantee.
(c) Upon Legal Defeasance in accordance with Article 8 hereof or
satisfaction and discharge of this Indenture in accordance with Article 12
hereof, each Guarantor will be released and relieved of any obligations under
its Note Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee as provided in this Section 11.05 will remain liable for the full
amount of principal of and interest and premium and Liquidated Damages, if any,
on the Notes and for the other obligations of any Guarantor under this Indenture
as and to the extent provided in this Article 11.
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties will control.
Section 12.02 Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or by
first class mail (registered or certified, return receipt requested), facsimile
transmission or overnight air courier guaranteeing next day delivery, to the
others' address:
90
If to the Company and/or any Guarantor:
General Nutrition Centers, Inc.
300 Sixth Avenue
Pittsburgh, Pennsylvania 15222
Facsimile No.: (412) 338-8900
Attention: Chief Legal Officer
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 S. Grand Avenue, Suite 3400
Los Angeles, CA 90071
Facsimile No.: (213) 687-5600
Attention: Jeffrey Cohen
If to the Trustee:
U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107-2292
Facsimile No.: (651) 495-8097
Attention: Frank Leslie
The Company, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
91
Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee, upon
request:
(1) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, will have any liability for any obligations
of the Company or any Guarantor under the Notes, this Indenture, the Note
Guarantees, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
Section 12.08 Governing Law.
THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK,
92
INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE NEW YORK OBLIGATIONS LAW.
Section 12.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10 Successors.
All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.05 hereof.
Section 12.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 12.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 12.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
93
SIGNATURES
Dated as of December 5, 2003
GENERAL NUTRITION CENTERS, INC.
By: /s/ Andrew Jhawar
---------------------------------------
Name: Andrew Jhawar
Title: Vice President
GENERAL NUTRITION INVESTMENT COMPANY
GENERAL NUTRITION SALES CORPORATION
GNC (CANADA) HOLDING COMPANY
GENERAL NUTRITION DISTRIBUTION COMPANY
GENERAL NUTRITION GOVERNMENT SERVICES, INC.
GENERAL NUTRITION INTERNATIONAL, INC.
GN INVESTMENT, INC.
GNC, LIMITED
GNC US DELAWARE, INC.
GENERAL NUTRITION SYSTEMS, INC.
INFORMED NUTRITION, INC.
GENERAL NUTRITION CORPORATION
GENERAL NUTRITION DISTRIBUTION, L.P.
GENERAL NUTRITION, INCORPORATED
GNC FRANCHISING, INC.
NUTRICIA MANUFACTURING USA, INC.
GENERAL NUTRITION COMPANIES, INC.
By: /s/ James Sander
---------------------------------------
Name: James Sander
Title: Senior Vice President, Law,
Chief Legal Officer
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Frank P. Leslie
---------------------------------------
Name: Frank P. Leslie
Title: Vice President
EXHIBIT A1
[Face of Note]
CUSIP/CINS ____________
8-1/2% Senior Subordinated Notes due 2010
No. ___ $____________
GENERAL NUTRITION CENTERS, INC.
promises to pay to_______________ or registered assigns,
the principal sum of __________________________________________________________
DOLLARS on December 1, 2010.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated: __________________
GENERAL NUTRITION CENTERS, INC.
