EXHIBIT 4.2
CANANDAIGUA WINE COMPANY, INC., as Issuer,
The Subsidiaries listed on the signature pages
hereto, as Guarantors
and
HARRIS TRUST AND SAVINGS BANK, as Trustee
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INDENTURE
Dated as of October 29, 1996
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$65,000,000
8 3/4% Series B Senior Subordinated Notes due 2003
8 3/4% Series C Senior Subordinated Notes due 2003
TABLE OF CONTENTS
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PARTIES.................................................................1
RECITALS OF THE COMPANY.................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.............................................2
"Acquired Indebtedness"..................................2
"Affiliate"..............................................2
"Asset Sale".............................................3
"Average Life to Stated Maturity"........................3
"Bankruptcy Law".........................................3
"Barton Letter of Credit"................................3
"Board of Directors".....................................3
"Board Resolution".......................................3
"Book-Entry Security"....................................4
"Business Day"...........................................4
"Capital Lease Obligation"...............................4
"Capital Stock"..........................................4
"Cash Equivalents".......................................4
"Change of Control"......................................4
"Closing Date"...........................................5
"Code"...................................................5
"Commission".............................................6
"Company"................................................6
"Company Request" or "Company Order".....................6
"Consolidated Fixed Charge Coverage Ratio"...............6
"Consolidated Income Tax Expense"........................6
"Consolidated Interest Expense"..........................7
"Consolidated Net Income (Loss)".........................7
"Consolidated Net Worth".................................7
"Consolidated Non-cash Charges"..........................7
"Consolidation"..........................................7
"Corporate Trust Office".................................8
(i)
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"Credit Agreement"................................................8
"Default".........................................................8
"Depositary"......................................................8
"Designated Senior Guarantor Indebtedness"........................8
"Designated Senior Indebtedness"..................................9
"Event of Default"................................................9
"Exchange Act"....................................................9
"Exchange Offer"..................................................9
"Exchange Offer Registration Statement"...........................9
"Fair Market Value"...............................................9
"GAAP" or "Generally Accepted Accounting Principles"..............9
"Global Securities"...............................................9
"Guarantee".......................................................9
"Guaranteed Debt".................................................9
"Guarantor"......................................................10
"Holder".........................................................10
"Indebtedness"...................................................10
"Indenture"......................................................11
"Indenture Obligations"..........................................11
"Initial Securities".............................................11
"Initial Purchasers".............................................11
"Interest Payment Date"..........................................11
"Interest Rate Agreements".......................................11
"Investments"....................................................11
"Lien"...........................................................12
"Maturity".......................................................12
"Moody's"........................................................12
"Net Cash Proceeds"..............................................12
"Non-payment Default"............................................13
"Non-U.S. Person"................................................13
"Officers' Certificate"..........................................13
"Opinion of Counsel".............................................13
"Opinion of Independent Counsel".................................13
"Original Indenture".............................................13
"Original Securities"............................................13
"Outstanding"....................................................13
"Pari Passu Indebtedness"........................................14
"Paying Agent"...................................................14
"Payment Default"................................................14
"Permitted Guarantor Junior Securities"..........................15
"Permitted Holders"..............................................15
(ii)
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"Permitted Investment".........................................15
"Permitted Junior Securities"..................................15
"Person".......................................................16
"Predecessor Security".........................................16
"Preferred Stock"..............................................16
"Qualified Capital Stock"......................................16
"QIB"..........................................................16
"Redeemable Capital Stock".....................................16
"Redemption Date"..............................................16
"Redemption Price".............................................17
"Registration Rights Agreement"................................17
"Registration Statement".......................................17
"Regular Record Date"..........................................17
"Responsible Officer"..........................................17
"Restricted Payment"...........................................17
"S&P"..........................................................17
"Sale and Leaseback Transaction"...............................17
"Securities Act"...............................................17
"Security Register" and "Security Registrar"...................17
"Senior Guarantor Indebtedness"................................17
"Senior Indebtedness"..........................................18
"Shelf Registration Statement".................................19
"Special Record Date"..........................................19
"Stated Maturity"..............................................19
"Subordinated Indebtedness"....................................19
"Subsidiary"...................................................19
"Temporary Cash Investments"...................................20
"Trust Indenture Act"..........................................20
"Trustee"......................................................20
"Voting Stock".................................................20
"Wholly Owned Subsidiary"......................................20
Section 102. Other Definitions..............................................21
Section 103. Compliance Certificates and Opinions...........................21
Section 104. Form of Documents Delivered to Trustee.........................22
Section 105. Acts of Holders................................................23
Section 106. Notices, etc., to the Trustee, the Company and any Guarantor...24
Section 107. Notice to Holders; Waiver......................................25
Section 108. Conflict with Trust Indenture Act..............................25
Section 109. Effect of Headings and Table of Contents.......................25
Section 110. Successors and Assigns.........................................26
Section 111. Separability Clause............................................26
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Section 112. Benefits of Indenture.........................................26
Section 113. GOVERNING LAW.................................................26
Section 114. Legal Holidays................................................26
Section 115. Schedules and Exhibits........................................26
Section 116. Counterparts..................................................27
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally..............................................27
Section 202. Form of Face of Security.....................................28
Section 203. Form of Reverse of Securities................................38
Section 204. Form of Trustee's Certificate of Authentication..............46
Section 205. Form of Guarantee of Each of the Guarantors..................47
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms..............................................53
Section 302. Denominations................................................54
Section 303. Execution, Authentication, Delivery and Dating...............54
Section 304. Temporary Securities.........................................55
Section 305. Registration, Registration of Transfer and Exchange..........56
Section 306. Book-Entry Provisions for U.S. Global Security...............58
Section 307. Special Transfer Provisions..................................59
Section 308. Mutilated, Destroyed, Lost and Stolen Securities.............64
Section 309. Payment of Interest; Interest Rights Preserved...............65
Section 310. CUSIP Numbers................................................66
Section 311. Persons Deemed Owners........................................66
Section 312. Cancellation.................................................67
Section 313. Computation of Interest......................................67
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant
Defeasance...................................................67
Section 402. Defeasance and Discharge.....................................67
Section 403. Covenant Defeasance..........................................68
Section 404. Conditions to Defeasance or Covenant Defeasance..............68
Section 405. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions................71
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Section 406. Reinstatement.................................................72
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.............................................72
Section 502. Acceleration of Maturity; Rescission and Annulment............74
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.......................................................76
Section 504. Trustee May File Proofs of Claim..............................77
Section 505. Trustee May Enforce Claims without Possession of Securities...77
Section 506. Application of Money Collected................................78
Section 507. Limitation on Suits...........................................78
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest..........................................79
Section 509. Restoration of Rights and Remedies............................79
Section 510. Rights and Remedies Cumulative................................80
Section 511. Delay or Omission Not Waiver..................................80
Section 512. Control by Holders............................................80
Section 513. Waiver of Past Defaults.......................................80
Section 514. Undertaking for Costs.........................................81
Section 515. Waiver of Stay, Extension or Usury Laws.......................81
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults...........................................82
Section 602. Certain Rights of Trustee....................................82
Section 603. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof................83
Section 604. Trustee and Agents May Hold Securities; Collections; etc.....84
Section 605. Money Held in Trust..........................................84
Section 606. Compensation and Indemnification of Trustee and Its Prior
Claim........................................................84
Section 607. Conflicting Interests........................................85
Section 608. Corporate Trustee Required; Eligibility......................85
Section 609. Resignation and Removal; Appointment of Successor Trustee....86
Section 610. Acceptance of Appointment by Successor.......................87
Section 611. Merger, Conversion, Consolidation or Succession to
Business.....................................................88
Section 612. Preferential Collection of Claims Against Company............89
(v)
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders....89
Section 702. Disclosure of Names and Addresses of Holders.................89
Section 703. Reports by Trustee...........................................90
Section 704. Reports by Company and Guarantors............................90
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. Company or Any Guarantor May Consolidate, etc., Only on Certain
Terms.........................................................91
Section 802. Successor Substituted.........................................93
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of
Holders......................................................93
Section 902. Supplemental Indentures and Agreements with Consent of
Holders......................................................94
Section 903. Execution of Supplemental Indentures and Agreements..........96
Section 904. Effect of Supplemental Indentures............................96
Section 905. Conformity with Trust Indenture Act..........................96
Section 906. Reference in Securities to Supplemental Indentures...........96
Section 907. Effect on Senior Indebtedness................................97
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest..................97
Section 1002. Maintenance of Office or Agency.............................97
Section 1003. Money for Security Payments to Be Held in Trust.............97
Section 1004. Corporate Existence.........................................99
Section 1005. Payment of Taxes and Other Claims...........................99
Section 1006. Maintenance of Properties..................................100
Section 1007. Insurance..................................................100
Section 1008. Limitation on Indebtedness.................................100
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Section 1009. Limitation on Restricted Payments..........................103
Section 1010. Limitation on Transactions with Affiliates.................106
Section 1011. Limitation on Senior Subordinated Indebtedness.............106
Section 1012. Limitation on Liens........................................106
Section 1013. Limitation on Sale of Assets...............................108
Section 1014. Limitation on Issuances of Guarantees of and Pledges for
Indebtedness...............................................112
Section 1015. Restriction on Transfer of Assets..........................113
Section 1016. Purchase of Securities upon a Change of Control............114
Section 1017. Limitation on Subsidiary Capital Stock.....................117
Section 1018. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.....................................118
Section 1019. Provision of Financial Statements..........................118
Section 1020. Statement by Officers as to Default........................119
Section 1021. Waiver of Certain Covenants................................119
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.......................................120
Section 1102. Applicability of Article...................................120
Section 1103. Election to Redeem; Notice to Trustee......................120
Section 1104. Selection by Trustee of Securities to Be Redeemed..........121
Section 1105. Notice of Redemption.......................................121
Section 1106. Deposit of Redemption Price................................122
Section 1107. Securities Payable on Redemption Date......................122
Section 1108. Securities Redeemed or Purchased in Part...................123
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
Section 1201. Securities Subordinate to Senior Indebtedness..............123
Section 1202. Payment Over of Proceeds Upon Dissolution, etc.............123
Section 1203. Suspension of Payment When Senior Indebtedness in Default..125
Section 1204. Payment Permitted if No Default............................126
Section 1205. Subrogation to Rights of Holders of Senior Indebtedness....127
Section 1206. Provisions Solely to Define Relative Rights................127
Section 1207. Trustee to Effectuate Subordination........................127
Section 1208. No Waiver of Subordination Provisions......................128
Section 1209. Notice to Trustee..........................................128
Section 1210. Reliance on Judicial Order or Certificate of Liquidating
Agent......................................................129
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Section 1211. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights................................130
Section 1212. Article Applicable to Paying Agents.............................130
Section 1213. No Suspension of Remedies.......................................130
Section 1214. Trustee's Relation to Senior Indebtedness.......................130
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 1301. Satisfaction and Discharge of Indenture...........................131
Section 1302. Application of Trust Money........................................132
ARTICLE FOURTEEN
GUARANTEES
Section 1401. Guarantors' Guarantee.............................................132
Section 1402. Continuing Guarantee; No Right of Set-Off; Independent
Obligation........................................................133
Section 1403. Guarantee Absolute................................................134
Section 1404. Right to Demand Full Performance..................................136
Section 1405. Waivers...........................................................137
Section 1406. The Guarantors Remain Obligated in Event the Company Is
No Longer Obligated to Discharge Indenture Obligations............137
Section 1407. Fraudulent Conveyance; Subrogation................................138
Section 1408. Guarantee Is in Addition to Other Security........................138
Section 1409. Release of Security Interests.....................................138
Section 1410. No Bar to Further Actions.........................................138
Section 1411. Failure to Exercise Rights Shall Not Operate as a Waiver; No
Suspension of Remedies............................................139
Section 1412. Trustee's Duties; Notice to Trustee...............................139
Section 1413. Successors and Assigns............................................139
Section 1414. Release of Guarantee..............................................140
Section 1415. Execution of Guarantee............................................140
Section 1416. Guarantee Subordinate to Senior Guarantor Indebtedness............140
Section 1417. Payment Over of Proceeds Upon Dissolution of the Guarantor, etc...141
Section 1418. Default on Senior Guarantor Indebtedness..........................142
Section 1419. Payment Permitted by Each of the Guarantors if No Default.........143
Section 1420. Subrogation to Rights of Holders of Senior Guarantor
Indebtedness......................................................143
Section 1421. Provisions Solely to Define Relative Rights.......................143
Section 1422. Trustee to Effectuate Subordination...............................144
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Section 1423. No Waiver of Subordination Provisions...........................144
Section 1424. Notice to Trustee by Each of the Guarantors.....................145
Section 1425. Reliance on Judicial Order or Certificate of Liquidating
Agent...........................................................146
Section 1426. Rights of Trustee as a Holder of Senior Guarantor
Indebtedness; Preservation of Trustee's Rights..................146
Section 1427. Article Applicable to Paying Agents.............................147
Section 1428. No Suspension of Remedies.......................................147
Section 1429. Trustee's Relation to Senior Guarantor Indebtedness.............147
TESTIMONIUM ................................................................146
SIGNATURES AND SEALS.............................................................146
ACKNOWLEDGMENTS
SCHEDULE I Permitted Indebtedness
SCHEDULE II List of Dividend Restrictions
EXHIBIT A Form of Intercompany Note
EXHIBIT B Form of Certificate to Be Delivered upon Termination of
Restricted Period
EXHIBIT C Form of Certificate to Be Delivered in Connection with Transfers
to Non-QIB Institutional Accredited Investors
EXHIBIT D Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
APPENDIX I Form of Transfer Notice for Series B Securities
APPENDIX II Form of Transfer Notice for Series C Securities
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Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of October 29, 1996
Trust Indenture Indenture
Act Section Section
- ----------- ---------
(S) 310(a)(1) ............................. 608
(a)(2) ............................. 608
(b) ............................. 607, 609
(S) 311(a) ............................. 612
(S) 312(c) ............................. 702
(S) 313(a) ............................. 703
(c) ............................. 703, 704
(S) 314(a) ............................. 704
(a)(4) ............................. 1020
(c)(1) ............................. 103
(c)(2) ............................. 103
(e) ............................. 103
(S) 315(b) ............................. 601
(S) 316(a)(last
sentence) ............................. 101 ("Outstanding")
(a)(1)(A) ............................. 502, 512
(a)(1)(B) ............................. 513
(b) ............................. 508
(c) ............................. 105
(S) 317(a)(1) ............................. 503
(a)(2) ............................. 504
(b) ............................. 1003
(S) 318(a) ............................. 108
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of this Indenture.
(x)
PARTIES
INDENTURE, dated as of October 29, 1996, among CANANDAIGUA WINE
COMPANY, INC., a Delaware corporation (the "Company"), the Subsidiaries listed
on the signature pages hereto ("Guarantors"), and HARRIS TRUST AND SAVINGS BANK,
an Illinois banking corporation as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 8 3/4%
Series B Senior Subordinated Notes due 2003 (the "Series B Securities" or the
"Initial Securities"), and an issue of 8 3/4% Series C Senior Subordinated Notes
due 2003 (the "Series C Securities", and together with the Series B Securities,
the "Securities"), of substantially the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture and the Securities;
Each Guarantor has duly authorized the issuance of a guarantee (the
"Guarantees") of the Securities, of substantially the tenor hereinafter set
forth, and to provide therefor, each Guarantor has duly authorized the execution
and delivery of this Indenture and the Guarantee;
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act;
All acts and things necessary have been done to make (i) the
Securities, when duly issued and executed by the Company and authenticated and
delivered hereunder, the valid obligations of the Company, (ii) the Guarantees,
when executed by each of the Guarantors and delivered hereunder, the valid
obligation of each of the Guarantors subject to applicable principles of
bankruptcy, creditors' rights and fraudulent conveyance and (iii) this Indenture
a valid agreement of the Company and each of the Guarantors in accordance with
the terms of this Indenture;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions For all purposes of this Indenture, except as
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otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) all references to $, US$, dollars or United States dollars shall
refer to the lawful currency of the United States of America; and
(f) all references herein to particular Sections or Articles refer to
this Indenture unless otherwise so indicated.
Certain terms used principally in Article Four are defined in Article
Four.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing a
t the time such Person becomes a Subsidiary or (ii) assumed in connection with
the acquisition of assets from such Person, in each case, other than
Indebtedness incurred in connection with, or in contemplation of, such Person
Ebecoming a Subsidiary or such acquisition. Acquired Indebtedness shall be
deemed to be incurred on the date of the related acquisition of assets from any
Person or the date the acquired Person becomes a Subsidiary.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person that
owns, directly or indirectly, 5% or more of such Person's Capital Stock or any
officer or director of any such Person or other Person or, with respect to any
natural Person, any person having a relationship with such Person by blood,
marriage or adoption not more remote than first cousin or (iii) any other Person
10% or more of the voting Capital Stock of which are beneficially owned or held
directly or indirectly by such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person
2
means the power to direct the management and policies of such Person directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of (i) any
Capital Stock of any Subsidiary; (ii) all or substantially all of the properties
and assets of any division or line of business of the Company or its
Subsidiaries; or (iii) any other properties or assets of the Company or any
Subsidiary, other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include (x) any transfer of
properties and assets (A) that is governed by Section 801(a) or (B) that is of
the Company to any Wholly Owned Subsidiary, or of any Subsidiary to the Company
or any Wholly Owned Subsidiary in accordance with the terms of this Indenture or
(y) transfers of properties and assets in any given fiscal year with an
aggregate Fair Market Value of less than $1,000,000.
"Average Life to Stated Maturity" means, as of the date o f
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such principal
payment by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of
1978, as amended, or any similar United States Federal or State law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Barton Letter of Credit" means the "Barton Letter of Credit" issued
to American National Bank and Trust Company of Chicago, as escrowee, under the
Credit Agreement.
"Board of Directors" means the board of directors of th e Company or
any Guarantor, as the case may be, or any duly authorized committee of such
board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or any Guarantor, as the case
may be, to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"Book-Entry Security" means any Securities bearing the legend
specified in Section 202 evidencing all or part of a series of Securities,
authenticated and delivered to
3
the Depositary for such series or its nominee, and registered in the name of
such Depositary or nominee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions or trust companies in
The City of New York or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law, regulation or executive
order to close.