By: ______________________________
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
[TRUSTEE],
as Trustee
By:_____________________________________
Authorized Signatory
A1-1
[Back of Note]
8-1/2% Senior Subordinated Notes due 2010
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. General Nutrition Centers, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 8-1/2% per annum from ________________, 20__
until maturity and shall pay the Liquidated Damages, if any, payable
pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on June 1 and December 1 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day
(each, an "Interest Payment Date"). Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance; provided
that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the
face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided
further that the first Interest Payment Date shall be _____________,
20__. The Company will pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at the rate that is then
in effect on the Notes to the extent lawful; it will pay interest
(including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated
Damages, if any, (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
(2) METHOD OF PAYMENT. The Company will pay interest on the
Notes (except defaulted interest) and Liquidated Damages, if any, to
the Persons who are registered Holders of Notes at the close of
business on the May 15 or November 15 next preceding the applicable
Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted
interest. If a Holder has given wire instructions to the Company, the
Company will pay all principal, interest and premium and Liquidated
Damages, if any, on that Holder's Notes in accordance with those
instructions. All other payments on the Notes will be made at the
office or agency of the Company maintained for such purpose within the
City and State of New York, or, at the option of the Company, payment
of interest and Liquidated Damages, if any, may be made by check mailed
to the Holders at their addresses set forth in the register of Holders;
provided that payment by wire transfer of immediately available funds
to the accounts specified by the Depositary, or its nominee will be
required with respect to principal of and interest, premium and
Liquidated Damages, if any, on, all Global Notes. Such payment will be
in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank, National
Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change
A1-2
any Paying Agent or Registrar without notice to any Holder. The Company
or any of its Subsidiaries may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture
dated as of December 5, 2003 (the "Indenture") among the Company, the
Guarantors and the Trustee. The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to
the TIA. The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms.
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are unsecured obligations of the
Company. The Company will be entitled to issue Additional Notes
pursuant to Section 2.13 of the Indenture.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to December 1, 2007.
On or after December 1, 2007 and prior to maturity, the Company may, at its
option, redeem all or a part of the Notes at any time and from time to time upon
not less than 30 nor more than 90 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, on the Notes redeemed to the
applicable redemption date, if redeemed during the twelve-month period beginning
on December 1, of the years indicated below, subject to the rights of Holders on
the relevant record date to receive interest on the relevant interest payment
date:
Year Percentage
- ---- ----------
2007.......................................... 104.250%
2008.......................................... 102.125%
2009 and thereafter........................... 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to December 1, 2006, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture at a redemption price equal to 108.500% of the
aggregate principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any to the redemption date, with the Net Cash Proceeds of
one or more Equity Offerings; provided that at least 65% in aggregate principal
amount of the Notes originally issued under the Indenture (excluding Notes held
by the Company and its Subsidiaries) remains outstanding immediately after the
occurrence of such redemption and that such redemption occurs within 60 days
after the date of the closing of such Equity Offering.
(6) MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
(7) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, each Holder
will have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000) of that
Holder's Notes, pursuant to an offer that the Company will make to all
Holders at a purchase
A1-3
price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to
the date of purchase, subject to the rights of Holders on the relevant
record date to receive interest due on the relevant interest payment
date. Subject to the exceptions in Section 4.15 of the Indenture,
within thirty days following any Change of Control, the Company will
mail a notice to each Holder with a copy to the Trustee setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary of
the Company consummates any Asset Dispositions, within 15 days of the
periods specified in Section 4.10(3)(A) and (B) of the Indenture, after
which Excess Proceeds exist, the Company will commence an offer to all
Holders of Notes and all holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth
in the Indenture with respect to offers to purchase or redeem at a
purchase price of 100% of the principal amount thereof, plus accrued
and unpaid interest to the Purchase Date, and liquidated damages, if
any, with the proceeds of sales of assets (an "Asset Disposition
Offer") pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount of Notes (including any Additional Notes) and
such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase, in
accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes (including any Additional
Notes) and other pari passu Indebtedness tendered pursuant to an Asset
Disposition Offer is less than the Excess Proceeds, the Company (or
such Restricted Subsidiary) may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness tendered into such
Asset Disposition Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and such other pari passu Indebtedness
to be purchased on a pro rata basis.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 90 days before the redemption date
to each Holder whose Notes are to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note
may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions set forth in Section 9.02 of the Indenture, the Indenture,
the Notes and the Note Guarantees may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes including Additional