"Capital Lease Obligation" means any obligations of the Company and
its Subsidiaries on a Consolidated basis under any capital lease of real or
personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
"Cash Equivalents" means, (i) any evidence of Indebtedness of a
Person, other than the Company or its Subsidiaries, with a maturity of one year
or less from the date of acquisition issued or directly and fully guaranteed or
insured by the United
States of America or any agency or instrumentality thereof (provided, that the
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full faith and credit of the United States of America is pledged in support
thereof); (ii) certificates of deposit or acceptances with a maturity of one
year or less from the date of acquisition of any financial institution that is a
member of the Federal Reserve System having combined capital and surplus and
undivided profits of not less than $500,000,000; (iii) commercial paper with a
maturity of one year or less from the date of acquisition issued by a
corporation that is not an Affiliate of the Company organized under the laws of
any state of the United States or the District of Columbia and rated A-1 (or
higher) according to S&P or P-1 (or higher) according to Moody's or at least an
equivalent rating category of another nationally recognized securities rating
agency; (iv) any money market deposit accounts issued or offered by a domestic
commercial bank having capital and surplus in excess of $500,000,000; and (v)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the government of the
United States of America or issued by any agency thereof and backed by the full
faith and credit of the United States of America, in each case maturing within
one year from the date of acquisition; provided that the terms of such
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agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions With Securities Dealers and Others, as
adopted by the Comptroller of the Currency on October 31, 1985.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time),
4
directly or indirectly, of more than 30% of the voting power of the total
outstanding Voting Stock of the Company voting as one class, provided that the
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Permitted Holders "beneficially own" (as so defined) a percentage of Voting
Stock having a lesser percentage of the voting power than such other Person and
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 of the Company;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board or whose
nomination for election by the shareholders of the Company, was approved by a
vote of 66 2/3% of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board of Directors then in office; (iii) the Company consolidates with or merges
with or into any Person or conveys, transfers or leases all or substantially all
of its assets to any Person, or any corporation consolidates with or merges into
or with the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for cash,
securities or other property, other than any such transaction where the
outstanding Voting Stock of the Company is not changed or exchanged at all
(except to the extent necessary to reflect a change in the jurisdiction of
incorporation of the Company) or where (A) the outstanding Voting Stock of the
Company is changed into or exchanged for (x) Voting Stock of the surviving
corporation which is not Redeemable Capital Stock or (y) cash, securities and
other property (other than Capital Stock of the surviving corporation) in an
amount which could be paid by the Company as a Restricted Payment in accordance
with Section 1009 (and such amount shall be treated as a Restricted Payment
subject to the provisions described under Section 1009) and (B) no "person" or
"group" other than Permitted Holders owns immediately after such transaction,
directly or indirectly, more than the greater of (1) 30% of the voting power of
the total outstanding Voting Stock of the surviving corporation voting as one
class and (2) the percentage of such voting power of the surviving corporation
held, directly or indirectly, by Permitted Holders immediately after such
transaction; or (iv) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with the
provisions described under Article Eight.
"Closing Date" is defined to mean the date on which the Series B
Securities are originally issued under this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
5
"Company" means Canandaigua Wine Company, Inc., a corporation
incorporated under the laws of Delaware, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice-Chairman, its President, its Chief Operating Officer or a Vice President
(regardless of Vice Presidential designation), and by any one of its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Fixed Charge Coverage Ratio" of the Company means, for
any period, the ratio of (a) the sum of Consolidated Net Income (Loss),
Consolidated Interest Expense, Consolidated Income Tax Expense and Consolidated
Non-cash Charges deducted in computing Consolidated Net Income (Loss) in each
case, for such period, of the Company and its Subsidiaries on a Consolidated
basis, all determined in accordance with GAAP to (b) the sum of Consolidated
Interest Expense for such period and cash and non-cash dividends paid on any
Preferred Stock of the Company during such period; provided that (i) in making
such computation, the Consolidated Interest --------
Expense attributable to interest on any Indebtedness computed on a pro forma
--- -----
basis and (A) bearing a floating interest rate, shall be computed as if the rate
in effect on the date of computation had been the applicable rate for the entire
period and (B) which was not outstanding during the period for which the
computation is being made but which bears, at the option of the Company, a fixed
or floating rate of interest, shall be computed by applying at the option of the
Company, either the fixed or floating rate and (ii) in making such computation,
the Consolidated Interest Expense of the Company attributable to interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
--- -----
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period.
"Consolidated Income Tax Expense" means for any period, as applied to
the Company , the provision for federal, state, local and foreign income taxes
of the Company and its Consolidated Subsidiaries for such period as determined
in accordance with GAAP on a Consolidated basis.
"Consolidated Interest Expense" of the Company means, without
duplication , for any period, the sum of (a) the interest expense of the Company
and its Consolidated Subsidiaries for such period, on a Consolidated basis,
including, without limitation, (i) amortization of debt discount, (ii) the net
cost under interest rate contracts (including amortization of discounts), (iii)
the interest portion of any deferred payment obligation and (iv) accrued
interest, plus (b) (i) the interest component of the Capital Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by the Company during such
period and (ii) all capitalized interest of the Company and its Consolidated
6
Subsidiaries, in each case as determined in accordance with GAAP on a
Consolidated basis.
"Consolidated Net Income (Loss)" of the Company means, for any period,
the Consolidated net income (or loss) of the Company and its Consolidated
Subsidiaries for such period as determined in accordance with GAAP on a
Consolidated basis, adjusted, to the extent included in calculating such net
income (loss), by excluding, without duplication, (i) all extraordinary gains or
losses (less all fees and expenses relating thereto), (ii) the portion of net
income (or loss) of the Company and its Consolidated Subsidiaries allocable to
minority interests in unconsolidated Persons to the extent that cash dividends
or distributions have not actually been received by the Company or one of its
Consolidated Subsidiaries, (iii) net income (or loss) of any Person combined
with the Company or any of its Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (iv) any gain or
loss, net of taxes, realized upon the termination of any employee pension
benefit plan, (v) net gains (but not losses) (less all fees and expenses
relating thereto) in respect of dispositions of assets other than in the
ordinary course of business, or (vi) the net income of any Subsidiary to the
extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulations applicable to that
Subsidiary or its stockholders.
"Consolidated Net Worth" of any Person means the Consolidated
stockholders' equity (excluding Redeemable Capital Stock) of such Person and its
subsidiaries, as determined in accordance with GAAP on a Consolidated basis.
"Consolidated Non-cash Charges" of the Company means, for any period,
the aggregate depreciation, amortization and other non-cash charges of the
Company and its Consolidated subsidiaries for such period, as determined in
accordance with GAAP (excluding any non-cash charge which requires an accrual or
reserve for cash charges for any future period).
"Consolidation" means, with respect to any Person, the consolidation
of the accounts of such Person and each of its subsidiaries if and to the extent
the accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the office of the Trustee or an
affiliate or agent thereof at which at any particular time the corporate trust
business for the purposes of this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at 311 West
Monroe Street, 12th Floor, Chicago, Illinois 60606.
7
"Credit Agreement" means the Credit Agreement, dated as of June 29,
1993, between the Company, the Subsidiaries of the Company identified on the
signature pages thereof under the caption "Subsidiary Guarantors," the lenders
named therein and The Chase Manhattan Bank, as agent, including any ancillary
documents executed in connection therewith, as such agreement has and may be
amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other modifications of the
foregoing). For all purposes under this Indenture, "Credit Agreement" shall
include any amendments, renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplements or any other modifications that
increase the principal amount of the Indebtedness or the commitments to lend
thereunder and have been made in compliance with Section 1008; provided that,
for purposes of the--------definition of "Permitted Indebtedness," no such
increase may result in the principal amount of Indebtedness of the Company under
the Credit Agreement exceeding the amount permitted by Section 1008(b)(i).
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issued in the form
of one or more Book-Entry Securities, The Depository Trust Company ("DTC"), its
nominees and successors, or another Person designated as Depositary by the
Company, which must be a clearing agency registered under the Exchange Act.
"Designated Senior Guarantor Indebtedness" means (i) all Senior
Guarantor Indebtedness which guarantees Indebtedness under the Credit Agreement
and (ii) any other Senior Guarantor Indebtedness which is incurred pursuant to
an agreement (or series of related agreements) simultaneously entered into
providing for Indebtedness, or commitments to lend, of at least $30,000,000 at
the time of determination and is specifically designated in the instrument
evidencing such Senior Guarantor Indebtedness or the agreement under which such
Senior Guarantor Indebtedness arises as "Designated Senior Guarantor
Indebtedness" by the Guarantor which is the obligor under the Senior Guarantor
Indebtedness.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness
under the Credit Agreement and (ii) any other Senior Indebtedness which is
incurred pursuant to an agreement (or series of related agreements)
simultaneously entered into providing for Indebtedness, or commitments to lend,
of at least $30,000,000 at the time of determination and is specifically
designated in the instrument evidencing such Senior Indebtedness or the
agreement under which such Senior Indebtedness arises as "Designated Senior
Indebtedness" by the Company.
"Event of Default" has the meaning specified in Section 501.
8
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the exchange offer by the Company of Series C
Securities for Series B Securities to be effected pursuant to Section 1 of the
Registration Rights Agreement.
"Exchange Offer Registration Statement" means the registration
statement under The Securities Act contemplated by Section 1 of the Registration
Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of this Indenture.
"Global Securities" means a security evidencing all or a part of the
Securities to be issued as Book-Entry Securities issued to the Depositary in
accordance with Section 305.
"Guarantee" means the guarantee by any Guarantor of the Company's
Indenture Obligations pursuant to a guarantee given in accordance with this
Indenture, including the Guarantees by the Guarantors included in Article
Fourteen of this Indenture and any Guarantee delivered pursuant to Section 1014.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
contained in this Section guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "guarantee" shall not include endorsements
--------
for collection or deposit, in either case in the ordinary course of business.
9
"Guarantor" means the Subsidiaries listed on the signature pages
hereto as guarantors or any other guarantor of the Indenture Obligations.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities arising in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit issued under letter of credit
facilities, acceptance facilities or other similar facilities and in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any Capital Stock of such Person, or any warrants, rights or options
to acquire such Capital Stock, now or hereafter outstanding, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements of such Person,
(v) all Capital Lease Obligations of such Person, (vi) all Indebtedness referred
to in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person, (viii) all Redeemable Capital Stock valued at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends, and (ix) any amendment, supplement, modification,
deferral, renewal, extension, refunding or refinancing of any liability of the
types referred to in clauses (i) through (viii) above. For purposes hereof, the
"maximum fixed repurchase price" of any Redeemable Capital Stock which does not
have a fixed repurchase price shall be calculated in accordance with the terms
of such Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by, the
Fair Market Value of such Redeemable Capital Stock, such Fair Market Value to be
determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules thereto) and as it may from time to time be
supplemented or
10
amended by one or more indentures supplemental hereto entered into pursuant to
the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Securities, including any
Guarantor, to pay principal of, premium, if any, and interest when due and
payable, and all other amounts due or to become due under or in connection with
this Indenture, the Securities and the performance of all other obligations to
the Trustee and the Holders under this Indenture and the Securities, according
to the terms hereof and thereof.
"Initial Securities" has the meaning stated in the first recital of
this Indenture.
"Initial Purchasers" means Chase Securities Inc. and CS First Boston
Corporation.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Agreements" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements) and/or other types of
interest rate hedging agreements from time to time .
"Investments" means, with respect to any Person, directly or
indirectly, any advance, loan (including guarantees), or other extension of
credit or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase, acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities issued or owned by,
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein provided
or as provided in this Indenture, whether at Stated Maturity, the Offer Date or
the Redemption Date and whether by declaration of acceleration, Offer in respect
of Excess Proceeds, Change of Control, call for redemption or otherwise.
11
"Moody's" means Moody's Investors Service, Inc. or any successor
rating agency.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof in the form of cash or Temporary Cash Investments
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed of for, cash or Temporary
Cash Investments (except to the extent that such obligations are financed or
sold with recourse to the Company or any Subsidiary) net of (i) brokerage
commissions and other actual fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii) provisions for
all taxes payable as a result of such Asset Sale, (iii) payments made to retire
Indebtedness where payment of such Indebtedness is secured by the assets or
properties the subject of such Asset Sale, (iv) amounts required to be paid to
any Person (other than the Company or any Subsidiary) owning a beneficial
interest in the assets subject to the Asset Sale and (v) appropriate amounts to
be provided by the Company or any Subsidiary, as the case may be, as a reserve,
in accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by the Company or any Subsidiary, as the case may be, after such
Asset Sale, including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such Asset
Sale, all as reflected in an Officers' Certificate delivered to the Trustee and
(b) with respect to any issuance or sale of Capital Stock or options, warrants
or rights to purchase Capital Stock, or debt securities or Capital Stock that
have been converted into or exchanged for Capital Stock, as referred to under
Section 1009, the proceeds of such issuance or sale in the form of cash or
Temporary Cash Investments, including payments in respect of deferred payment
obligations when received in the form of, or stock or other assets when disposed
for, cash or Temporary Cash Investments (except to the extent that such
obligations are financed or sold with recourse to the Company or any
Subsidiary), net of attorneys' fees, accountants' fees and brokerage,
consultation, underwriting and other fees and expenses actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-payment Default" means any event (other than a Payment Default)
the occurrence of which entitles one or more Persons to accelerate the maturity
of any Designated Senior Indebtedness.
"Non-U.S. Person" means a Person that is not a "U.S. person" as
defined in Regulation S under the Securities Act.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, Vice Chairman, the President, the Chief Operating Officer or a Vice
President (regardless of Vice Presidential designation), and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company
or any Guarantor, as the case may be, and delivered to the Trustee.
12
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or any Guarantor, as applicable, unless an Opinion of
Independent Counsel is required pursuant to the terms of this Indenture, and who
shall be acceptable to the Trustee.
"Opinion of Independent Counsel" means a written opinion of counsel
issued by someone who is not an employee or consultant (other than non-employee
legal counsel) of the Company or any Guarantor and who shall be reasonably
acceptable to the Trustee.
"Original Indenture" means the Indenture, dated as of December 27,
1993, among the Company, the Subsidiaries listed on the signature pages thereto
and The Chase Manhattan Bank (successor by merger to Chemical Bank), as trustee,
relating to the Original Securities.
"Original Securities"
means the Company's 8-3/4% Senior Subordinated Notes due 2003 issued
pursuant to the Original Indenture.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders; provided that if such Securities are to be redeemed, notice of such
--------
redemption has been duly given pursuant to this Indenture or provision therefor
reasonably satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 402 and 403,
with respect to which the Company has effected defeasance or covenant defeasance
as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof reasonably satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands the Securities are valid obligations of the
Company;
13
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company, any Guarantor, or any other obligor upon the Securities or any
Affiliate of the Company, any Guarantor, or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the reasonable satisfaction of the Trustee the pledgee's right so
to act with respect to such Securities and that the pledgee is not the Company,
any Guarantor or any other obligor upon the Securities or any Affiliate of the
Company, any Guarantor or such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company or a
Guarantor that is pari passu in right of payment to the Securities or a
---- -----
Guarantee, as the case may be.
"Paying Agent" means any Person authorized by the Company to pay the
principal, premium, if any, or interest on any Securities on behalf of the
Company.
"Payment Default" means any default in the payment of principal,
premium, if any, or interest, on any Designated Senior Indebtedness.
"Permitted Guarantor Junior Securities" means, so long as the effect
of any exclusion employing this definition is not to cause the Guarantee to be
treated in any case or proceeding or similar event described in clauses (a), (b)
or (c) of Section 1417 as part of the same class of claims as the Senior
Guarantor Indebtedness or any class of claims pari passu with, or senior to, the
Senior Guarantor Indebtedness, for any payment or distribution, debt or equity
securities of any Guarantor or any successor corporation provided for by a plan
of reorganization or readjustment that are subordinated at least to the same
extent that the Guarantee is subordinated to the payment of all Senior Guarantor
Indebtedness then outstanding; provided that (1) if a new corporation results
--------
from such reorganization or readjustment, such corporation assumes any Senior
Guarantor Indebtedness not paid in full in cash or Cash Equivalents in
connection with such reorganization or readjustment and (2) the rights of the
holders of such Senior Guarantor Indebtedness are not, without the consent of
such holders, altered by such reorganization or readjustment.
"Permitted Holders" means as of the date of determination (i) Marvin
Sands, Richard Sands and Robert Sands; (ii) family members or the relatives of
the Persons described in clause (i); (iii) any trusts created for the benefit of
the Persons described in clauses (i), (ii) or (iv) or any trust for the benefit
of any such trust; or (iv) in the event of the incompetence or death of any of
the persons described in clauses (i) and
14
(ii), such Person's estate, executor, administrator, committee or other personal
representative or beneficiaries, in each case who at any particular date shall
beneficially own or have the right to acquire, directly or indirectly, Capital
Stock of the Company.
"Permitted Investment" means (i) Investments in any Wholly Owned
Subsidiary or any Person which, as a result of such Investment, becomes a Wholly
Owned Subsidiary; (ii) Indebtedness of the Company or a Subsidiary described
under clauses (iv) and (v) of the definition of "Permitted Indebtedness"; (iii)
Temporary Cash Investments; (iv) Investments acquired by the Company or any
Subsidiary in connection with an Asset Sale permitted under Section 1013 to the
extent such Investments are non-cash proceeds as permitted under such covenant;
(v) guarantees of Indebtedness otherwise permitted by the Indenture; and (vi)
Investments in existence on the date of the Original Indenture.
"Permitted Junior Securities" means, so long as the effect of any
exclusion employing this definition is not to cause the Securities to be treated
in any case or proceeding or similar event described in clauses (a), (b) or (c)
of Section 1202 as part of the same class of claims as the Senior Indebtedness
or any class or claims pari passu with, or senior to, the Senior Indebtedness,
for any payment or distribution, debt or equity securities of the Company or any
successor corporation provided for by a plan of reorganization or readjustment
that are subordinat ed at least to the same extent that the Securities are
subordinated to the payment of all Senior Indebtedness then outstanding;
provided that (1) if a new corporation results from such reorganization
- --------
or readjustment, such corporation assumes any Senior Indebtedness not paid in
full in cash or Cash Equivalents in connection with such reorganization or
readjustment and (2) the rights of the holders of such Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred stock whether now outstanding, or issued after the date
of the Original Indenture, and including, without limitation, all classes and
series of preferred or preference stock.
15
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
"QIB" means a "Qualified Institutional Buyer" under Rule 144A under
the Securities Act.
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms or by the terms of any security into which it is convertible or
exchangeable or otherwise, is or upon the happening of an event or passage of
time would be, required to be redeemed prior to any Stated Maturity of the
principal of the Securities or is redeemable at the option of the holder thereof
at any time prior to any such Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to any such Stated Maturity
at the option of the holder thereof.
"Redemption Date" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the date fixed for
such redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the price at which it
is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement dated the date hereof between the Company, the Guarantors and
the Initial Purchasers.
"Registration Statement" means any registration statement of the
Company which covers any of the Series B Securities or Series C Securities
pursuant to the provisions of the Registration Rights Agreement, and all
amendments and supplements to any such Registration Statement, including post-
effective amendments, in each case including the Prospectus contained therein,
all exhibits thereto and all material incorporated by reference therein.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the 15th day (whether or not a Business Day) next preceding such
Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office or the agent of the Trustee
appointed hereunder, including any vice president, assistant vice president,
assistant secretary, or any other officer or assistant officer of the Trustee or
the agent of the Trustee appointed hereunder to whom any corporate trust matter
is referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Payment" has the meaning specified in Section 1009.
16
"S&P" means Standard and Poor's Corporation or any successor rating
agency.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a Subsidiary sells or
transfers any property or asset in connection with the leasing, or the resale
against installment payments, of such property or asset to the seller or
transferor.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Guarantor Indebtedness" means the principal of, premium, if
any, and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy laws
whether or not allowable as a claim in such proceeding) on any Indebtedness of
any Guarantor (other than as otherwise provided in this definition), whether
outstanding on the date of the Original Indenture or thereafter created,
incurred or assumed, and whether at any time owing, actually or contingent,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to any
Guarantee. Without limiting the generality of the foregoing, "Senior Guarantor
Indebtedness" shall include the principal of, premium, if any, and interest
(including interest accruing after the filing of a petition initiating any
proceeding under any state, federal or foreign bankruptcy laws whether or not
allowable as a claim in such proceeding) and all other obligations of every
nature of any Guarantor from time to time owed to the lenders (or their agent)
under the Credit Agreement; provided, however, that any Indebtednes s under any
-------- -------
refinancing, refunding or replacement of the Credit Agreement shall not
constitute Senior Guarantor Indebtedness to the extent that the Indebtedness
thereunder is by its express terms subordinate to any other Indebtedness of any
Guarantor. Notwithstanding the foregoing, "Senior Guarantor Indebtedness" shall
not include (i) Indebtedness evidenced by the Guarantees, (ii) Indebtedness that
is subordinate or junior in right of payment to any Indebtedness of any
Guarantor, (iii) Indebtedness which when incurred and without respect to any
election under Section 1111(b) of Title 11 United States Code, is without
recourse to any Guarantor, (iv) Indebtedness which is represented by Redeemable
Capital Stock, (v) any liability for foreign, federal, state, local or other
taxes owed or owing by any Guarantor to the extent such liability constitutes
Indebtedness, (vi) Indebtedness of any Guarantor to a Subsidiary or any other
Affiliate of the Company or any of such Affiliate's subsidiaries, (vii) that
portion of any Indebtedness which at the time of issuance is issued in violation
of this Indenture and (viii) Indebtedness owed by any Guarantor for compensation
to employees or for services.
17
"Senior Indebtedness" means the principal of, premium, if any, and
interest (including interest accruing after the filing of a petition initiating
any proceeding under any state, federal or foreign bankruptcy law whether or not
allowable as a claim in such proceeding) on any Indebtedness of the Company
(other than as otherwise provided in this definition), whether outstanding on
the date of the Original Indenture or thereafter created, incurred or assumed,
and whether at any time owing, actually or contingent, unless, in the case of
any particular indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall include
(i) the principal of, premium, if any, and interest (including interest accruing
after the filing of a petition initiating any proceeding under any state,
federal or foreign bankruptcy laws whether or not allowable as a claim in such
proceeding) and all other obligations of every nature of the Company from time
to time owed to the lenders (or their agent) under the Credit Agreement;
provided, however, that any Indebtedness under any refinancing , refunding or
- -------- -------
replacemen t of the Credit Agreement shall not constitute Senior Indebtedness to
the extent that the Indebtedness thereunder is by its express terms subordinate
to any other Indebtedness of the Company, and (ii) Indebtedness under Interest
Rate Agreements. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (i) Indebtedness evidenced by the Securities, (ii) Indebtedness that is
subordinate or junior in right of payment to any Indebtedness of the Company,
(iii) Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11 United States Code, is without recourse to the
Company, (iv) Indebtedness which is represented by Redeemable Capital Stock, (v)
any liability for foreign, federal, state, local or other taxes owed or owing by
the Company to the extent such liability constitutes Indebtedness, (vi)
Indebtedness of the Company to a Subsidiary or any other Affiliate of the
Company or any of such Affiliate's subsidiaries, (vii) that portion of any
Indebtedness which at the time of issuance is issued in violation of this
Indenture and (viii) Indebtedness owed by the Company for compensation to
employees or for services.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company pursuant to Section 2 of the of the Registration Rights
Agreement, which covers all of the Transfer Restricted Securities (as defined in
the Registration Rights Agreement) on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the Commission,
and all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
18
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor subordinated in right of payment to the Securities or a Guarantee, as
the case may be.
"Subsidiary" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Temporary Cash Investments" means (i) any evidence of Indebtedness of
a Person, other than the Company or its Subsidiaries, maturing not more than one
year after the date of acquisition, issued by the United States of America, or
an instrumentality or agency thereof and guaranteed fully as to principal,
premium, if any, and interest by the United States of America, (ii) any
certificate of deposit, maturing not more than one year after the date of
acquisition, issued by, or time deposit of, a commercial banking institution
that is a member of the Federal Reserve System and that has combined capital and
surplus and undivided profits of not less than $500,000,000, whose debt has a
rating, at the time as of which any investment therein is made, of "P-1" (or
higher) according to Moody's Investors Service, Inc. ("Moody's") or any
successor rating agency or "A-1" (or higher) according to Standard and Poor's
Corporation ("S&P") or any successor rating agency, (iii) commercial paper,
maturing not more than one year after the date of acquisition, issued by a
corporation (other than an Affiliate or Subsidiary of the Company) organized and
existing under the laws of the United States of America with a rating, at the
time as of which any investment therein is made, of "P-1" (or higher) according
to Moody's or "A-1" (or higher) according to S&P and (iv) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $500,000,000.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trustee" means, except as set forth in Section 405 hereof, the Person
named as the "Trustee" in the first paragraph of this instrument, until a
successor trustee shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter "Trustee" shall mean such successor trustee.
"Voting Stock" means stock of the class or classes pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees of
a corporation (irrespective of whether or not at the time stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).
19
"Wholly Owned Subsidiary" means (i) a Subsidiary all the Capital Stock
of which is owned by the Company or another Wholly Owned Subsidiary and (ii)
Monarch Wine Company, Limited Partnership, so long as the Company owns directly
or indirectly at least 99% of the outstanding interests in such partnership and
is the general partner thereof .
Section 102. Other Definitions.
------------------
Defined in
Term Section
---- ----------
"Act" 105
"Change of Control Offer" 1016
"Change of Control Purchase Date" 1016
"Change of Control Purchase Notice" 1016
"Change of Control Purchase Price" 1016
"Series B Securities" Recitals
"Series C Securities" Recitals
"covenant defeasance" 403
"Defaulted Interest" 307
"defeasance" 402
"Defeasance Redemption Date" 404
"Defeased Securities" 401
"Deficiency" 1013
"Excess Proceeds" 1013
"incur" 1008
"Initial Blockage Period" 1203
"Offer" 1013
"Offer Date" 1013
"Offered Price" 1013
"Pari Passu Debt Amount" 1013
"Pari Passu Offer" 1013
"Payment Blockage Period" 1203
"Permitted Indebtedness" 1008
"Permitted Payment" 1009
"refinancing" 1008
"Required Filing Dates" 1019
"Security" or "Securities" Recitals
"Security Amount" 1013
"Senior Guarantor Representative" 1424
"Senior Representative" 1203
"Surviving Entity" 801
"U.S. Government Obligations" 404
20
Section 103. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company and any Guarantor
(if applicable) and any other obligor on the Securities (if applicable) shall
furnish to the Trustee an Officers' Certificate in a form and substance
reasonably acceptable to the Trustee stating that all conditions precedent, if
any, provided for in this Indenture (including any covenants compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with, and an Opinion of Counsel in a form and substance reasonably
acceptable to the Trustee stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents,
certificates or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
21
Any certificate or opinion of an officer of the Company, any Guarantor
or other obligor on the Securities may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer has actual knowledge that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company, any Guarantor or
other obligor on the Securities stating that the information with respect to
such factual matters is in the possession of the Company, any Guarantor or other
obligor on the Securities, unless such counsel has actual knowledge that the
certificate or opinion or representations with respect to such matters are
erroneous. Opinions of Counsel required to be delivered to the Trustee may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 105. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are received
by the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section. The fact and date of the execution by any
Person of any such instrument or writing may be proved in any reasonable manner
which the Trustee deems sufficient.
(b) The ownership of Securities shall be proved by the Security
Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security or the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, suffered or omitted to be
22
done by the Trustee, any Paying Agent or the Company or any Guarantor in
reliance thereon, whether or not notation of such action is made upon such
Security.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding Trust Indenture Act
Section 316(c), any such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not more than 30 days
prior to the first solicitation of Holders generally in connection therewith and
no later than the date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of the requisite proportion of Securities then Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the
Securities then Outstanding shall be computed as of such record date; provided
--------
that no such request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
Section 106. Notices, etc., to the Trustee, the Company and any
--------------------------------------------------
Guarantor.
- ---------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or
any other obligor on the Securities or a Senior Representative or holder of
Senior Indebtedness shall be sufficient for every purpose hereunder if in
writing and mailed, first-class postage prepaid, or delivered by recognized
overnight courier, to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Department, or at any other address previously
furnished in writing to the Holders, the Company, any Guarantor or any other
obligor on the Securities or a Senior Representative or holder of Senior
Indebtedness by the Trustee; or
(b) the Company or any Guarantor by the Trustee or any Holder shall be
sufficient for every purpose (except as provided in Section 501(c)) hereunder if
in writing and mailed, first-class postage prepaid, or delivered by recognized
overnight courier, to
23
the Company or such Guarantor addressed to it at Canandaigua Wine Company, Inc.,
116 Buffalo Street, Canandaigua, New York 14424, Attention: General Counsel, or
at any other address previously furnished in writing to the Trustee by the
Company.
Section 107. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice when mailed to a Holder in the aforesaid manner shall
be conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Section 109. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
24
Section 110. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent, the Holders, the holders of Senior Indebtedness and
the holders of Guarantor Senior Indebtedness) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 113. GOVERNING LAW.
-------------
THIS INDENTURE, THE SECURITIES AND ANY GUARANTEE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF).
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, Maturity
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or Redemption Date or at the,
Maturity or Stated Maturity and no interest shall accrue with respect to such
payment for the period from and after such Interest Payment Date, Redemption
Date, Maturity or Stated Maturity, as the case may be, to the next succeeding
Business Day.
Section 115. Schedules and Exhibits.
----------------------
All schedules and exhibits attached hereto are by this reference made
a part hereof with the same effect as if herein set forth in full.
25
Section 116. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
---------------
The Securities and the Trustee's certificate of authentication thereon
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by the Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange, any
organizational document or governing instrument or applicable law or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
Initial Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Securities
substantially in the form set forth in Section 202 (the "U.S. Global Security")
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold inside the United States to an
institutional investor within the meaning of subparagraphs (a)(1), (a)(2),
(a)(3) or (a)(7) of Rule 501 under the Securities Act shall be issued in
certificated form substantially in the form set forth in Section 202 (the "U.S.
Physical Securities").
Initial Securities offered and sold in reliance on Regulation S shall
be issued initially in
26
the form of temporary certificated Securities in registered form substantially
in the form set forth in Section 202 (the "Temporary Offshore Physical
Securities"). The Temporary Offshore Physical Securities will be registered in
the name of, and held by, a temporary certificate holder designated by the
Initial Purchasers until the later of the completion of the distribution of the
Initial Securities and the termination of the "restricted period" (as defined in
Regulation S) with respect to the offer and sale of the Initial Securities (the
"Offshore Securities Exchange Date"). At any time following the Offshore
Securities Exchange Date, upon receipt by the Trustee and the Company of a
certificate substantially in the form of Exhibit B hereto, the Company shall
execute, and the Trustee shall authenticate and deliver, one or more permanent
certificated Securities in registered form substantially in the form set forth
in Section 202 (the "Permanent Offshore Physical Securities"), in exchange for
the surrender of Temporary Offshore Physical Securities of like tenor and
amount.
Section 202. Form of Face of Security.
------------------------
(a) The form of the face of Series B Securities shall be substantially
as follows:
Unless and until (i) an Initial Security is sold under an effective
Registration Statement or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, then (A) the U.S. Global Security
and each U.S. Physical Security shall bear the legend set forth below (the
"Private Placement Legend") on the face thereof and (B) the Temporary Offshore
Physical Securities shall bear the Private Placement Legend on the face thereof
until at least 41 days after the Issue Date and receipt by the Company and the
Trustee of a certificate substantially in the form as set forth in Exhibit B:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AS
SET FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A")) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE
27
SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A INSIDE THE UNITED STATES, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) OUTSIDE THE
UNITED STATES PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN AN
OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1),
(a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E)
OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
28
AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. AS USED
HEREIN, THE TERMS "UNITED STATES," "OFFSHORE TRANSACTION," AND "U.S.
PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
[Legend if Security is a Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT
IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
29
CANANDAIGUA WINE COMPANY, INC.
-----------------
8 3/4% SERIES B SENIOR SUBORDINATED NOTE DUE 2003
CUSIP NO.____________
No. __________ $____________
CANANDAIGUA WINE COMPANY, INC., a Delaware corporation (herein called
the "Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________ or registered assigns, the principal sum of _______________ United
States dollars on December 15, 2003, at the office or agency of the Company
referred to below, and to pay interest thereon from October 29, 1996, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on June 15 and December 15, in each year, commencing
December 15, 1996 at the rate of 8 3/4% per annum, in United States dollars,
until the principal hereof is paid or duly provided for.
The Holder of this Series B Security is entitled to the benefits of
the Exchange and Registration Rights Agreement dated October 29, 1996 among the
Company, the Guarantors and the Initial Purchasers (the "Registration Rights
Agreement"), pursuant to which, subject to the terms and conditions thereof, the
Company is obligated to consummate the Exchange Offer pursuant to which the
Holder of this Security shall have the right to exchange this Security for 8
3/4% Series C Senior Subordinated Notes due 2003 (the "Series C Securities") in
like principal amount as provided therein. The Series B Securities and the
Series C Securities are together referred to as the "Securities."
In the event that (i) the applicable Registration Statement is not
filed with the Commission on or prior to 45 days after the Closing Date, (ii)
the Exchange Offer Registration Statement or, as the case may be, the Shelf
Registration Statement, is not declared effective within 105 days after the
Closing Date, (iii) the Exchange Offer is not consummated on or prior to 135
days after the Closing Date, or (iv) the Shelf Registration Statement is filed
and declared effective within 105 days after the Closing Date but shall
thereafter cease to be effective (at any time that the Company and the
Guarantors are obligated to maintain the effectiveness thereof) without being
succeeded within 30 days by an additional Registration Statement filed and
declared effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Company will pay liquidated damages to each holder
of Transfer Restricted Securities (as defined below) in an amount equal to
$0.192 per week per $1,000 principal amount of the Securities constituting
Transfer Restricted Securities held by such holder until (i) the applicable
Registration Statement is filed, (ii) the Exchange Registration Statement is
30
declared effective and the Exchange Offer is consummated, (iii) the Shelf
Registration Statement is declared effective or (iv) the Shelf Registration
Statement again becomes effective, as the case may be. Following the cure of
all Registration Defaults, the accrual of liquidated damages will cease.
"Transfer Restricted Securities" means each Series B Security until (i) the date
on which such Series B Security has been exchanged for a freely transferable
Series C Security in the Exchange Offer, (ii) the date on which such Series B
Security has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement or (iii) the date on
which such Series B Security is distributed to the public pursuant to Rule 144
under the Securities Act or is saleable pursuant to Rule 144(k) under the
Securities Act. Notwithstanding anything to the contrary in this Section 3(a),
the Company shall not be required to pay liquidated damages to the holder of
Transfer Restricted Securities if such holder failed to comply with its
obligations to the Company pursuant to the Registration Rights Agreement.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be June 1 or December 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Securities, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose, 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; provided,
--------
however, that payment of interest may be made at the option of the Company, (i)
- -------
in the case of a Global Security, by wire or book entry transfer to the
Depository Trust Company or its nominee, or (ii) in all other cases, by check
mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
31
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Security is entitled to the benefits of Guarantees by each of the
Guarantors of the punctual payment when due of the Indenture Obligations made in
favor of the Trustee for the benefit of the Holders. Reference is hereby made
to Article Fourteen of the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations under the Guarantees of each of
the Guarantors.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
Dated: CANANDAIGUA WINE COMPANY, INC.
By:
---------------------------
Attest:
- ------------------------
Authorized Officer
(b) The form of the face of Series C Securities shall be substantially
as follows:
[Legend if Security is a Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT
IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS
32
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 306 AND 307 OF
THE INDENTURE .
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CANANDAIGUA WINE COMPANY, INC.
-----------------
8 3/4% SERIES C SENIOR SUBORDINATED NOTE DUE 2003
CUSIP NO.____________
No. __________ $____________
CANANDAIGUA WINE COMPANY, INC., a Delaware corporation (herein called
the "Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________ or registered assigns, the principal sum of _______________ United
States dollars on December 15, 2003, at the office or agency of the Company
referred to below, and to pay interest thereon from ______ __, 1996, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on June 15 and December 15, in each year, commencing
December 15, 1996 at the rate of 8 3/4% per annum, in United States dollars,
until the principal hereof is paid or duly provided for; provided that to the
extent interest has not been paid or duly provided for with respect to the
Series B Security exchanged for this Series C Security, interest on this Series
C Security shall accrue from the most recent Interest Payment Date to which
interest on the Series B Security which
33
was exchanged for this Series C Security has been paid or duly provided for.
Interest shall be computed on the basis of a 360-day year comprised of twelve
30-day months..
This Series C Security was issued pursuant to the Exchange Offer
pursuant to which the 8 3/4% Series B Senior Subordinated Notes due 2003 (herein
called the "Series B Securities") in like principal amount were exchanged for
the Series C Securities. The Series C Securities rank pari passu in right of
payment with the Series B Securities.
In addition, for any period in which the Series B Security exchanged
for this Series C Security was outstanding, in the event that (i) the applicable
Registration Statement is not filed with the Commission on or prior to 45 days
after the Closing Date, (ii) the Exchange Offer Registration Statement or, as
the case may be, the Shelf Registration Statement, is not declared effective
within 105 days after the Closing Date, (iii) the Exchange Offer is not
consummated on or prior to 135 days after the Closing Date, or (iv) the Shelf
Registration Statement is filed and declared effective within 105 days after the
Closing Date but shall thereafter cease to be effective (at any time that the
Company and the Guarantors are obligated to maintain the effectiveness thereof)
without being succeeded within 30 days by an additional Registration Statement
filed and declared effective (each such event referred to in clauses (i) through
(iv), a "Registration Default"), the Company will pay liquidated damages to each
holder of Transfer Restricted Securities (as defined below) in an amount equal
to $0.192 per week per $1,000 principal amount of the Securities constituting
Transfer Restricted Securities held by such holder until (i) the applicable
Registration Statement is filed, (ii) the Exchange Registration Statement is
declared effective and the Exchange Offer is consummated, (iii) the Shelf
Registration statement is declared effective or (iv) the Shelf Registration
Statement again becomes effective, as the case may be. Following the cure of
all Registration Defaults, the accrual of liquidated damages will cease.