Notes, if any, voting as a single class, and any existing Default or
Event or Default or compliance with any provision of the Indenture or
A1-4
the Notes or the Note Guarantees may be waived with the consent of the
Holders of at least a majority in aggregate principal amount of the
then outstanding Notes including Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the
Indenture or the Notes or the Note Guarantees may be amended or
supplemented to cure any ambiguity, omission, defect or inconsistency;
to provide for the assumption by a successor corporation of the
obligations of the Company under the Indenture; to provide for
uncertificated Notes in addition to or in place of certificated notes;
provided, however, that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code; to add Guarantees with respect to the Notes,
to secure the Notes, to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power conferred
upon the Company; to make any change that does not adversely affect the
rights of any Holder; to comply with any requirement of the SEC in
connection with the qualification of the Indenture under the TIA; to
conform the text of the Indenture, the Note Guarantees or the Notes to
any provision of the Description of Notes to the extent that such
provision in the Description of Notes was intended to be a verbatim
recitation of a provision of the Indenture, the Note Guarantees or the
Notes; or to provide for the issuance of Additional Notes in accordance
with the limitations set forth in the Indenture as of the date of the
Indenture.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i) a
default in any payment of interest on, or Liquidated Damages, if any,
with respect to, any Note when due, whether or not such payment is
prohibited by the provisions of Article 10 of the Indenture, continued
for 30 days; (ii) a default in the payment of principal of, or premium,
if any, on any Note when due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise,
whether or not such payment is prohibited by the provisions of Article
10 of the Indenture; (iii) the failure by the Company or any of its
Restricted Subsidiaries to comply with its obligations under Articles 5
of the Indenture; (iv) the failure by the Company or any of its
Restricted Subsidiaries to comply for 30 days after written notice from
the Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes with any of its obligations under Sections 4.07,
4.09, 4.10, 4.15 of the Indenture, in each case, other than a failure
to purchase Notes; (v) the failure by the Company or any of its
Restricted Subsidiaries to comply with its other agreements contained
in the Notes or the Indenture for 60 days after written notice from the
Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes; (vi) the failure by the Company or any Significant
Subsidiary to pay any Indebtedness within any applicable grace period
after final maturity or the acceleration of any such Indebtedness by
the holders thereof because of a default if the total amount of such
Indebtedness unpaid or accelerated exceeds $20 million; (vii) certain
events of bankruptcy or insolvency with respect to the Company or any
of its Significant Subsidiaries specified in the Indenture; (viii) the
rendering of any judgment or decree for the payment of money in an
amount, net of any insurance or indemnity payments actually received in
respect thereof prior to or within 90 days from the entry thereof, or
to be received in respect thereof in the event any appeal thereof shall
be unsuccessful, in excess of $20 million against the Company or a
Significant Subsidiary that is not discharged, bonded or insured by a
third Person if either an enforcement proceeding thereon is commenced,
or such judgment or decree remains outstanding for a period of 90 days
and is not discharged, waived or stayed; or (ix) the failure of any
Guarantee of the Notes by a Guarantor that is a Significant Subsidiary
to be in full force, except as contemplated by the terms thereof or of
the Indenture, or the denial in writing by any such Guarantor of its
obligations under the Indenture or any such Guarantee if such Default
continues for 10 days. If any Event of Default occurs and is
continuing, the Trustee, by notice to the Company, or the Holders of at
least a majority in aggregate principal amount of the then outstanding
Notes, by notice to the Company and the Trustee, may declare all the
Notes to be due and payable immediately. Notwithstanding the
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foregoing, in the case of an Event of Default arising from certain
events of bankruptcy or insolvency set forth in the Indenture, all
outstanding Notes will become due and payable immediately without
further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain
limitations set forth in the Indenture, Holders of at least a majority
in aggregate principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the
payment of principal or interest or premium or Liquidated Damages, if
any,) if it determines that withholding notice is in their interest.
The Holders of at least a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may, on behalf of the
Holders of all of the Notes, rescind an acceleration or waive any
existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the
payment of interest or premium or Liquidated Damages, if any, on, or
the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture,
and the Company is required, upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default, in each case as provided in the Indenture.
(13) SUBORDINATION. Payment of principal, interest and premium
and Liquidated Damages, if any, on the Notes is subordinated to the
prior payment of Senior Indebtedness on the terms provided in the
Indenture.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(15) NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder of the Company or any Guarantor,
as such, will have any liability for any obligations of the Company or
any Guarantor under the Notes, the Indenture, the Note Guarantees, or
for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
(16) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes will have all the rights set
forth in the Registration Rights Agreement dated as of December 5,
2003, among the Company, the Guarantors and the other parties named on
the signature pages thereof or, in the case of Additional Notes,
Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights
agreements, if any, among the Company, and
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the other parties thereto, relating to rights given by the Company to
the purchasers of any Additional Notes (collectively, the "Registration
Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes, and the
Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption, and reliance may be placed only on the other identification
numbers placed thereon.