"Transfer Restricted Securities" means each Class B Security until (i) the date
on which such Class B Security has been exchanged for a freely transferable
Class C Security in the Exchange Offer, (ii) the date on which such Class B
Security has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement or (iii) the date on
which such Class B Security is distributed to the public pursuant to Rule 144
under the Securities Act or is salable pursuant to Rule 144(k) under the
Securities Act. Notwithstanding anything to the contrary in this Section 3(a),
the Company shall not be required to pay liquidated damages to the holder of
Transfer Restricted Securities if such holder failed to comply with its
obligations to the Company pursuant to the Registration Rights Agreement.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be June 1 or December
34
1 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid, or duly
provided for, and interest on such defaulted interest at the interest rate borne
by the Series C Securities, to the extent lawful, shall forthwith cease to be
payable to the Holder on such Regular Record Date, and may be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose, 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; provided,
--------
however, that payment of interest may be made at the option of the Company, (i)
- -------
in the case of a Global Security, by wire or book entry transfer to the
Depository Trust Company or its nominee, or (ii) in all other cases, by check
mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Security is entitled to the benefits of Guarantees by each of the
Guarantors of the punctual payment when due of the Indenture Obligations made in
favor of the Trustee for the benefit of the Holders. Reference is hereby made
to Article Fourteen of the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations under the Guarantees of each of
the Guarantors.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
35
Dated: CANANDAIGUA WINE COMPANY, INC.
By:__________________________________
Attest:
- --------------------
Authorized Officer
Section 203. Form of Reverse of Securities.
-----------------------------
(a) The form of the reverse of the Series B Securities shall be
substantially as follows:
This Security is one of a duly authorized issue of Securities of the
Company designated as its 8 3/4% Series B Senior Subordinated Notes due 2003
(herein called the "Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $65,000,000,
issued under an indenture (herein called the "Indenture") dated as of October
29, 1996, among the Company, the Guarantors and Harris Trust and Savings Bank,
as trustee (herein called the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Guarantors, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Securities or (b) certain restrictive covenants
and related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Indebtedness evidenced by the Securities is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture), whether Outstanding on the date of the Indenture or thereafter,
and this Security is issued subject to such provisions. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee his attorney-in-fact for
such purpose; provided, however, that, subject to Section 406 of the Indenture,
-------- -------
the Indebtedness evidenced by this Security shall cease to be so subordinate and
subject in
36
right of payment upon any defeasance of this Security referred to in clause (a)
or (b) of the preceding paragraph.
The Securities are subject to redemption at any time on or after
December 15, 1998, at the option of the Company, in whole or in part, on not
less than 30 nor more than 60 days' prior notice by first-class mail in amounts
of $1,000 or an integral multiple of $1,000 at the following redemption prices
(expressed as a percentage of the principal amount), redeemed during the 12-
month period beginning December 15 of the years indicated below:
Redemption
Year Price
---- ----------
1998.................................................. 104.375%
1999.................................................. 102.917%
2000.................................................. 101.458%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of Holders of record on Regular Record Dates to receive interest due on an
Interest Payment Date). If less than all of the Securities are to be redeemed,
the Trustee shall select the Securities or portions thereof to be redeemed pro
rata, by lot or by any other method the Trustee shall deem fair and reasonable.
Notwithstanding the preceding paragraph, the Company will not be
permitted to redeem the Original Securities unless, substantially concurrently
with such redemption, the Company redeems an aggregate principal amount of
Securities (rounded to the nearest integral multiple of $1,000) equal to the
product of (a) a fraction, the numerator of which is the aggregate principal
amount of Original Securities to be so redeemed and the denominator of which is
the aggregate principal amount of Original Securities outstanding immediately
prior to such proposed redemption, and (b) the aggregate principal amount of
Securities outstanding immediately prior to such proposed redemption.
Upon the occurrence of a Change of Control, each Holder may require
the Company to repurchase all or a portion of such Holder's Securities in an
amount of $1,000 or integral multiples of $1,000, at a purchase price in cash
equal to 101% of the principal amount thereof, together with accrued and unpaid
interest, if any, to the date of repurchase.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company from any Asset Sale, which proceeds are not used to
prepay Senior Indebtedness or invested in properties or assets used in the
businesses of the Company or reasonably related thereto, exceeds a specified
amount the Company will be required to
37
apply such proceeds to the repayment of the Securities and certain indebtedness
ranking pari passu to the Securities.
In the case of any redemption or repurchase of Securities in
accordance with the Indenture, interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular Record
Date referred to on the face hereof. Securities (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the date of redemption.
In the event of redemption or repurchase of this Security in
accordance with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Guarantors and the Holders under the Indenture and
the Securities and the Guarantees at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities at the time Outstanding. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and the Securities and the
Guarantees and certain past Defaults under the Indenture and the Securities and
the Guarantees and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Securities (in the event such Guarantor or
other obligor is obligated to make payments in respect of the Securities), which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed, subject to the subordination provisions of the
Indenture.
38
If this Series B Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the transfer
of this Security is registrable on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office or agency
of the Company maintained for such purpose in The City of New York or at such
other office or agency of the Company as may be maintained for such purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
If this Series B Security is a Restricted Security in certificated
form, then as provided in the Indenture and subject to certain limitations
therein set forth, the Holder, provided it is a Qualified Institutional Buyer,
may exchange this Series B Security for a Book-Entry Security by instructing the
Trustee (by completing the Transferee Certificate in the form in Appendix II) to
arrange for such Series B Security to be represented by a beneficial interest in
a Global Security in accordance with the customary procedures of the Depository,
unless the Company has elected not to issue a Global Security.
If this Series B Security is a U.S. Global Security, it is
exchangeable for a Series B Security in certificated form as provided in the
Indenture and in accordance with the rules and procedures of the Trustee and the
Depositary. In addition, certificated securities shall be transferred to all
beneficial holders in exchange for their beneficial interests in the U.S. Global
Securities if (x) the Depository notifies the Company that it is unwilling or
unable to continue as depository for the U.S. Global Security and a successor
depository is not appointed by the Company within 90 days or (y) there shall
have occurred and be continuing an Event of Default and the Security Registrar
has received a request from the Depositary. Upon any such issuance, the Trustee
is required to register such certificated Series B Securities in the name of,
and cause the same to be delivered to, such Person or Persons (or the nominee of
any thereof). All such certificated Series B Securities would be required to
include the Private Placement Legend.
The Series B Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder
surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Series B Security,
the Company will promptly furnish or cause to be furnished such information as
is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) to such Holder or to a prospective purchaser of
such Series B Security who such Holder informs the Company is reasonably
believed to be a "Qualified Institutional Buyer" within the
39
meaning of Rule 144A under the Securities Act, as the case may be, in order to
permit compliance by such Holder with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to and at the time of due presentment of this Security for
registration of transfer, the Company, any Guarantor, the Trustee and any agent
of the Company, any Guarantor or the Trustee may treat the Person in whose name
this Security is registered as the owner hereof for all purposes, whether or not
this Security is overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[The Transfer Notice, in the form of Appendix I hereto, will be
attached to the Series B Security.]
(b) The form of the reverse of the Series C Securities shall be
substantially as follows:
This Security is one of a duly authorized issue of Securities of the
Company designated as its 8 3/4% Series C Senior Subordinated Notes due 2003
(herein called the "Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $65,000,000,
issued under an indenture (herein called the "Indenture") dated as of October
29, 1996, among the Company, the Guarantors and Harris Trust and Savings Bank,
as trustee (herein called the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Guarantors, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Securities or (b) certain restrictive covenants
and related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Indebtedness evidenced by the Securities is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior
40
payment in full of all Senior Indebtedness (as defined in the Indenture),
whether Outstanding on the date of the Indenture or thereafter, and this
Security is issued subject to such provisions. Each Holder of this Security, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee his attorney-in-fact for such purpose;
provided, however, that, subject to Section 406 of the Indenture, the
-------- -------
Indebtedness evidenced by this Security shall cease to be so subordinate and
subject in right of payment upon any defeasance of this Security referred to in
clause (a) or (b) of the preceding paragraph.
The Securities are subject to redemption at any time on or after
December 15, 1998, at the option of the Company, in whole or in part, on not
less than 30 nor more than 60 days' prior notice by first-class mail in amounts
of $1,000 or an integral multiple of $1,000 at the following redemption prices
(expressed as a percentage of the principal amount), redeemed during the 12-
month period beginning December 15 of the years indicated below:
Redemption
Year Price
---- ----------
1998.................................................. 104.375%
1999.................................................. 102.917%
2000.................................................. 101.458%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of Holders of record on Regular Record Dates to receive interest due on an
Interest Payment Date). If less than all of the Securities are to be redeemed,
the Trustee shall select the Securities or portions thereof to be redeemed pro
rata, by lot or by any other method the Trustee shall deem fair and reasonable.
Notwithstanding the preceding paragraph, the Company will not be
permitted to redeem the Original Securities unless, substantially concurrently
with such redemption, the Company redeems an aggregate principal amount of
Securities (rounded to the nearest integral multiple of $1,000) equal to the
product of (a) a fraction, the numerator of which is the aggregate principal
amount of Original Securities to be so redeemed and the denominator of which is
the aggregate principal amount of Original Securities outstanding immediately
prior to such proposed redemption, and (b) the aggregate principal amount of
Securities outstanding immediately prior to such proposed transaction.
41
Upon the occurrence of a Change of Control, each Holder may require
the Company to repurchase all or a portion of such Holder's Securities in an
amount of $1,000 or integral multiples of $1,000, at a purchase price in cash
equal to 101% of the principal amount thereof, together with accrued and unpaid
interest, if any, to the date of repurchase.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company from any Asset Sale, which proceeds are not used to
prepay Senior Indebtedness or invested in properties or assets used in the
businesses of the Company or reasonably related thereto, exceeds a specified
amount the Company will be required to apply such proceeds to the repayment of
the Securities and certain indebtedness ranking pari passu to the Securities.
In the case of any redemption or repurchase of Securities in
accordance with the Indenture, interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular Record
Date referred to on the face hereof. Securities (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the date of redemption.
In the event of redemption or repurchase of this Security in
accordance with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Guarantors and the Holders under the Indenture and
the Securities and the Guarantees at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Securities at the time Outstanding. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and the Securities and the
Guarantees and certain past Defaults under the Indenture and the Securities and
the Guarantees and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer
42
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Securities (in the event such Guarantor or
other obligor is obligated to make payments in respect of the Securities), which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed, subject to the subordination provisions of the
Indenture.
If this Series C Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the transfer
of this Series C Security is registrable on the Security Register of the
Company, upon surrender of this Series C Security for registration of transfer
at the office or agency of the Company maintained for such purpose in The City
of New York or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or its attorney duly authorized in
writing, and thereupon one or more new Series C Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Series C Security is a U.S. Global Security, it is
exchangeable for a Series C Security in certificated form as provided in the
Indenture and in accordance with the rules and procedures of the Trustee and the
Depositary. In addition, certificated securities shall be transferred to all
beneficial holders in exchange for their beneficial interests in the U.S. Global
Security if (x) the Depository notifies the Company that it is unwilling or
unable to continue as depository for the U.S. Global Security and a successor
depository is not appointed by the Company within 90 days or (y) there shall
have occurred and be continuing an Event of Default and the Security Registrar
has received a request from the Depositary. Upon any such issuance, the Trustee
is required to register such certificated Series C Securities in the name of,
and cause the same to be delivered to, such Person or Persons (or the nominee of
any thereof).
The Series C Securities in certificated form are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Series B Securities are exchangeable for a
like aggregate principal amount of Securities of a differing authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
43
Prior to and at the time of due presentment of this Security for
registration of transfer, the Company, any Guarantor, the Trustee and any agent
of the Company, any Guarantor or the Trustee may treat the Person in whose name
this Security is registered as the owner hereof for all purposes, whether or not
this Security is overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[The Transfer Notice, in the form of Appendix II hereto, will be
attached to the Series B Security.]
Section 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
[Series B Securities]
This is one of the 8 3/4% Series B Senior Subordinated Notes due 2003
referred to in the within-mentioned Indenture.
As Trustee, Harris Trust and Savings Bank
By:
-------------------------------------
Authorized Officer
[Series C Securities]
This is one of the 8 3/4% Series C Senior Subordinated Notes due 2003
referred to in the within-mentioned Indenture.
As Trustee, Harris Trust and Savings Bank
By:
-------------------------------------
Authorized Officer
44
Section 205. Form of Guarantee of Each of the Guarantors.
-------------------------------------------
The form of Guarantee shall be set forth on the Securities
substantially as follows:
GUARANTEES
For value received, each of the undersigned hereby unconditionally
guarantees, jointly and severally, to the holder of this Security the payment of
principal of, premium, if any, and interest on this Security upon which these
Guarantees are endorsed in the amounts and at the time when due and payable
whether by declaration thereof, or otherwise, and interest on the overdue
principal and interest, if any, of this Security, if lawful, and the payment or
performance of all other obligations of the Company under the Indenture or the
Securities, to the holder of this Security and the Trustee, all in accordance
with and subject to the terms and limitations of this Security and Article
Fourteen of the Indenture. These Guarantees will not become effective until the
Trustee duly executes the certificate of authentication on this Security.
The Indebtedness evidenced by these Guarantees are, to the extent and
in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Guarantor Indebtedness (as
defined in the Indenture), whether Outstanding on the date of the Indenture or
thereafter, and these Guarantees are issued subject to such provisions.
45
Dated:
BATAVIA WINE CELLARS, INC.
Attest: By
------------------ -------------------------------
Authorized Officer
BISCEGLIA BROTHERS WINE CO.
Attest: By
------------------ -------------------------------
Authorized Officer
CALIFORNIA PRODUCTS COMPANY
Attest: By
------------------ -------------------------------
Authorized Officer
GUILD WINERIES & DISTILLERIES,
INC.
Attest: By
------------------ -------------------------------
Authorized Officer
TENNER BROTHERS, INC.
Attest: By
------------------ -------------------------------
Authorized Officer
WIDMER'S WINE CELLARS, INC.
Attest: By
------------------ -------------------------------
Authorized Officer
46
BARTON INCORPORATED
Attest: By
------------------ -------------------------------
Authorized Officer
BARTON BRANDS, LTD.
Attest: By
------------------ -------------------------------
Authorized Officer
BARTON BEERS, LTD.
Attest: By
------------------ -------------------------------
Authorized Officer
BARTON BRANDS OF CALIFORNIA,
INC.
Attest: By
------------------ -------------------------------
Authorized Officer
BARTON BRANDS OF GEORGIA, INC.
Attest: By
------------------ -------------------------------
Authorized Officer
BARTON DISTILLERS IMPORT CORP.
Attest: By
------------------ -------------------------------
Authorized Officer
THE VIKING DISTILLERY, INC.
Attest: By
------------------ -------------------------------
Authorized Officer
47
BARTON FINANCIAL CORPORATION
Attest: By
------------------ -------------------------------
Authorized Officer
STEVENS POINT BEVERAGE CO.
Attest: By
------------------ -------------------------------
Authorized Officer
MONARCH WINE COMPANY,
LIMITED PARTNERSHIP
By: BARTON MANAGEMENT, INC.,
as corporate general
partner
Attest: By
------------------ -------------------------------
Authorized Officer
BARTON MANAGEMENT, INC.
Attest: By
------------------ -------------------------------
Authorized Officer
VINTNERS INTERNATIONAL
COMPANY, INC.
Attest: By
------------------ -------------------------------
Authorized Officer
CANANDAIGUA WEST, INC.
Attest: By
------------------ -------------------------------
Authorized Officer
48
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
---------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $65,000,000 in
principal amount of Series B Securities and $65,000,000 principal amount of
Series C Securities, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 303, 304, 305, 306, 307, 308, 906, 1013, 1016 or 1108.
The Series B Securities shall be known and designated as the "8 3/4%
Series B Senior Subordinated Notes due 2003" of the Company. The Stated
Maturity of the Series B Securities shall be December 15, 2003, and the Series B
Securities shall each bear interest at the rate of 8 3/4% per annum, as such
interest rate may be adjusted as set forth in the Series B Security, from
October 29, 1996 or from the most recent Interest Payment Date to which interest
has been paid, as the case may be, payable on December 15, 1996 and semi-
annually thereafter on June 15 and December 15, in each year, until the
principal thereof is paid or duly provided for. Interest on any overdue
principal, interest (to the extent lawful) or premium, if any, shall be payable
on demand.
The Series C Securities shall be known and designated as the "8 3/4%
Series C Senior Subordinated Notes due 2003" of the Company. The Stated
Maturity of the Series C Securities shall be December 15, 2003, and the Series C
Securities shall each bear interest at the rate of 8 3/4% per annum, as such
interest rate may be adjusted as set forth in the Series C Security, from their
issuance date or from the most recent Interest Payment Date to which interest
has been paid, as the case may be, payable on December 15, 1996 and semi-
annually thereafter on June 15 and December 15, in each year, until the
principal thereof is paid or duly provided for. Interest on any overdue
principal, interest (to the extent lawful) or premium, if any, shall be payable
on demand.
The principal of, premium, if any, and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose; provided, however, that at the option of the Company interest may be
-------- -------
paid by check mailed to addresses of the Persons entitled thereto as such
addresses shall appear on the Security Register.
For all purposes hereunder, the Series B Securities and the Series C
Securities will be treated as one class and are together referred to as the
"Securities." The Series B Securities rank pari passu in right of payment with
the Series C Securities.
The Securities shall be redeemable as provided in Article Eleven and
in the Securities.
49
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve.
Section 302. Denominations.
-------------
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by one of
its Chairman of the Board, its President, its Chief Executive Officer, its Chief
Operating Officer, its Chief Financial Officer or one of its Vice Presidents and
attested by an authorized officer.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee with Guarantees endorsed thereon for authentication, together with a
Company Order for the authentication and delivery of such Securities; and the
Trustee in accordance with such Company Order shall authenticate and deliver
such Securities as provided in this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security or Guarantee endorsed thereon shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein duly executed by the Trustee by manual signature of
an authorized officer, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.
In case the Company or any Guarantor, pursuant to Article Eight, shall
be consolidated, merged with or into any other Person or shall sell, assign,
convey, transfer or lease substantially all of its properties and assets to any
Person, and the successor Person resulting from such consolidation or surviving
such merger, or into which the
50
Company or such Guarantor shall have been merged, or the Person which shall have
participated in the sale, assignment, conveyance, transfer or lease as
aforesaid, shall have executed an indenture supplemental hereto with the Trustee
pursuant to Article Eight, any of the Securities authenticated or delivered
prior to such consolidation, merger, sale, assignment, conveyance, transfer or
lease may, from time to time, at the request of the successor Person, be
exchanged for other Securities executed in the name of the successor Person with
such changes in phraseology and form as may be appropriate, but otherwise in
substance of like tenor as the Securities surrendered for such exchange and of
like principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Securities as specified in such request
for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities on behalf of the Trustee. Unless
limited by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any Security Registrar or
Paying Agent to deal with the Company and its Affiliates.
If an officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates such Security such Security shall
be valid nevertheless.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.
After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of the
temporary Securities at the office or agency of the Company designated for such
purpose pursuant to Section 1002, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of authorized denominations.
Until so exchanged the temporary Securities shall in all respects be entitled to
the same benefits under this Indenture as definitive Securities.
51
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall direct the Trustee to keep, so long as it is the
Security Registrar, at the Corporate Trust Office of the Trustee, or such other
office as the Trustee may designate, a register (the register maintained in such
office or in any other office or agency designated pursuant to Section 1002
being herein sometimes referred to as the "Security Register") in which, subject
to such reasonable regulations as the Security Registrar may prescribe, the
Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee shall initially be the "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 1002, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized denomination or denominations, of a like aggregate
principal amount.
Furthermore, any Holder of the U.S. Global Security shall, by
acceptance of such Global Security, agree that transfers of beneficial interest
in such Global Security may be effected only through a book-entry system
maintained by the Holder of such Global Security (or its agent), and that
ownership of a beneficial interest in the Security shall be required to be
reflected in a book entry.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities of the same series which the Holder making the exchange is entitled
to receive; provided that no exchange of Series B Securities for Series C
Securities shall occur until an Exchange Offer Registration Statement shall have
been declared effective by the Commission and that the Series B Securities
exchanged for the Series C Securities shall be cancelled.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer,
or for exchange or redemption shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing.
52
No service charge shall be made to a Holder for any registration of
transfer or exchange or redemption of Securities, but the Company may require
payment of a sum sufficient to pay all documentary, stamp or similar issue or
transfer taxes or other governmental charges that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 303, 304, 305, 306, 307, 308, 906, 1013, 1016 or
1108 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the mailing of a notice of redemption of the Securities selected
for redemption under Section 1104 and ending at the close of business on the day
of such mailing, or (b) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
Securities being redeemed in part.
Every Restricted Security shall be subject to the restrictions on
transfer provided in the legend required to be set forth on the face of each
Restricted Security pursuant to Section 202, and the restrictions set forth in
this Section 305, and the Holder of each Restricted Security, by such Holder's
acceptance thereof (or interest therein), agrees to be bound by such
restrictions on transfer.
The restrictions imposed by this Section 305 upon the transferability
of any particular Restricted Security shall cease and terminate on (a) the later
of three years from their date of issuance or three years after the last date on
which the Company or any Affiliate of the Company was the owner of such
Restricted Security (or any predecessor of such Restricted Security) or (b) (if
earlier) if and when such Restricted Security has been sold pursuant to an
effective registration statement under the Securities Act or transferred
pursuant to Rule 144 or Rule 904 under the Securities Act (or any successor
provision), unless the Holder thereof is an affiliate of the Company within the
meaning of Rule 144 (or such successor provisions). Any Restricted Security as
to which such restrictions on transfer shall have expired in accordance with
their terms or shall have terminated may, upon surrender of such Restricted
Security for exchange to the Security Registrar in accordance with the provision
of this Section 305 (accompanied, in the event that such restrictions on
transfer have terminated pursuant to Rule 144 or Rule 904 (or any successor
provision), by an Opinion of Counsel satisfactory to the Company and the
Trustee, to the effect that the transfer of such Restricted Security has been
made in compliance with Rule 144 or Rule 904 (or any such successor provision)),
be exchanged for a new Security, of like tenor and aggregate principal amount,
which shall not bear the Private Placement Legend. The Company shall inform the
Trustee of the effective date of any Registration Statement registering the
Securities under the Securities Act no later than two Business Days after such
effective date.
Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any U.S. Global Security, whether pursuant to this Section,
Section 304, 308, 906 or 1108
53
or otherwise, shall also be a U.S. Global Security and bear the legend specified
in Section 202.
Section 306. Book-Entry Provisions for U.S. Global Security.
----------------------------------------------
(a) The U.S. Global Security initially shall (i) be registered in the
name of the Depositary for such Global Security or the nominee of such
Depositary, (ii) be deposited with, or on behalf of, the Depositary or with the
Trustee as custodian for such Depositary and (iii) bear legends as set forth in
Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any U.S. Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the U.S. Global Security, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such U.S. Global Security for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or shall
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of any
Security.
(b) Transfers of the U.S. Global Security shall be limited to
transfers of such U.S. Global Security in whole, but not in part, to the
Depositary, its successors or their respective nominees. Interests of
beneficial owners in the U.S. Global Security may be transferred in accordance
with the rules and procedures of the Depositary and the provisions of Section
307. Beneficial owners may obtain U.S. Physical Securities in exchange for
their beneficial interests in the U.S. Global Security upon request in
accordance with the Depositary's and the Security Registrar's procedures. In
connection with the execution, authentication and delivery of such Physical
Securities, the Security Registrar shall reflect on its books and records a
decrease in the principal amount of the relevant Global Security equal to the
principal amount of such Physical Securities and the Company shall execute and
the Trustee shall authenticate and deliver one or more Physical Securities
having an equal aggregate principal amount. In addition, U.S. Physical
Securities and Offshore Physical Securities shall be issued to all beneficial
owners in exchange for their beneficial interests in the U.S. Global Security or
the Offshore Global Security, respectively if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the U.S.
Global Security or the Offshore Global Security and a successor Depositary is
not appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Security Registrar has received a
request from the Depositary.
(c) In connection with any transfer of a portion of the beneficial
interest in the U.S. Global Security pursuant to subsection (b) of this Section
to beneficial owners who are required to hold U.S. Physical Securities, the
Security Registrar shall reflect on
54
its books and records the date and a decrease in the principal amount of the
U.S. Global Security in an amount equal to the principal amount of the
beneficial interest in the U.S. Global Security to be transferred, and the
Company shall execute, and the Trustee shall authenticate and deliver, one or
more U.S. Physical Securities of like tenor and amount.
(d) In connection with the transfer of the entire U.S. Global
Security or Offshore Global Security to beneficial owners pursuant to subsection
(b) of this Section, the U.S. Global Security or Offshore Global Security, as
the case may be, shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial owner identified by the Depositary in exchange for its
beneficial interest in the U.S. Global Security or Offshore Global Security, as
the case may be, an equal aggregate principal amount of U.S. Physical Securities
or Offshore Physical Security, as the case may be, of authorized denominations.
(e) Any U.S. Physical Security delivered in exchange for an interest
in U.S. Global Securities pursuant to subsection (c) or subsection (d) of this
Section shall, except as otherwise provided by paragraph (a)(i)(x) and paragraph
(f) of Section 307, bear the Private Placement Legend.
(f) The registered holder of the U.S. Global Security may grant
proxies and otherwise authorize any person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
Section 307. Special Transfer Provisions.
---------------------------
Unless and until (i) an Initial Security is sold under an effective
Registration Statement, or (ii) an Initial Security is exchanged for a Series C
Security in connection with the Exchange Offer, in each case pursuant to the
Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
-------------------------------------------------------
following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Security to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) which is not a QIB (excluding Non-U.S. Persons):
(i) The Security Registrar shall register the transfer of any
Initial Security whether or not such Initial Security bears the
Private Placement Legend, if (x) the requested transfer is at least
three years after the original issue date of the Initial Securities or
(y) the proposed transferee has delivered to the Security Registrar a
certificate substantially in the form of Exhibit C hereto.
55
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Security Registrar of (x) the documents, if any, required by paragraph
(i) and (y) instructions given in accordance with the Depositary's and
the Security Registrar's procedures therefor, the Security Registrar
shall reflect on its books and records the date and a decrease in the
principal amount of the U.S. Global Security in an amount equal to the
principal amount of the beneficial interest in the U.S. Global
Security transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more U.S. Physical Certificates
of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of an Initial Security to a
QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of U.S. Physical
Securities, Temporary Offshore Physical Securities or Permanent
Offshore Physical Securities, the Security Registrar shall register
the transfer if such transfer is being made by a proposed transferor
who has checked the box provided for on the form of Initial Security
stating, or has otherwise advised the Company and the Security
Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to the transferee who has signed the
certification provided for on the form of Initial Security stating, or
has otherwise advised the Company and the Security Registrar in
writing, that it is purchasing the Initial Security for its own
account or an account with respect to which it exercises sole
investment discretion and that it, or the person on whose behalf it is
acting with respect to any such account, is a QIB within the meaning
of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, and the
Initial Security to be transferred consists of U.S. Physical
Securities, Temporary Offshore Physical Securities or Permanent
Offshore Physical Securities, upon receipt by the Security Registrar
of instructions given in accordance with the Depositary's and the
Security Registrar's procedures therefor, the Security Registrar shall
reflect on its books and records the date and an increase in the
principal amount of the U.S. Global Security in an amount equal to the
principal amount of the U.S. Physical Securities, Temporary
56
Offshore Physical Securities or Permanent Offshore Physical
Securities, as the case may be, to be transferred, and the Trustee
shall cancel the Physical Security so transferred.
(c) Transfers by Non-U.S. Persons on or Prior to December 8, 1996.
-------------------------------------------------------------
The following provisions shall apply with respect to registration of any
proposed transfer of an Initial Security by a Non-U.S. Person on or prior to
December 8, 1996:
(i) The Security Registrar shall register the transfer of any
Initial Security (x) if the proposed transferee is a Non-U.S. Person
and the proposed transferor has delivered to the Security Registrar a
certificate substantially in the form of Exhibit D hereto or (y) if
the proposed transferee is a QIB and the proposed transferor has
checked the box provided for on the form of Initial Security stating,
or has otherwise advised the Company and the Security Registrar in
writing, that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has signed the certification provided
for on the form of Initial Security stating, or has otherwise advised
the Company and the Security Registrar in writing, that it is
purchasing Initial Security for its own account or an account with
respect to which it exercises sole investment discretion and that it,
or the person on whose behalf it is acting with respect to any such
account, is a QIB within the meaning of Rule 144A, and is aware that
the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A. Unless clause (ii) below is
applicable, the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Temporary Offshore Physical
Securities of like tenor and amount.
(ii) If the proposed transferee is an Agent Member, upon receipt
by the Security Registrar of instructions given in accordance with the
Depositary's and the Security Registrar's procedures therefor, the
Security Registrar shall reflect on its books and records the date and
an increase in the principal amount at maturity of the U.S. Global
Security in an amount equal to the principal amount of the Temporary
Offshore Physical Security to be transferred, and the Trustee shall
cancel the Temporary Offshore Physical Security if any so transferred.
(d) Transfers by Non-U.S. Persons on or After December 9, 1996. The
----------------------------------------------------------
following provisions shall apply with respect to any transfer of an Initial
Security by a Non-U.S. Person on or after December 9, 1996:
57
(i)(x) If the Initial Security to be transferred is a Permanent
Offshore Physical Security, the Security Registrar shall register such
transfer, (y) if the Initial Security to be transferred is a Temporary
Offshore Physical Security, upon receipt of a certificate
substantially in the form of Exhibit B from the proposed transferor,
the Security Registrar shall register such transfer and (z) in the
case of either clause (x) or (y), unless clause (ii) below is
applicable, the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Permanent Offshore Physical
Securities of like tenor and amount.
(ii) If the proposed transferee is an Agent Member, upon receipt
by the Security Registrar of instructions given in accordance with the
Depositary's and the Security Registrar's procedures therefor, the
Security Registrar shall reflect on its books and records the date and
an increase in the principal amount of the U.S. Global Security in an
amount equal to the principal amount of the Temporary Offshore
Physical Security or Permanent Offshore Physical Security to be
transferred, and the Trustee shall cancel the Physical Security so
transferred.
(e) Transfers to Non-U.S. Persons at Any Time. The following
-----------------------------------------
provisions shall apply with respect to any transfer of an Initial Security to a
Non-U.S. Person:
(i) Prior to December 9, 1996, the Security Registrar shall
register any proposed transfer of an Initial Security to a Non-U.S.
Person upon receipt of a certificate substantially in the form of
Exhibit D hereto from the proposed transferor and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more
Temporary Offshore Physical Securities of like tenor and amount.
(ii) On and after December 9, 1996, the Security Registrar shall
register any proposed transfer to any Non-U.S. Person (w) if the
Initial Security to be transferred is a Permanent Offshore Physical
Security, (x) if the Initial Security to be transferred is a Temporary
Offshore Physical Security, upon receipt of a certificate
substantially in the form of Exhibit D from the proposed transferor,
(y) if the Initial Security to be transferred is a U.S. Physical
Security or an interest in the U.S. Global Security, upon receipt of a
certificate substantially in the form of Exhibit D from the proposed
transferor and (z) in the case of either clause (w), (x) or (y), the
Company shall execute, and the Trustee shall authenticate and deliver,
one or more Permanent Offshore Physical Securities of like tenor and
amount.
(iii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Security
58
Registrar of (x) the document, if any, required by paragraph (i), and
(y) instructions in accordance with the Depositary's and the Security
Registrar's procedures therefor, the Security Registrar shall reflect
on its books and records the date and a decrease in the principal
amount of the U.S. Global Security in an amount equal to the principal
amount of the beneficial interest in the U.S. Global Security to be
transferred and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Permanent Offshore Physical
Securities of like tenor and amount.
(f) Private Placement Legend. Upon the registration of transfer,
------------------------
exchange or replacement of Securities not bearing the Private Placement Legend,
the Security Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the registration of transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Security Registrar shall
deliver only Securities that bear the Private Placement Legend unless either (i)
the circumstances contemplated by paragraphs (a)(i)(x), (d)(i) or (e)(ii) of
this Section 307 exist or (ii) there is delivered to the Security Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(g) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 306 or this Section
307. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Security Registrar.
Section 308. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (a) any mutilated Security is surrendered to the Trustee, or (b)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, each Guarantor and the Trustee, such security or indemnity, in each
case, as may be required by them to save each of them harmless, then, in the
absence of notice to the Company, any Guarantor or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon a Company Request the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a replacement Security of like tenor and principal amount,
bearing a number not contemporaneously outstanding.
59
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section,
the Company may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charge that may
be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company and the Guarantors, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 309. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on the Stated Maturity of such interest shall be paid to the
Person in whose name the Security (or any Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest payment
date.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on the Stated Maturity of such interest and interest
on such defaulted interest at the then applicable interest rate borne by the
Securities, to the extent lawful (such defaulted interest and interest thereon
herein collectively called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the Regular Record Date; and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in
Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or any relevant Predecessor
Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee
in writing of the amount of Defaulted Interest proposed to be paid on
each Security and the date (not less than 30 days after such notice)
of the proposed payment (the "Special Payment Date"), and at the same
time the Company shall deposit
60
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior
to the Special Payment Date, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Subsection provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior
to the Special Payment Date and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company in writing of such Special
Record Date. In the name and at the expense of the Company, the
Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Payment Date therefor
to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities are registered on such Special Record
Date and shall no longer be payable pursuant to the following
Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after written
notice given by the Company to the Trustee of the proposed payment
pursuant to this Subsection, such payment shall be deemed practicable
by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 310. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and the Company, or the Trustee on behalf of the Company,
shall use CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; provided, however, that any such notice shall state that no
-------- -------
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or exchange and
that reliance may be placed only on the other identification numbers printed on
the Securities; and provided further, however, that failure to use CUSIP numbers
-------- ------- -------
in any notice of redemption or exchange shall not affect the validity or
sufficiency of such notice.
61
Section 311. Persons Deemed Owners.
---------------------
The Company, any Guarantor, the Trustee and any agent of the Company,
any Guarantor or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 307) interest on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any agent of
the Company, any Guarantor or the Trustee shall be affected by notice to the
contrary.
Section 312. Cancellation.
------------
All Securities surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already cancelled, shall be promptly cancelled by it. The Company and any
Guarantor may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company or such
Guarantor may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be destroyed and certification of their
destruction delivered to the Company unless by a Company Order the Company shall
direct that the cancelled Securities be returned to it. The Trustee shall
provide the Company a list of all Securities that have been cancelled from time
to time as requested by the Company.
Section 313. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
- ----------
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 402 or Section 403 be
applied to all of the Outstanding Securities (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Four.
62
Section 402. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 402, the Company, each of the Guarantors and any other obligor
upon the Securities, if any, shall be deemed to have been discharged from its
obligations with respect to the Defeased Securities on the date the conditions
set forth in Section 404 below are satisfied (hereinafter, "defeasance"). For
this purpose, such defeasance means that the Company, each Guarantor and any
other obligor upon the Securities shall be deemed to have paid and discharged
the entire Indebtedness represented by the Defeased Securities, which shall
thereafter be deemed to be "Outstanding" only for the purposes of Section 405
and the other Sections of this Indenture referred to in (a) and (b) below, and
to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, and, upon Company Request, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of Defeased Securities to receive, solely from the trust fund described
in Section 404 and as more fully set forth in such Section, payments in respect
of the principal of, premium, if any, and interest on such Securities when such
payments are due, (b) the Company's obligations with respect to such Defeased
Securities under Sections 304, 305, 308, 1002 and 1003, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, including, without
limitation, the Trustee's rights under Section 606, and (d) the defeasance
provisions under this Article Four. Subject to compliance with this Article
Four, the Company may exercise its option under this Section 402 notwithstanding
the prior exercise of its option under Section 403 with respect to the
Securities.
Section 403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 403, the Company and each Guarantor shall be released from its
obligations under any covenant or provision contained or referred to in Sections
1005 through 1019, inclusive, and the provisions of Article Twelve and Sections
1416 through 1429 shall not apply, with respect to the Defeased Securities on
and after the date the conditions set forth in Section 404 below are satisfied
(hereinafter, "covenant defeasance"), and the Defeased Securities shall
thereafter be deemed to be 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 and the provisions of Article Twelve
and Sections 1416 through 1429, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the Defeased Securities, the Company and each
Guarantor may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section or Article, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such
63
Section or Article to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 501(c), (d) or (g), but, except as specified above, the remainder
of this Indenture and such Defeased Securities shall be unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
402 or Section 403 to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 608 who shall agree to comply with the provisions of this Article Four
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (a) United States dollars in
an amount, or (b) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms and with no further reinvestment will provide, not later than one day
before the due date of any payment, money in an amount, or (c) a combination
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants or a nationally recognized investment banking
firm expressed in a written certification thereof delivered to the Trustee, to
pay and discharge and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge the principal of, premium, if any, and interest on
the Defeased Securities on the Stated Maturity of such principal or installment
of principal or interest (or on any date after December 15, 1998 (such date
being referred to as the "Defeasance Redemption Date") if when exercising under
Section 401 either its option applicable to Section 402 or its option applicable
to Section 403, the Company shall have delivered to the Trustee an irrevocable
notice to redeem all of the Outstanding Securities on the Defeasance Redemption
Date); provided that the Trustee shall have been irrevocably instructed to apply
--------
such United States dollars or the proceeds of such U.S. Government Obligations
to said payments with respect to the Securities; and provided, further, that the
-------- -------
United States dollars or U.S. Government Obligations deposited shall not be
subject to the rights of the holders of Senior Indebtedness and Senior Guarantor
Indebtedness pursuant to the provisions of Article Twelve and Article Fourteen.