(20) THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK,
INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE NEW YORK OBLIGATIONS
LAW.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
General Nutrition Centers, Inc.
300 Sixth Avenue
Pittsburgh, Pennsylvania 15222
Attention: Chief Legal Officer
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: _______________________________________
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
-Section 4.10 -Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_________________
Date: _______________
Your Signature: ________________________________________
(Sign exactly as your name appears on the face of this
Note)
Tax Identification No.:_________________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount
Amount of decrease in Amount of increase in of this Global Note following Signature of authorized
Principal Amount of Principal Amount of such decrease officer of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
- ---------------- --------------------- --------------------- ----------------------------- -----------------------
* This schedule should be included only if the Note is issued in global form.
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EXHIBIT A2
[Face of Regulation S Temporary Global Note]
CUSIP/CINS __________
8-1/2% Senior Subordinated Notes due 2010
No. ___ $__________
GENERAL NUTRITION CENTERS, INC.
promises to pay to ___________________ or registered assigns,
the principal sum of __________________________________________________________
DOLLARS on December 1, 2010.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated: ___________________
GENERAL NUTRITION CENTERS, INC.
By:_____________________________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
[TRUSTEE],
as Trustee
By:_________________________________
Authorized Signatory
A2-1
[Back of Regulation S Temporary Global Note]
8-1/2% Senior Subordinated Notes due 2010
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST HEREON. DURING THE PERIOD WHICH SUCH HOLDER
HOLDS THIS NOTE NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THE NOTE.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF GENERAL NUTRITION CENTERS, INC.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (4) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT, IN A TRANSACTION
EXEMPT FROM THE
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REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (5) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED UPON
AN OPINION OF COUNSEL IF GENERAL NUTRITION CENTERS, INC. SO REQUESTS) OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED
STATES.
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. General Nutrition Centers, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 8-1/2% per annum from ________________, 20__
until maturity and shall pay the Liquidated Damages, if any, payable
pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on June 1 and December 1 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day
(each, an "Interest Payment Date"). Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance; provided
that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the
face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date; provided
further that the first Interest Payment Date shall be _____________,
20__. The Company will pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at the rate that is then
in effect on the Notes to the extent lawful; it will pay interest
(including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated
Damages, if any, (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
Until this Regulation S Temporary Global Note is exchanged for one or
more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.
(2) METHOD OF PAYMENT. The Company will pay interest on the
Notes (except defaulted interest) and Liquidated Damages, if any, to
the Persons who are registered Holders of Notes at the close of
business on the May 15 or November 15 next preceding the applicable
Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted
interest. If a Holder has given wire instructions to the Company, the
Company will pay all principal, interest and premium and Liquidated
Damages, if any, on that Holder's Notes in accordance with those
instructions. All other payments on the Notes will be made at the
office or agency of the Company maintained for such purpose within the
City and State of New York, or, at the option of the Company, payment
of interest and Liquidated Damages, if any, may be made by check mailed
to the Holders at their addresses set forth in the register of Holders;
provided that payment by wire transfer of immediately available funds
to the accounts specified by the Depositary, or its nominee will be
required with respect to principal of and interest, premium and
Liquidated Damages, if any, on, all Global Notes. Such payment will be
in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
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(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National
Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture
dated as of December 5, 2003 (the "Indenture") among the Company, the
Guarantors and the Trustee. The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to
the TIA. The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms.