For this purpose, "U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt, provided that (except as
--------
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the specific
payment
64
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
(2) In the case of an election under Section 402, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Independent Counsel in the United States shall confirm that, the Holders of the
Outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
(3) In the case of an election under Section 403, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States to the effect that the Holders of the Outstanding Securities 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 or insofar as subsections 501(h) and (i)
are concerned, at any time during the period ending on the 91st day after the
date of deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee
for the Securities to have a conflicting interest with respect to any securities
of the Company or any Guarantor.
(6) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Guarantor is
a party or by which it is bound.
(7) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel to the effect that (A) the trust funds will not be subject
to any rights of holders of Senior Indebtedness or Senior Guarantor
Indebtedness, including, without limitation, those arising under this Indenture
and (B) after the 91st day following the
65
deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Securities or any Guarantee over the other
creditors of the Company or any Guarantor with the intent of defeating,
hindering, delaying or defrauding creditors of the Company, any Guarantor or
others.
(9) No event or condition shall exist that would prevent the Company
from making payments of the principal of, premium, if any, and interest on the
Securities on the date of such deposit or at any time ending on the 91st day
after the date of such deposit.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 402 or
the covenant defeasance under Section 403 (as the case may be) have been
complied with as contemplated by this Section 404.
Opinions of Counsel required to be delivered under this Section may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Section 405. Deposited Money and U.S. Government Obligations to Be
-----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions.
- ---------------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee--collectively
for purposes of this Section 405, the "Trustee") pursuant to Section 404 in
respect of the Defeased Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 or the principal and interest received in
respect thereof other than
66
any such tax, fee or other charge which by law is for the account of the Holders
of the Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations held by it as
provided in Section 404 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect defeasance or covenant defeasance.
Section 406. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 402 or 403, 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 each Guarantor's obligations under this Indenture and the
Securities, and the provisions of Articles Twelve and Fourteen hereof, shall be
revived and reinstated as though no deposit had occurred pursuant to Section 402
or 403, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such United States dollars or U.S. Government Obligations
in accordance with Section 402 or 403, as the case may be; provided, however,
-------- -------
that if the Company makes any payment to the Trustee or Paying Agent of
principal, premium, if any, or interest on any Security following the
reinstatement of its obligations, the Trustee or Paying Agent shall promptly pay
any such amount to the Holders of the Securities and the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Twelve or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) there shall be a default in the payment of any interest on any
Security when it becomes due and payable, and such default shall continue for a
period of 30 days;
67
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security at its Maturity (upon acceleration, optional
or mandatory redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or any Guarantor under this Indenture
(other than a default in the performance, or breach, of a covenant or agreement
which is specifically dealt with in clauses (a) or (b) or in clauses (ii), (iii)
and (iv) of this clause (c)) and such default or breach shall continue for a
period of 30 days after written notice has been given, by certified mail, (x) to
the Company by the Trustee or (y) to the Company and the Trustee by the holders
of at least 25% in aggregate principal amount of the Outstanding Securities,
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; (ii) there shall be a
default in the performance or breach of the provisions of Article Eight; (iii)
the Company shall have failed to make or consummate an Offer in accordance with
the provisions of Section 1013; or (iv) the Company shall have failed to make or
consummate a Change of Control Offer in accordance with the provisions of
Section 1016;
(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any Guarantor or any
Subsidiary then has outstanding Indebtedness in excess of $10,000,000 in the
aggregate and, if not already matured at its final maturity in accordance with
its terms, such Indebtedness shall have been accelerated;
(e) any Guarantee shall for any reason cease to be, or be asserted in
writing by any Guarantor or the Company not to be, in full force and effect and
enforceable in accordance with its terms, except to the extent contemplated by
this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money
in excess of $5,000,000 either individually or in the aggregate (net of amounts
covered by insurance, bond, surety or similar instrument), shall be entered
against the Company, any Guarantor, any Subsidiary or any of their respective
properties and shall not be discharged and either (a) any creditor shall have
commenced an enforcement proceeding upon such judgment, order or decree or (b)
there shall have been a period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of an appeal or otherwise,
shall not be in effect;
(g) any holder or holders of at least $10,000,000 in aggregate
principal amount of Indebtedness of the Company, any Guarantor or any Subsidiary
after a default under such Indebtedness shall notify the Trustee of the intended
sale or disposition of any assets of the Company, any Guarantor or any
Subsidiary that have been pledged to or for the benefit of such holder or
holders to secure such Indebtedness or shall commence proceedings, or take any
action (including by way of set-off), to retain in satisfaction of
68
such Indebtedness or to collect on, seize, dispose of or apply in satisfaction
of Indebtedness, assets of the Company, any Guarantor or any Subsidiary
(including funds on deposit or held pursuant to lock-box and other similar
arrangements);
(h) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Company, any
Guarantor or any Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or (ii) a decree or order adjudging the Company, any
Guarantor or any Subsidiary bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company, any
Guarantor or any Subsidiary under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company, any Guarantor or any Subsidiary or
of any substantial part of their respective properties, or ordering the winding
up or liquidation of their affairs, and any such decree or order for relief
shall continue to be in effect, or any such other decree or order shall be
unstayed and in effect, for a period of 60 consecutive days; or
(i) (i) the Company, any Guarantor or any Subsidiary commences a
voluntary case or proceeding under any applicable Bankruptcy Law or any other
case or proceeding to be adjudicated bankrupt or insolvent, (ii) the Company,
any Guarantor or any Subsidiary consents to the entry of a decree or order for
relief in respect of the Company, any Guarantor or such Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy Law or to the
commencement of any bankruptcy or insolvency case or proceeding against it,
(iii) the Company, any Guarantor or any Subsidiary files a petition or answer or
consent seeking reorganization or relief under any applicable federal or state
law, (iv) the Company, any Guarantor or any Subsidiary (1) consents to the
filing of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company, any Guarantor or such Subsidiary or of any substantial
part of their respective properties, (2) makes an assignment for the benefit of
creditors or (3) admits in writing its inability to pay its debts generally as
they become due, or (v) the Company, any Guarantor or any Subsidiary takes any
corporate action in furtherance of any such actions in this paragraph (i).
The Company shall deliver to the Trustee within five days after the
occurrence thereof, written notice, in the form of an Officers' Certificate, of
any Default, its status and what action the Company is taking or proposes to
take with respect thereto.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Sections 501(h) and (i)) shall occur and be continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the
69
Securities Outstanding may, and the Trustee at the request of the Holders of not
less than 25% in aggregate principal amount of the Securities Outstanding shall,
declare all unpaid principal of, premium, if any, and accrued interest on all
the Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders of the Securities); provided
--------
that so long as the Credit Agreement is in effect, such declaration shall not
become effective until the earlier of (a) five Business Days after receipt of
such notice of acceleration from the Holders or the Trustee by the agent under
the Credit Agreement or (b) acceleration of the Indebtedness under the Credit
Agreement. Thereupon such principal shall become immediately due and payable,
and the Trustee may, at its discretion, proceed to protect and enforce the
rights of the holders of Securities by appropriate judicial proceeding. If an
Event of Default specified in clause (h) or (i) of Section 501 occurs relating
to the Company, or any Subsidiary and is continuing, then all the Securities
shall ipso facto become and be immediately due and payable, in an amount equal
---- -----
to the principal amount of the Securities, together with accrued and unpaid
interest, if any, to the date the Securities become due and payable, without any
declaration or other act on the part of the Trustee or any Holder. The Trustee
or, if notice of acceleration is given by the Holders, the Holders shall give
notice to the agent under the Credit Agreement of any such acceleration.
At any time after such declaration of acceleration has been made but
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Securities Outstanding, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under Section 606
and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel,
(ii) all overdue interest on all Securities, and
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities;
(b) all Events of Default, other than the non-payment of principal of
the Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513; and
(c) the rescission will not conflict with any judgment or decree.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
70
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
The Company and each Guarantor covenant that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues
for a period of 30 days, or
(b) default is made in the payment of the principal of or premium, if
any, on any Security at the Stated Maturity thereof,
the Company and each such Guarantor will, upon demand of the Trustee, pay to it,
for the benefit of the Holders of such Securities, subject to Articles Twelve
and Fourteen, the whole amount then due and payable on such Securities for
principal and premium, if any, and interest, with interest upon the overdue
principal and premium, if any, and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest, at the rate
borne by the Securities; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company or any Guarantor, as the case may be, fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any Guarantor or
any other obligor upon the Securities and collect the moneys adjudged or decreed
to be payable in the manner provided by law out of the property of the Company
or any Guarantor or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or the Guarantees by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including, seeking recourse against any Guarantor pursuant
to the terms of any Guarantee, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy, including,
without limitation, seeking recourse against any Guarantor pursuant to the terms
of a Guarantee, or to enforce any other proper remedy, subject however to
Section 512.
71
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) subject to Articles Twelve and Fourteen, to collect and receive
any moneys or other property payable or deliverable on any such claims and to
distribute the same;
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 the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
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 Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of the creditors'
committee.
Section 505. Trustee May Enforce Claims without Possession of
------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture, the Securities
or the Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name and as trustee
72
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article or
otherwise on behalf of the Holders or the Trustee pursuant to this Article or
through any proceeding or any arrangement or restructuring in anticipation or in
lieu of any proceeding contemplated by this Article shall be applied, subject to
applicable law, in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
606;
SECOND: Subject to Articles Twelve and Fourteen, to the payment of
the amounts then due and unpaid upon the Securities for principal, premium, if
any, and interest, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium, if any, and interest; and
THIRD: Subject to Articles Twelve and Fourteen, the balance, if any,
to the Person or Persons entitled thereto, including the Company, provided that
all sums due and owing to the Holders and the Trustee have been paid in full as
required by this Indenture.
Section 507. Limitation on Suits.
-------------------
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
73
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any Guarantee to affect, disturb or prejudice the rights of
any other Holders, or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner provided in this Indenture or any Guarantee and for the equal and ratable
benefit of all the Holders.
Section 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, but subject to
Articles Twelve and Fourteen, the Holder of any Security shall have the right
based on the terms stated herein, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and (subject to Section
307) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption or repurchase, on the Redemption
Date or the repurchase date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder, subject to Articles Twelve and Fourteen.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or the Guarantees and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case the
Company, each of the Guarantors, any other obligor on the Securities, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise,
74
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 512. Control by Holders.
------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, provided that
--------
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or any Guarantee, expose the Trustee to personal liability,
or be unduly prejudicial to Holders not joining therein; provided, however, that
(subject to Section 602) the Trustee shall have no duty to ascertain whether or
not such actions or forbearances are unduly prejudicial to such Holders; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest
on any Security; or
(b) in respect of a covenant or a provision hereof which under Article
Nine cannot be modified or amended without the consent of a higher percentage of
the principal amount of the Outstanding Securities affected.
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.
75
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, 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,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of, premium, if any, or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 515. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities contemplated herein or in the Securities or which may affect
the covenants or the performance of this Indenture; and each of the Company and
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
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults.
------------------
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; provided, however, that, except in
-------- -------
the case of a Default in the payment of the principal of, premium, if any, or
interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as a trust committee
76
of Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders.
Section 602. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Trust Indenture Act Sections 315(a)
through 315(d):
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of Indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) before the Trustee acts or refrains from acting, the Trustee may
consult with counsel and any written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred therein or thereby
in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence of the Trustee;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document
unless requested in writing to do so by the Holders of not less than a majority
in aggregate principal amount of the Securities then Outstanding; provided that,
--------
if the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable
77
expenses of every such investigation shall be paid by the Company or, if paid by
the Trustee or any predecessor Trustee, shall be repaid by the Company upon
demand; provided, further, the Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may deem fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(g) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(h) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(i) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers;
(j) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder; and
(k) except for (i) a default under Section 501(a) or (b) hereof, or
(ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any default or Event of Default unless specifically
notified in writing of such event by the Company or the Holders of not less than
25% in aggregate principal amount of the Securities then outstanding; as used
herein, the term "actual knowledge" means the actual fact or statement of
knowing, without any duty to make any investigation with regard thereto.
Section 603. Trustee Not Responsible for Recitals, Dispositions of
-----------------------------------------------------
Securities or Application of Proceeds Thereof.
- ---------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility and Qualification on Form T-1 supplied to the
Company are true and accurate subject to the qualifications set forth
78
therein. The Trustee shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section 604. Trustee and Agents May Hold Securities; Collections;
----------------------------------------------------
etc.
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with the Company
and receive, collect, hold and retain collections from the Company with the same
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
Section 605. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Four, the Trustee may invest all moneys received by
the Trustee, until used or applied as herein provided, in Temporary Cash
Investments in accordance with the directions of the Company.
Section 606. Compensation and Indemnification of Trustee and Its
---------------------------------------------------
Prior Claim.
- -----------
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust) and the
Company covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements
and advances incurred (including the costs of collection) or made by or on
behalf of the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ) except
any such expense, disbursement or advance as may arise from its negligence or
bad faith. The Company also covenants and agrees to indemnify the Trustee and
each predecessor Trustee for, and to hold it harmless against, any loss,
liability, tax, assessment or other governmental charge (other than taxes
applicable to the Trustee's compensation hereunder) or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder and its
duties hereunder, including enforcement of this Section 606 and also including
any liability which the Trustee may incur as a result of failure to withhold,
pay or report any tax, assessment or other governmental charge, and
79
the costs and expenses of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The obligations of the Company under this Section to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute an additional obligation hereunder and shall
survive the satisfaction and discharge of this Indenture. When the Trustee
incurs expenses or renders services in connection with an Event of Default
specified in Article Five hereof, the expenses (including reasonable fees and
expenses of its counsel) and the compensation for the services in connection
therewith are intended to constitute expense of administration under any
applicable bankruptcy law.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, excluding any
property or funds which are held in trust for the holders of Senior Indebtedness
and except funds held in trust for the payment of principal of, premium, if any,
or interest on particular Securities. The obligations of the Company under this
Section shall not be subordinated to the payment of Senior Indebtedness pursuant
to Article Twelve.
Section 607. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
Section 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Trust Indenture Act Section 310(a)(1) and which
shall have a combined capital and surplus of at least $100,000,000, to the
extent there is an institution eligible and willing to serve. If the Trustee
does not have an office in The City of New York, the Trustee may appoint an
agent in The City of New York reasonably acceptable to the Company to conduct
any activities which the Trustee may be required under this Indenture to conduct
in The City of New York. If the Trustee does not have an office in The City of
New York or has not appointed an agent in The City of New York, the Trustee
shall be a participant in The Depository Trust Company and FAS distribution
systems. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of federal, state, territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
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Section 609. Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee.
- -------
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor trustee under Section 610.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice thereof to the Company. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument executed by authority of the Board of
Directors of the Company, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor trustee. If an instrument of acceptance by
a successor trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may, or
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper, appoint a
successor trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of
not less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust
Indenture Act Section 310(b) after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security
for at least six months, or
(2) the Trustee shall cease to be eligible under Section 608 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 514, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if
81
any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee. Such successor trustee so
appointed shall forthwith upon its acceptance of such appointment become the
successor trustee and supersede the successor trustee appointed by the Company.
If no successor trustee shall have been so appointed by the Company or the
Holders of the Securities and accepted appointment in the manner hereinafter
provided, the Holder of any Security who has been a bona fide Holder for at
least six months may, subject to Section 514, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor trustee and the address of its
Corporate Trust Office and any agent hereunder.
Section 610. Acceptance of Appointment by Successor.
--------------------------------------
Every successor trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee as if originally named as Trustee hereunder;
but, nevertheless, on the written request of the Company or the successor
trustee, upon payment of its charges then unpaid, such retiring Trustee shall,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Company shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor trustee all
such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain
a prior lien upon all property or funds held or collected by such Trustee or
such successor trustee to secure any amounts then due such Trustee pursuant to
the provisions of Section 606.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 610 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act
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Section 310(a) and this Article Sixth and shall have a combined capital and
surplus of at least $100,000,000 and have a Corporate Trust Office or an agent
selected in accordance with Section 608.
Upon acceptance of appointment by any successor trustee as provided in
this Section 610, the Company shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
609. If the Company fails to give such notice within 10 days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 611. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under Trust Indenture Act Section
310(a) and this Article Sixth and shall have a combined capital and surplus of
at least $100,000,000 and have a Corporate Trust Office or an agent selected in
accordance with Section 608 without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have; provided that the right to adopt
--------
the certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, amalgamation, conversion or consolidation.
Section 612. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such
83
other obligor). A Trustee who has resigned or been removed shall be subject to
the Trust Indenture Act Section 311(a) to the extent indicated therein.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders.
- -------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may request in writing, within
30 days after receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is
furnished;
provided, however, that if and so long as the Trustee shall be the Security
- -------- -------
Registrar, no such list need be furnished.
Section 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 312.
Section 703. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities, the Trustee shall transmit by mail to
all Holders, as their names and addresses appear in the Security Register, as
provided in Trust Indenture Act Section 313(c), a brief report dated as of such
May 15 in accordance with and to the extent required by Trust Indenture Act
Section 313(a).
Section 704. Reports by Company and Guarantors.
---------------------------------
The Company, and any Guarantor shall:
84
(a) file with the Trustee, within 30 days after the Company or any
Guarantor, as the case may be, is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company or any
Guarantor may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company, or any Guarantor, as the
case may be, is not required to file information, documents or reports pursuant
to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company or any Guarantor, as the case may be, with the conditions and covenants
of this Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit or cause to be transmitted by mail to all Holders, as
their names and addresses appear in the Security Register, within 30 days after
the filing thereof with the Trustee, in the manner and to the extent provided in
Trust Indenture Act Section 313(c), such summaries of any information, documents
and reports required to be filed by the Company or any Guarantor, as the case
may be, pursuant to Subsections (a) and (b) of this Section as may be required
by rules and regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. Company or Any Guarantor May Consolidate, etc., Only on
-------------------------------------------------------
Certain Terms.