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are unsecured obligations of the
Company. The Company will be entitled to issue Additional Notes
pursuant to Section 2.13 of the Indenture.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Company will not have the option to redeem the Notes prior to December 1,
2007. On or after December 1, 2007 and prior to maturity, the Company may, at
its option, redeem all or a part of the Notes at any time and from time to time
upon not less than 30 nor more than 90 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, on the Notes redeemed to the
applicable redemption date, if redeemed during the twelve-month period beginning
on December 1, of the years indicated below, subject to the rights of Holders on
the relevant record date to receive interest on the relevant interest payment
date:
Year Percentage
- ---- ----------
2007......................................... 104.250%
2008......................................... 102.125%
2009 and thereafter.......................... 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to December 1, 2006, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture at a redemption price equal to 108.500% of the
aggregate principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any to the redemption date, with the Net Cash Proceeds of
one or more Equity Offerings; provided that at least 65% in aggregate principal
amount of the Notes originally issued under the Indenture (excluding Notes held
by the Company and its Subsidiaries) remains outstanding immediately after the
occurrence of such redemption and that such redemption occurs within 60 days
after the date of the closing of such Equity Offering.
(6) MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
A2-4
(7) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, each Holder
will have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000) of that
Holder's Notes, pursuant to an offer that the Company will make to all
Holders at a purchase price in cash equal to 101% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, subject to the rights
of Holders on the relevant record date to receive interest due on the
relevant interest payment date. Subject to the exceptions in Section
4.15 of the Indenture, within thirty days following any Change of
Control, the Company will mail a notice to each Holder with a copy to
the Trustee setting forth the procedures governing the Change of
Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary of
the Company consummates any Asset Dispositions, within 15 days of the
periods specified in Section 4.10(3)(A) and (B) of the Indenture, after
which Excess Proceeds exist, the Company will commence an offer to all
Holders of Notes and all holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth
in the Indenture with respect to offers to purchase or redeem at a
purchase price of 100% of the principal amount thereof, plus accrued
and unpaid interest to the Purchase Date, and liquidated damages, if
any, with the proceeds of sales of assets (an "Asset Disposition
Offer") pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount of Notes (including any Additional Notes) and
such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase, in
accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes (including any Additional
Notes) and other pari passu Indebtedness tendered pursuant to an Asset
Disposition Offer is less than the Excess Proceeds, the Company (or
such Restricted Subsidiary) may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness tendered into such
Asset Disposition Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and such other pari passu Indebtedness
to be purchased on a pro rata basis.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 90 days before the redemption date
to each Holder whose Notes are to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day distribution compliance period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
A2-5
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note
may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions set forth in Section 9.02 of the Indenture, the Indenture,
the Notes and the Note Guarantees may be amended or supplemented with
the consent of the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes including Additional
Notes, if any, voting as a single class, and any existing Default or
Event or Default or compliance with any provision of the Indenture or
the Notes or the Note Guarantees may be waived with the consent of the
Holders of at least a majority in aggregate principal amount of the
then outstanding Notes including Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the
Indenture or the Notes or the Note Guarantees may be amended or
supplemented to cure any ambiguity, omission, defect or inconsistency;
to provide for the assumption by a successor corporation of the
obligations of the Company under the Indenture; to provide for
uncertificated Notes in addition to or in place of certificated notes;
provided, however, that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Notes are described in Section
163(f)(2)(B) of the Code; to add Guarantees with respect to the Notes,
to secure the Notes, to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power conferred
upon the Company; to make any change that does not adversely affect the
rights of any Holder; to comply with any requirement of the SEC in
connection with the qualification of the Indenture under the TIA; to
conform the text of the Indenture, the Note Guarantees or the Notes to
any provision of the Description of Notes to the extent that such
provision in the Description of Notes was intended to be a verbatim
recitation of a provision of the Indenture, the Note Guarantees or the
Notes; or to provide for the issuance of Additional Notes in accordance
with the limitations set forth in the Indenture as of the date of the
Indenture.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i) a
default in any payment of interest on, or Liquidated Damages, if any,
with respect to, any Note when due, whether or not such payment is
prohibited by the provisions of Article 10 of the Indenture, continued
for 30 days; (ii) a default in the payment of principal of, or premium,
if any, on any Note when due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise,
whether or not such payment is prohibited by the provisions of Article
10 of the Indenture; (iii) the failure by the Company or any of its
Restricted Subsidiaries to comply with its obligations under Articles 5
of the Indenture; (iv) the failure by the Company or any of its
Restricted Subsidiaries to comply for 30 days after written notice from
the Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes with any of its obligations under Sections 4.07,
4.09, 4.10, 4.15 of the Indenture, in each case, other than a failure
to purchase Notes; (v) the failure by the Company or any of its
Restricted Subsidiaries to comply with its other agreements contained
in the Notes or the Indenture for 60 days after written notice from the
Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes; (vi) the failure by the Company or any Significant
Subsidiary to pay any Indebtedness within any applicable grace period
after final maturity or the acceleration of any such Indebtedness by
the holders thereof because of a default if the total amount of such
Indebtedness unpaid or accelerated exceeds $20 million; (vii) certain
events of bankruptcy or insolvency with respect to the Company or any
of its Significant Subsidiaries specified in the Indenture; (viii) the
rendering of any judgment or decree for the payment of money in an
amount, net of any insurance or
A2-6
indemnity payments actually received in respect thereof prior to or
within 90 days from the entry thereof, or to be received in respect
thereof in the event any appeal thereof shall be unsuccessful, in
excess of $20 million against the Company or a Significant Subsidiary
that is not discharged, bonded or insured by a third Person if either
an enforcement proceeding thereon is commenced, or such judgment or
decree remains outstanding for a period of 90 days and is not
discharged, waived or stayed; or (ix) the failure of any Guarantee of
the Notes by a Guarantor that is a Significant Subsidiary to be in full
force, except as contemplated by the terms thereof or of the Indenture,
or the denial in writing by any such Guarantor of its obligations under
the Indenture or any such Guarantee if such Default continues for 10
days. If any Event of Default occurs and is continuing, the Trustee, by
notice to the Company, or the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes, by notice to
the Company and the Trustee, may declare all the Notes to be due and
payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or
insolvency set forth in the Indenture, all outstanding Notes will
become due and payable immediately without further action or notice.
Holders may not enforce the Indenture or the Notes except as provided
in the Indenture. Subject to certain limitations set forth in the
Indenture, Holders of at least a majority in aggregate principal amount
of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes
notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal or interest or
premium or Liquidated Damages, if any,) if it determines that
withholding notice is in their interest. The Holders of at least a
majority in aggregate principal amount of the then outstanding Notes by
notice to the Trustee may, on behalf of the Holders of all of the
Notes, rescind an acceleration or waive any existing Default or Event
of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest or premium or
Liquidated Damages, if any, on, or the principal of, the Notes. The
Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required,
upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default, in
each case as provided in the Indenture..
(13) SUBORDINATION. Payment of principal, interest and premium
and Liquidated Damages, if any, on the Notes is subordinated to the
prior payment of Senior Indebtedness on the terms provided in the
Indenture.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(15) NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder of the Company or any Guarantor,
as such, will have any liability for any obligations of the Company or
any Guarantor under the Notes, the Indenture, the Note Guarantees, or
for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
(16) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
A2-7
(17) ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes will have all the rights set
forth in the Registration Rights Agreement dated as of December 5,
2003, among the Company, the Guarantors and the other parties named on
the signature pages thereof or, in the case of Additional Notes,
Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights
agreements, if any, among the Company, and the other parties thereto,
relating to rights given by the Company to the purchasers of any
Additional Notes (collectively, the "Registration Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes, and the
Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption, and reliance may be placed only on the other identification
numbers placed thereon.
(20) THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK,
INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE NEW YORK OBLIGATIONS
LAW.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
General Nutrition Centers, Inc.
300 Sixth Avenue
Pittsburgh, Pennsylvania 15222
Attention: Chief Legal Officer
A2-8
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: __________________________________
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
-Section 4.10 -Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_______________
Date: _______________
Your Signature: ________________________________________
(Sign exactly as your name appears on the face of this
Note)
Tax Identification No.: ________________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-10
SCHEDULE OF EXCHANGES OF INTERESTS IN THE REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or exchanges of a part of another
other Restricted Global Note for an interest in this Regulation S Temporary
Global Note, have been made:
Amount of Amount of Principal Amount
decrease in increase in of this
Principal Amount Principal Amount Global Note Signature of
of of following such authorized officer
of this of this decrease of Trustee or
Date of Exchange Global Note Global Note (or increase) Custodian
- ---------------- ---------------- ---------------- ---------------- ------------------
A2-11
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
General Nutrition Centers, Inc.