- -------------
(a) The Company shall not, in a single transaction or through a series
of related transactions, consolidate with or merge with or into any other Person
or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to any Person or
group of affiliated Persons, or permit any of its Subsidiaries to enter into any
such transaction or transactions if such transaction or transactions, in the
aggregate, would result in a sale, assignment, conveyance, transfer, lease or
disposal of all or substantially all of the properties and assets of the Company
and
85
its Subsidiaries on a Consolidated basis to any other Person or group of
affiliated Persons, unless at the time and after giving effect thereto:
(i) either (a) the Company shall be the continuing corporation, or
(b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, conveyance, transfer, lease or
disposition of all or substantially all of the properties and assets
of the Company and its Subsidiaries on a Consolidated basis (the
"Surviving Entity") shall be a corporation duly organized and validly
existing under the laws of the United States of America, any state
thereof or the District of Columbia and such Person assumes, by a
supplemental indenture in a form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and
this Indenture, and this Indenture shall remain in full force and
effect;
(ii) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such transaction on a pro
---
forma basis, the Consolidated Net Worth of the Company (or the
-----
Surviving Entity if the Company is not the continuing obligor under
this Indenture) is equal to or greater than the Consolidated Net Worth
of the Company immediately prior to such transaction;
(iv) immediately before and immediately after giving effect to such
transaction on a pro forma basis (on the assumption that the
--- -----
transaction occurred on the first day of the four-quarter period
immediately prior to the consummation of such transaction with the
appropriate adjustments with respect to the transaction being included
in such pro forma calculation), the Company (or the Surviving Entity
--- -----
if the Company is not the continuing obligor under this Indenture)
could incur $1.00 of additional Indebtedness under Section 1008 (other
than Permitted Indebtedness);
(v) each Guarantor, if any, unless it is the other party to the
transactions described above, shall have by supplemental indenture
confirmed that its Guarantee shall apply to such Person's obligations
under this Indenture and the Securities;
(vi) if any of the property or assets of the Company or any of its
Subsidiaries would thereupon become subject to any Lien, the
provisions of Section 1012 are complied with; and
86
(vii) the Company or the Surviving Entity shall have delivered, or
caused to be delivered, to the Trustee, in form and substance
reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each to the effect that such consolidation,
merger, transfer, sale, assignment, conveyance, lease or other
transaction and the supplemental indenture in respect thereto comply
with this Indenture and that all conditions precedent herein provided
for relating to such transaction have been complied with.
(b) Each Guarantor shall not, and the Company will not permit a
Guarantor to, in a single transaction or through a series of related
transactions merge or consolidate with or into any other corporation (other than
the Company or any other Guarantor) or other entity, or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets on a Consolidated basis to any entity (other than the
Company or any other Guarantor) unless at the time and after giving effect
thereto:
(i) either (1) such Guarantor shall be the continuing corporation or
partnership or (2) the entity (if other than such Guarantor) formed by
such consolidation or into which such Guarantor is merged or the
entity which acquires by sale, assignment, conveyance, transfer, lease
or disposition the properties and assets of such Guarantor shall be a
corporation duly organized and validly existing under the laws of the
United States, any state thereof or the District of Columbia and shall
expressly assume by an indenture supplemental hereto, executed and
delivered to the Trustee, in a form reasonably satisfactory to the
Trustee, all the obligations of such Guarantor under its Guarantee and
this Indenture;
(ii) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and
(iii) such Guarantor shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee, each stating that such consolidation,
merger, sale, assignment, conveyance, transfer, lease or disposition
and such supplemental indenture comply with this Indenture, and
thereafter all obligations of the predecessor shall terminate.
The provisions of this Section 801(b) shall not apply to any transaction
(including any Asset Sale made in accordance with Section 1013) with respect to
any Guarantor if the Guarantee of such Guarantor is released in connection with
such transaction in accordance with Section 1014(c) and Section 1414.
87
Section 802. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Guarantor in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company or such
Guarantor, as the case may be, is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, under this Indenture in the
Securities and/or the Guarantees, as the case may be, with the same effect as if
such successor had been named as the Company or such Guarantor, as the case may
be, herein in the Securities and/or in the Guarantees, as the case may be. When
a successor assumes all the obligations of its predecessor under this Indenture,
the Securities or a Guarantee, as the case may be, the predecessor shall be
released from those obligations; provided that in the case of a transfer by
--------
lease, the predecessor shall not be released from the payment of principal and
interest on the Securities or a Guarantee, as the case may be.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent
------------------------------------------------------
of Holders.
- ----------
Without the consent of any Holders, the Company and the Guarantors, if
any, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto or
agreements or other instruments with respect to any Guarantee, in form and
substance satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, any
Guarantor or any other obligor upon the Securities, and the assumption by any
such successor of the covenants of the Company or such Guarantor or obligor
herein and in the Securities and in any Guarantee;
(b) to add to the covenants of the Company, any Guarantor or any other
obligor upon the Securities for the benefit of the Holders, or to surrender any
right or power herein conferred upon the Company, any Guarantor or any other
obligor upon the Securities, as applicable, herein, in the Securities or in any
Guarantee;
(c) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
in the Securities or in any Guarantee, or to make any other provisions with
respect to matters or questions
88
arising under this Indenture, the Securities or any Guarantee; provided that, in
--------
each case, such provisions shall not adversely affect the interests of the
Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by Section 905 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 1014;
(f) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder; or
(g) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security for
the payment and performance of the Indenture Obligations, in any property or
assets, including any which are required to be mortgaged, pledged or
hypothecated, or in which a security interest is required to be granted to the
Trustee pursuant to this Indenture or otherwise.
Section 902. Supplemental Indentures and Agreements with Consent of
------------------------------------------------------
Holders.
- -------
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company, each Guarantor, if any, and the Trustee, the Company
and each Guarantor (if a party thereto) when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto or
agreements or other instruments with respect to any Guarantee in form and
substance satisfactory to the Trustee, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders under this
Indenture, the Securities or any Guarantee; provided, however, that no such
-------- -------
supplemental indenture, agreement or instrument shall, without the consent of
the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
change the coin or currency in which the principal of any Security or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date);
(b) amend, change or modify the obligation of the Company to make and
consummate an Offer with respect to any Asset Sale or Asset Sales in accordance
with Section 1013 or the obligation of the Company to make and consummate a
Change
89
of Control Offer in the event of a Change of Control in accordance with Section
1016, including amending, changing or modifying any definitions with respect
thereto;
(c) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver or
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture or with respect
to any Guarantee;
(d) modify any of the provisions of this Section or Sections 513 or
1021, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby;
(e) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights and
obligations under this Indenture; or
(f) amend or modify any of the provisions of this Indenture relating
to the subordination of the Securities or any Guarantee in any manner adverse to
the Holders of the Securities or any Guarantee.
Upon the written request of the Company and each Guarantor, if any,
accompanied by a copy of a Board Resolution authorizing the execution of any
such supplemental indenture or Guarantee, and upon the filing with the Trustee
of evidence of the consent of Holders as aforesaid, the Trustee shall join with
the Company and each Guarantor in the execution of such supplemental indenture
or Guarantee.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or Guarantee
or agreement or instrument relating to any Guarantee, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures and Agreements.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and (subject to Trust Indenture Act Section 315(a)
through 315(d) and Section 602 hereof) shall be fully protected in relying upon,
an Opinion of Counsel and an Officers' Certificate stating that the execution of
such supplemental indenture, agreement or instrument is authorized or permitted
by this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture, agreement or instrument which affects the
Trustee's own rights, duties or immunities under this Indenture, any Guarantee
or otherwise.
90
Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and each Guarantor and authenticated and delivered by
the Trustee in exchange for Outstanding Securities.
Section 907. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights under
Articles Twelve and Fourteen, or any definitions or provisions related thereto,
or the Guarantees of any holder of Senior Indebtedness or Senior Guarantor
Indebtedness unless the requisite holders of each issue of Senior Indebtedness
or Senior Guarantor Indebtedness affected thereby shall have consented to such
supplemental indenture.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
Subject to the provisions of Articles Twelve and Fourteen, the Company
will duly and punctually pay the principal of, premium, if any, and interest on
the Securities in accordance with the terms of the Securities and this
Indenture.
Section 1002. Maintenance of Office or Agency.
------------------------------
The Company will maintain an office or agency where Securities may be
presented or surrendered for payment. The Company also will maintain in The
City of New York an office or agency where Securities may be surrendered for
registration of
91
transfer, redemption or exchange and where notices and demands to or upon the
Company in respect of the Securities 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 any such offices or agencies. If at any time the
Company shall fail to maintain any such required offices or agencies or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the office of the agent
of the Trustee described above and the Company hereby appoints such agent as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such office or agency.
Section 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of, premium, if any, or interest on
any of the Securities, segregate and hold in trust for the benefit of the
Holders entitled thereto a sum sufficient to pay the principal, premium, if any,
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, on or
before each due date of the principal of, premium, if any, or interest on, any
Securities, deposit with a Paying Agent a sum in same day funds sufficient to
pay the principal, premium, if any, or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any
Guarantor (or any other obligor upon the Securities) in the making of any
payment of principal, premium, if any, or interest;
92
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and payable shall
promptly be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
-------- ------
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), and mail to each such Holder, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification,
publication and mailing, any unclaimed balance of such money then remaining will
promptly be repaid to the Company.
Section 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Subsidiary; provided, however, that the Company shall not be
-------- -------
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof would not reasonably be expected to have a material adverse effect on
the ability of the Company to perform its obligations hereunder; and provided,
--------
further, however, that
- ------- -------
93
the foregoing shall not prohibit a sale, transfer or conveyance of a Subsidiary
or any of its assets in compliance with the terms of this Indenture.
Section 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
on or before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary shown to be due on any return of the Company or any Subsidiary or
otherwise assessed or upon the income, profits or property of the Company or any
Subsidiary if failure to pay or discharge the same could reasonably be expected
to have a material adverse effect on the ability of the Company or any Guarantor
to perform its obligations hereunder and (b) all lawful claims for labor,
materials and supplies, which, if unpaid, would by law become a Lien upon the
property of the Company or any Subsidiary, except for any Lien permitted to be
incurred under Section 1012 if failure to pay or discharge the same could
reasonably be expected to have a material adverse effect on the ability of the
Company or any Guarantor to perform its obligations hereunder; provided,
--------
however, that the Company shall not be required to pay or discharge or cause to
- -------
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and in respect of which
appropriate reserves (in the good faith judgment of management of the Company)
are being maintained in accordance with GAAP consistently applied.
Section 1006. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or
any Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be consistent with sound business practice and necessary so that
the business carried on in connection therewith may be properly conducted at all
times; provided, however, that nothing in this Section shall prevent the Company
-------- -------
from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not reasonably expected to
have a material adverse effect on the ability of the Company to perform its
obligations hereunder.
Section 1007. Insurance.
---------
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company to be
94
responsible, against loss or damage to the extent that property of similar
character is usually so insured by corporations similarly situated and owning
like properties.
Section 1008. Limitation on Indebtedness.
--------------------------
(a) The Company will not, and will not permit any of its Subsidiaries
to, create, issue, assume, guarantee, or otherwise in any manner become directly
or indirectly liable for or with respect to or otherwise incur (collectively,
"incur") any Indebtedness (including any Acquired Indebtedness), except that the
Company and any Guarantor may incur Indebtedness (including any Acquired
Indebtedness) and any Subsidiary that is not a Guarantor may incur Acquired
Indebtedness if, in each case, the Consolidated Fixed Charge Coverage Ratio for
the Company for the four full fiscal quarters immediately preceding the
incurrence of such Indebtedness taken as one period (and after giving pro forma
--- -----
effect to (i) the incurrence of such Indebtedness and (if applicable) the
application of the net proceeds therefrom, including to refinance other
Indebtedness, as if such Indebtedness was incurred, and the application of such
proceeds occurred, at the beginning of such four-quarter period; (ii) the
incurrence, repayment or retirement of any other Indebtedness by the Company and
its Subsidiaries since the first day of such four-quarter period as if such
Indebtedness was incurred, repaid or retired at the beginning of such four-
quarter period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall be computed based upon
the average daily balance of such Indebtedness during such four-quarter period);
(iii) in the case of Acquired Indebtedness, the related acquisition as if such
acquisition occurred at the beginning of such four-quarter period; and (iv) any
acquisition or disposition by the Company and its Subsidiaries of any company or
any business or any assets out of the ordinary course of business, whether by
merger, stock purchase or sale or asset purchase or sale, as if such acquisition
or disposition occurred at the beginning of such four-quarter period or any
related repayment of Indebtedness, in each case since the first day of such
four-quarter period, assuming such acquisition or disposition had been
consummated on the first day of such four-quarter period) is at least equal to
2.25:1.00.
(b) The foregoing limitation will not apply to the incurrence of any
of the following (collectively "Permitted Indebtedness"):
(i) Indebtedness of the Company and any Subsidiary under the Credit
Agreement in an aggregate principal amount at any one time outstanding not to
exceed (x) $50,000,000 under any term loans made pursuant thereto, minus all
principal payments made in respect of any term loans, (y) $100,000,000 under any
revolving credit facility thereunder and (z) $28,200,000 of "Letter of Credit
Liabilities" (as defined in the Credit Agreement as in effect on the date of the
Original Indenture) in respect to the Barton Letter of Credit, less any
reduction on such "Letter of Credit Liabilities" (whether through payments or
reductions of the face amount of the Barton Letter of Credit);
95
(ii) Indebtedness of the Company pursuant to the Securities and
Indebtedness of any Guarantor pursuant to a Guarantee;
(iii) Indebtedness of the Company or any Subsidiary outstanding on
the date of this Indenture and listed on Schedule I hereto;
(iv) Indebtedness of the Company owing to a Subsidiary; provided that
--------
any Indebtedness of the Company owing to a Subsidiary that is not a Guarantor is
made pursuant to an intercompany note in the form attached to this Indenture as
Exhibit A and is subordinated in right of payment from and after such time as
the Securities shall become due and payable (whether at Stated Maturity,
acceleration or otherwise) to the payment and performance of the Company's
obligations under the Securities; provided further that any disposition, pledge
-------- -------
or transfer of any such Indebtedness to a Person (other than a disposition,
pledge or transfer to a Subsidiary or a pledge to or for the benefit of the
lenders under the Credit Agreement) shall be deemed to be an incurrence of such
Indebtedness by the obligor not permitted by this clause (iv);
(v) Indebtedness of a Wholly Owned Subsidiary owing to the Company
or another Wholly Owned Subsidiary; provided that, with respect to Indebtedness
--------
owing to a Wholly Owned Subsidiary that is not a Guarantor, (x) any such
Indebtedness is made pursuant to an intercompany note in the form attached to
this Indenture as Exhibit A and (y) any such Indebtedness shall be subordinated
in right of payment from and after such time as the obligations under the
Guarantee by such Wholly Owned Subsidiary shall become due and payable to the
payment and performance of such Wholly Owned Subsidiary's obligations under its
Guarantee; provided further that (a) any disposition, pledge or transfer of any
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such Indebtedness to a Person (other than a disposition, pledge or transfer to
the Company or a Wholly Owned Subsidiary or a pledge to or for the benefit of
the lenders under the Credit Agreement) shall be deemed to be an incurrence of
such Indebtedness by the obligor not permitted by this clause (v), and (b) any
transaction pursuant to which any Wholly Owned Subsidiary, which has
Indebtedness owing to the Company or any other Wholly Owned Subsidiary, ceases
to be a Wholly Owned Subsidiary shall be deemed to be the incurrence of
Indebtedness by such Wholly Owned Subsidiary that is not permitted by this
clause (v);
(vi) guarantees of any Subsidiary made in accordance with the
provisions of Section 1014 of this Indenture;
(vii) obligations of the Company entered into in the ordinary course
of business pursuant to Interest Rate Agreements designed to protect the Company
or any Subsidiary against fluctuations in interest rates in respect of
Indebtedness of the Company or any of its Subsidiaries, as long as such
obligations at the time incurred do not exceed the aggregate principal amount of
such Indebtedness then outstanding or in good faith anticipated to be
outstanding within 90 days of such incurrence;
96
(viii) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any Indebtedness
described in clauses (ii) and (iii) of this definition of "Permitted
Indebtedness," including any successive refinancings so long as the aggregate
principal amount of Indebtedness represented thereby is not increased by such
refinancing plus the lesser of (I) the stated amount of any premium, interest or
other payment required to be paid in connection with such a refinancing pursuant
to the terms of the Indebtedness being refinanced or (II) the amount of premium,
interest or other payment actually paid at such time to refinance the
Indebtedness, plus, in either case, the amount of expenses of the Company
incurred in connection with such refinancing and, in the case of Pari Passu
Indebtedness or Subordinated Indebtedness, such refinancing does not reduce the
Average Life to Stated Maturity or the Stated Maturity of such Indebtedness; and
(ix) Indebtedness, in addition to that described in clauses (i)
through (viii) of this definition of "Permitted Indebtedness," and any renewals,
extensions, substitutions, refinancings or replacements of such Indebtedness,
not to exceed $25,000,000 outstanding at any one time in the aggregate.
Section 1009. Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not permit any Subsidiary to,
directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Company's Capital Stock (other than
dividends or distributions payable solely in shares of its Qualified
Capital Stock or in options, warrants or other rights to acquire such
Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of the Capital Stock of the Company
or any Affiliate thereof (other than any Wholly Owned Subsidiary of
the Company) or options, warrants or other rights to acquire such
Capital Stock;
(iii) make any principal payment on, or repurchase, redeem,
defease, retire or otherwise acquire for value, prior to any scheduled
principal payment, sinking fund or maturity, any Pari Passu
Indebtedness or Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Capital
Stock of any Subsidiary to any Person (other than the Company or any
of its Wholly Owned Subsidiaries) or purchase, redeem or otherwise
acquire or retire for value any Capital Stock of any Subsidiary held
by any Person (other than the Company or any of its Wholly Owned
Subsidiaries);
97
(v) incur, create or assume any guarantee of Indebtedness of any
Affiliate (other than a Wholly Owned Subsidiary of the Company); or
(vi) make any Investment in any Person (other than any Permitted
Investments);
(any of the foregoing payments described in clauses (i) through (vi), other than
any such action that is a Permitted Payment, collectively, "Restricted
Payments") unless after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution), (1) no Default or Event of Default shall have
occurred and be continuing and such Restricted Payment shall not be an event
which is, or after notice or lapse of time or both, would be, an "event of
default" under the terms of any Indebtedness of the Company or its Subsidiaries;
(2) immediately before and immediately after giving effect to such transaction
on a pro forma basis, the Company could incur $1.00 of additional Indebtedness
--- -----
(other than Permitted Indebtedness) under the provisions contained in Section
1008; and (3) the aggregate amount of all such Restricted Payments declared or
made after the date of the Original Indenture does not exceed the sum of:
(A) 50% of the aggregate cumulative Consolidated Net Income of the
Company accrued on a cumulative basis during the period beginning on the first
day of the Company's fiscal quarter commencing prior to the date of the Original
Indenture and ending on the last day of the Company's last fiscal quarter ending
prior to the date of the Restricted Payment (or, if such aggregate cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss);
(B) the aggregate Net Cash Proceeds received after the date of the
Original Indenture by the Company from the issuance or sale (other than to any
of its Subsidiaries) of its shares of Qualified Capital Stock or any options,
warrants or rights to purchase such shares of Qualified Capital Stock of the
Company (except, in each case, to the extent such proceeds are used to purchase,
redeem or otherwise retire Capital Stock or Subordinated Indebtedness as set
forth below);
(C) the aggregate Net Cash Proceeds received after the date of the
Original Indenture by the Company (other than from any of its Subsidiaries) upon
the exercise of any options or warrants to purchase shares of Qualified Capital
Stock of the Company; and
(D) the aggregate Net Cash Proceeds received after the date of the
Original Indenture by the Company from debt securities or Redeemable Capital
Stock that have been converted into or exchanged for Qualified Capital Stock of
the Company to the extent such debt securities or Redeemable Capital Stock are
originally sold for cash
98
plus the aggregate Net Cash Proceeds received by the Company at the time of such
conversion or exchange.