300 Sixth Avenue
Pittsburgh, Pennsylvania 15222
U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107-2292
Re: 8-1/2% Senior Subordinated Notes Due 2010
Reference is hereby made to the Indenture, dated as of December 5, 2003
(the "Indenture"), among General Nutrition Centers, Inc., as issuer (the
"Company"), the Guarantors party thereto and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A.
The Transfer is being effected pursuant to and in accordance with Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believes is purchasing the beneficial interest or Definitive Note for
its own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A, and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S PERMANENT GLOBAL
NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a Person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being
B-1
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Permanent Global Note,
the Regulation S Temporary Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE
PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR
REGULATION S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144, Rule
903 or Rule 904, and the Transferor hereby further certifies that it
has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies with
the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit
D to the Indenture and (2) an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is in
compliance with the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the IAI Global Note and/or the Restricted Definitive Notes
and in the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of
B-2
the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
____________________________________
[Insert Name of Transferor]
By: ________________________________
Name:
Title:
Dated: _______________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(A) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Permanent Global Note (CUSIP _________), or
(iii) [ ] Regulation S Temporary Global Note (CUSIP _________); or
(iv) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Permanent Global Note (CUSIP _________), or
(iii) [ ] Regulation S Temporary Global Note (CUSIP _________); or
(iv) [ ] IAI Global Note (CUSIP _________); or
(v) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
General Nutrition Centers, Inc.
300 Sixth Avenue
Pittsburgh, Pennsylvania 15222
U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107-2292
Re: 8-1/2% Senior Subordinated Notes Due 2010
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of December 5, 2003
(the "Indenture"), among General Nutrition Centers, Inc., as issuer (the
"Company"), the Guarantors party thereto and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for
C-1
a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
C-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
____________________________________
[Insert Name of Transferor]
By: __________________________________
Name:
Title:
Dated: ______________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
General Nutrition Centers, Inc.
300 Sixth Avenue
Pittsburgh, Pennsylvania 15222
U.S. Bank National Association
60 Livingston Avenue
St. Paul, MN 55107-2292
Re: 8-1/2% Senior Subordinated Notes Due 2010
Reference is hereby made to the Indenture, dated as of December 5, 2003
(the "Indenture"), among General Nutrition Centers, Inc., as issuer (the
"Company"), the guarantors party thereto and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
________________________________________________
[Insert Name of Accredited Investor]
By: ____________________________________________
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of December 5, 2003 (the "Indenture") among
General Nutrition Centers, Inc., (the "Company"), the Guarantors party thereto
and U.S. Bank National Association, as trustee (the "Trustee"), (a) the due and
punctual payment of the principal of, premium and Liquidated Damages, if any,
and interest on, the Notes, whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal of and
interest on the Notes, if any, if lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms of the Indenture and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Guarantors to the Holders of
Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are
expressly set forth in Article 11 of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Note Guarantee.
Capitalized terms used but not defined herein have the meanings given
to them in the Indenture.
[Signatures on following pages]
E-1
EXHIBIT E
[NAME OF GUARANTOR(S)]
By: ______________________________________
Name:
Title:
E-2
EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 20__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of General Nutrition Centers, Inc. (or its permitted
successor), a [___________] corporation (the "Company"), the Company, the other
Guarantors (as defined in the Indenture referred to herein) and U.S. Bank
National Association, as trustee under the Indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of December 5, 2003 providing
for the issuance of 8-1/2% Senior Subordinated Notes due 2010 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees to provide an unconditional Guarantee on the terms and subject to the
conditions set forth in the Note Guarantee and in the Indenture including but
not limited to Article 11 thereof.
4. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, will have
any liability for any obligations of the Company or any Guarantor under the
Notes, the Indenture, the Note Guarantees, or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
5. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK, INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE NEW YORK OBLIGATIONS LAW.
6. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
F-1
EXHIBIT E
7. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
8. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
F-2
EXHIBIT E
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
[COMPANY]
By: _______________________________
Name:
Title:
[EXISTING GUARANTORS]
By: _______________________________
Name:
Title:
[TRUSTEE],
as Trustee
By: _______________________________
Authorized Signatory
F-3