(b) Notwithstanding the foregoing, and in the case of clauses (ii),
(iii) and (iv) below, so long as there is no Default or Event of Default
continuing, the foregoing provisions shall not prohibit the following actions
(clauses (i) through (iv) being referred to as "Permitted Payment"):
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration such payment would be
permitted by the provisions of paragraph (a) of this Section and such payment
shall be deemed to have been paid on such date of declaration for purposes of
the calculation required by paragraph (a) of this Section;
(ii) the repurchase, redemption, or other acquisition or
retirement of any shares of any class of Capital Stock of the Company in
exchange for (including any such exchange pursuant to the exercise of a
conversion right or privilege in connection therewith cash is paid in lieu of
the issuance of fractional shares or scrip), or out of the Net Cash Proceeds of,
a substantially concurrent issue and sale for cash (other than to a Subsidiary)
of other shares of Qualified Capital Stock of the Company; provided that the Net
--------
Cash Proceeds from the issuance of such shares of Qualified Capital Stock are
excluded from clause (3)(B) of paragraph (a) of this Section;
(iii) any repurchase, redemption, defeasance, retirement,
refinancing or acquisition for value or payment of principal of any Subordinated
Indebtedness in exchange for, or out of the net proceeds of, a substantially
concurrent issuance and sale for cash (other than to any Subsidiary of the
Company) of any Qualified Capital Stock of the Company, provided that the Net
--------
Cash Proceeds from the issuance of such shares of Qualified Capital Stock are
excluded from clause (3)(B) of paragraph (a) of this Section; and
(iv) the repurchase, redemption, defeasance, retirement,
refinancing or acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Redeemable Capital Stock) (a "refinancing") through the
issuance of new Subordinated Indebtedness of the Company, provided that any such
--------
new Subordinated Indebtedness (1) shall be in a principal amount that does not
exceed the principal amount so refinanced (or, if such Subordinated Indebtedness
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration or acceleration thereof, then such lesser amount as
of the date of determination), plus the lesser of (I) the stated amount of any
premium, interest or other payment required to be paid in connection with such a
refinancing pursuant to the terms of the Indebtedness being refinanced or (II)
the amount of premium, interest or other payment actually paid at such time to
refinance the Indebtedness, plus, in either case, the amount of expenses of the
Company incurred in connection with such refinancing; (2) has an Average Life to
Stated Maturity greater than
99
the remaining Average Life to Stated Maturity of the Securities; (3) has a
Stated Maturity for its final scheduled principal payment later than the Stated
Maturity for the final scheduled principal payment of the Securities; and (4) is
expressly subordinated in right of payment to the Securities at least to the
same extent as the Indebtedness to be refinanced.
Section 1010. Limitation on Transactions with Affiliates.
------------------------------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or suffer to exist any transaction or series
of related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate of the
Company (other than the Company or a Wholly Owned Subsidiary) unless (i) such
transaction or series of transactions is in writing on terms that are no less
favorable to the Company or such Subsidiary, as the case may be, than would be
available in a comparable transaction in arm's-length dealings with an unrelated
third party, (ii) with respect to any transaction or series of transactions
involving aggregate payments in excess of $5,000,000, the Company delivers an
Officers' Certificate to the Trustee certifying that such transaction or series
of related transactions complies with clause (i) above and such transaction or
series of related transactions has been approved by the Board of Directors of
the Company, and (iii) with respect to a transaction or series of related
transactions involving aggregate value in excess of $10,000,000, the Company
delivers to the Trustee an opinion of an independent investment banking firm of
national standing stating that the transaction or series of transactions is fair
to the Company or such Subsidiary; provided, however, that this provision shall
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not apply to any transaction with an officer or director of the Company entered
into in the ordinary course of business (including compensation or employee
benefit arrangements with any officer or director of the Company).
Section 1011. Limitation on Senior Subordinated Indebtedness.
----------------------------------------------
The Company will not, and will not permit any Guarantor to, directly
or indirectly, create, incur, issue, assume, guarantee or otherwise in any
manner become directly or indirectly liable for or with respect to or otherwise
permit to exist any Indebtedness that is subordinate in right of payment to any
Indebtedness of the Company or such Guarantor, as the case may be, unless such
Indebtedness is also pari passu with the Securities or the Guarantee of such
Guarantor or subordinate in right of payment to the Securities or such Guarantee
to at least the same extent as the Securities or such Guarantee are subordinate
in right of payment to Senior Indebtedness or Senior Guarantor Indebtedness, as
the case may be, as set forth in this Indenture.
Section 1012. Limitation on Liens.
-------------------
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, create, incur, affirm or suffer to exist any Lien of any kind
upon any of its
100
property or assets (including any intercompany notes), owned at the date of this
Indenture or acquired after the date of this Indenture, or any income or profits
therefrom, except if the Securities (or a Guarantee, in the case of Liens of a
Guarantor) are directly secured equally and ratably with (or prior to in the
case of Liens with respect to Subordinated Indebtedness or Indebtedness of a
Guarantor subordinated in right of payment to any Guarantee) the obligation or
liability secured by such Lien, excluding, however, from the operation of the
foregoing any of the following:
(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (1) any judgment, decree or order of
any court, so long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired; (2) taxes not
yet delinquent or which are being contested in good faith; (3) security for
payment of workers' compensation or other insurance; (4) good faith deposits in
connection with tenders, leases, contracts (other than contracts for the payment
of money); (5) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of property
or minor irregularities of title (and with respect to leasehold interests,
mortgages, obligations, liens and other encumbrances incurred, created, assumed
or permitted to exist and arising by, through or under a landlord or owner of
the leased property, with or without consent of the lessee), none of which
materially impairs the use of any parcel of property material to the operation
of the business of the Company or any Subsidiary or the value of such property
for the purpose of such business; (6) deposits to secure public or statutory
obligations, or in lieu of surety or appeal bonds; (7) certain surveys,
exceptions, title defects, encumbrances, easements, reservations of, or rights
of others for, rights of way, sewers, electric lines, telegraph or telephone
lines and other similar purposes or zoning or other restrictions as to the use
of real property not interfering with the ordinary conduct of the business of
the Company or any of its Subsidiaries; or (8) operation of law in favor of
mechanics, materialmen, laborers, employees or suppliers, incurred in the
ordinary course of business for sums which are not yet delinquent or are being
contested in good faith by negotiations or by appropriate proceedings which
suspend the collection thereof;
(c) any Lien now or hereafter existing on property of the Company or
any Guarantor securing Senior Indebtedness or Senior Guarantor Indebtedness, in
each case which Indebtedness is permitted under the provisions of Section 1008
and provided that the provisions described under Section 1014 are complied with;
(d) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or any Subsidiary, in each case which Indebtedness
is permitted under the provisions of Section 1008; provided that any such Lien
--------
only extends to the assets that
101
were subject to such Lien securing such Acquired Indebtedness prior to the
related transaction by the Company or its Subsidiaries; and
(e) any extension, renewal, refinancing or replacement, in whole or in
part, of any Lien described in the foregoing clauses (a) through (d) so long as
the amount of security is not increased thereby.
Section 1013. Limitation on Sale of Assets.
----------------------------
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, consummate an Asset Sale unless (i) at least 75% of
the proceeds from such Asset Sale are received in cash and (ii) the Company or
such Subsidiary receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold (other than in the
case of an involuntary Asset Sale, as determined by the Board of Directors of
the Company and evidenced in a Board Resolution).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale are
not required to be applied to repay permanently any Senior Indebtedness or
Senior Guarantor Indebtedness then outstanding as required by the terms thereof,
or the Company determines not to apply such Net Cash Proceeds to the permanent
prepayment of such Senior Indebtedness or Senior Guarantor Indebtedness or if no
such Senior Indebtedness or Senior Guarantor Indebtedness is then outstanding,
then the Company may within twelve months of the Asset Sale, invest the Net Cash
Proceeds in other properties and assets that (as determined by the Board of
Directors of the Company) replace the properties and assets that were the
subject of the Asset Sale or in properties and assets that will be used in the
businesses of the Company or its Subsidiaries existing on the date of the
Original Indenture or reasonably related thereto. The amount of such Net Cash
Proceeds neither used to permanently repay or prepay Senior Indebtedness or
Senior Guarantor Indebtedness nor used or invested as set forth in this
paragraph constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals $10,000,000 or
more, the Company shall apply the Excess Proceeds to the repayment of the
Securities and any Pari Passu Indebtedness required to be repurchased under the
instrument governing such Pari Passu Indebtedness as follows: (a) the Company
shall make an offer to purchase (an "Offer") from all holders of the Securities
in accordance with the procedures set forth in this Indenture in the maximum
principal amount (expressed as a multiple of $1,000) of Securities that may be
purchased out of an amount (the "Security Amount") equal to the product of such
Excess Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Securities, and the denominator of which is
the sum of the outstanding principal amount of the Securities and such Pari
Passu Indebtedness (subject to proration in the event such amount is less than
the aggregate Offered Price (as defined herein) of all Securities tendered) and
(b) to the
102
extent required by such Pari Passu Indebtedness to permanently reduce the
principal amount of such Pari Passu Indebtedness, the Company shall make an
offer to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (
"Pari Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the
excess of the Excess Proceeds over the Security Amount; provided that in no
event shall the Pari Passu Debt Amount exceed the principal amount of such Pari
Passu Indebtedness plus the amount of any premium required to be paid to
repurchase such Pari Passu Indebtedness. The offer price shall be payable in
cash in an amount equal to 100% of the principal amount of the Securities plus
accrued and unpaid interest, if any, to the date (the "Offer Date") such Offer
is consummated (the "Offered Price"), in accordance with the procedures set
forth in this Indenture. To the extent that the aggregate Offered Price of the
Securities tendered pursuant to the Offer is less than the Security Amount
relating thereto or the aggregate amount of Pari Passu Indebtedness that is
purchased is less than the Pari Passu Debt Amount (the amount of such shortfall,
if any, constituting a "Deficiency"), the Company shall use such Deficiency in
the business of the Company and its Subsidiaries. Upon completion of the
purchase of all the Securities tendered pursuant to an Offer and the purchase of
the Pari Passu Indebtedness pursuant to a Pari Passu Offer, the amount of Excess
Proceeds, if any, shall be reset at zero.
(d) Whenever the Excess Proceeds received by the Company exceed
$7,000,000, such Excess Proceeds shall be set aside by the Company in a separate
account pending (i) deposit with the depositary or a Paying Agent of the amount
required to purchase the Securities or Pari Passu Indebtedness tendered in an
Offer or a Pari Passu Offer, (ii) delivery by the Company of the Offered Price
to the Holders or holders of Pari Passu Indebtedness tendered in an Offer or a
Pari Passu Offer and (iii) application, as set forth above, of Excess Proceeds
in the business of the Company and its Subsidiaries. Such Excess Proceeds may
be invested in Temporary Cash Investments, provided that the maturity date of
--------
any such investment made after the amount of Excess Proceeds exceeds $7,000,000
shall not be later than the earlier of three months or the Offer Date, if known.
The Company shall be entitled to any interest or dividends accrued, earned or
paid on such Temporary Cash Investments, provided that the Company shall not
--------
withdraw such interest from the separate account if an Event of Default has
occurred and is continuing.
(e) If the Company becomes obligated to make an Offer pursuant to
clause (c) above, the Securities shall be purchased by the Company, at the
option of the holder thereof, in whole or in part in integral multiples of
$1,000, on a date that is not earlier than 45 days and not later than 60 days
from the date the notice is given to holders, or such later date as may be
necessary for the Company to comply with the requirements under the Exchange
Act, subject to proration in the event the Security Amount is less than the
aggregate Offered Price of all Securities tendered.
103
(f) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
(g) The Company will not, and will not permit any Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions existing under (i) Indebtedness as in effect on the date of this
Indenture as such Indebtedness may be refinanced from time to time, provided
--------
that such restrictions are no less favorable to the Holders of Securities than
those existing on the date of this Indenture or (ii) any Senior Indebtedness and
any Senior Guarantor Indebtedness) that would materially impair the ability of
the Company to make an Offer to purchase the Securities or, if such Offer is
made, to pay for the Securities tendered for purchase.
(h) Subject to paragraph (f) above, within 30 days after the date on
which the amount of Excess Proceeds equals or exceeds $10,000,000, the Company
shall send or cause to be sent by first-class mail, postage prepaid, to the
Trustee and to each Holder of the Securities, at his address appearing in the
Security Register, a notice stating or including:
(1) that the Holder has the right to require the Company to
repurchase, subject to proration, such Holder's Securities at the
Offered Price;
(2) the Offer Date;
(3) the instructions a Holder must follow in order to have its
Securities purchased in accordance with paragraph (c) of this Section;
and
(4) (i) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form 10-Q and
any Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Sales
otherwise described in the offering materials (or corresponding
successor reports) (or in the event the Company is not required to
prepare any of the foregoing Forms, the comparable information
required pursuant to Section 1019), (ii) a description of material
developments in the Company's business subsequent to the date of the
latest of such Reports, (iii) if material, appropriate pro forma
financial information, and (iv) such other information, if any,
concerning the business of the Company which the Company in good faith
believes will enable such Holders to make an informed investment
decision.
104
(i) Holders electing to have Securities purchased hereunder will be
required to surrender such Securities at the address specified in the notice at
least three Business Days prior to the Offer Date. Holders will be entitled to
withdraw their election to have their Securities purchased pursuant to this
Section 1012 if the Company receives, not later than three Business Days prior
to the Offer Date, a telegram, telex, facsimile transmission or letter setting
forth (1) the name of the Holder, (2) the certificate number of the Security in
respect of which such notice of withdrawal is being submitted, (3) the principal
amount of the Security (which shall be $1,000 or an integral multiple thereof)
delivered for purchase by the Holder as to which his election is to be
withdrawn, (4) a statement that such Holder is withdrawing his election to have
such principal amount of such Security purchased, and (5) the principal amount,
if any, of such Security (which shall be $1,000 or an integral multiple thereof)
that remains subject to the original notice of the Offer and that has been or
will be delivered for purchase by the Company.
(j) The Company shall (i) not later than the Offer Date, accept for
payment Securities or portions thereof tendered pursuant to the Offer, (ii) not
later than 10:00 a.m. (New York time) on the Offer Date, deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in same day funds (or New York Clearing House funds if such deposit is
made prior to the Offer Date) sufficient to pay the aggregate Offered Price of
all the Securities or portions thereof which are to be purchased on that date
and (iii) not later than the Offer Date, deliver to the Paying Agent (if other
than the Company) an Officers' Certificate stating the Securities or portions
thereof accepted for payment by the Company.
Subject to applicable escheat laws, as provided in the Securities, the
Trustee and the Paying Agent shall return to the Company any cash that remains
unclaimed, together with interest, if any, thereon, held by them for the payment
of the Offered Price; provided, however, that, (x) to the extent that the
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aggregate amount of cash deposited by the Company with the Trustee in respect of
an Offer exceeds the aggregate Offered Price of the Securities or portions
thereof to be purchased, then the Trustee shall hold such excess for the Company
and (y) unless otherwise directed by the Company in writing, promptly after the
Business Day following the Offer Date the Trustee shall return any such excess
to the Company together with interest or dividends, if any, thereon.
(k) Securities to be purchased shall, on the Offer Date, become due
and payable at the Offered Price and from and after such date (unless the
Company shall default in the payment of the Offered Price) such Securities shall
cease to bear interest. Such Offered Price shall be paid to such Holder
promptly following the later of the Offer Date and the time of delivery of such
Security to the relevant Paying Agent at the office of such Paying Agent by the
Holder thereof in the manner required. Upon surrender of any such Security for
purchase in accordance with the foregoing provisions, such Security shall be
paid by the Company at the Offered Price; provided, however, that installments
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105
of interest whose Stated Maturity is on or prior to the Offer Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Regular Record Dates according to
the terms and the provisions of Section 307; provided further that Securities to
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be purchased are subject to proration in the event the Excess Proceeds are less
than the aggregate Offered Price of all Securities tendered for purchase, with
such adjustments as may be appropriate by the Trustee so that only Securities in
denominations of $1,000 or integral multiples thereof, shall be purchased. If
any Security tendered for purchase shall not be so paid upon surrender thereof
by deposit of funds with the Trustee or a Paying Agent in accordance with
paragraph (j) above, the principal thereof (and premium, if any, thereon) shall,
until paid, bear interest from the Offer Date at the rate borne by such
Security. Any Security that is to be purchased only in part shall be
surrendered to a Paying Agent at the office of such Paying Agent (with, if the
Company, the Security Registrar or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Security Registrar or the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, one or more new Securities of any authorized
denomination as requested by such Holder in an aggregate principal amount equal
to, and in exchange for, the portion of the principal amount of the Security so
surrendered that is not purchased.
Section 1014. Limitation on Issuances of Guarantees of and Pledges
----------------------------------------------------
for Indebtedness.
- ----------------
(a) The Company will not permit any Subsidiary, other than the
Guarantors, directly or indirectly, to secure the payment of any Senior
Indebtedness of the Company and the Company will not, and will not permit a
Subsidiary to, pledge any intercompany notes representing obligations of any
Subsidiary (other than a Guarantor) to secure the payment of any Senior
Indebtedness unless (x) such Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a guarantee of payment of
the Securities by such Subsidiary, which guarantee shall be on the same terms as
the guarantee of the Senior Indebtedness (if a guarantee of Senior Indebtedness
is granted by any such Subsidiary) except that the guarantee of the Securities
need not be secured and shall be subordinated to the claims against such
Subsidiary in respect of Senior Indebtedness to the same extent as the
Securities are subordinated to Senior Indebtedness of the Company under this
Indenture and (y) such Subsidiary waives and will not in any manner whatsoever
claim or take the benefit or advantage of any rights of reimbursement, indemnity
or subrogation or any other rights the Company or any other Subsidiary as a
result of any payment by such Subsidiary under its guarantee.
(b) The Company will not permit any Subsidiary, other than the
Guarantors, directly or indirectly, to guarantee, assume or in any other manner
become liable with respect to any Indebtedness of the Company unless (i) such
Subsidiary
106
simultaneously executes and delivers a supplemental indenture to this
Indenture providing for a guarantee of the Securities on the same terms as the
guarantee of such Indebtedness except that (A) such guarantee need not be
secured unless required pursuant to Section 1012, (B) if the Securities are
subordinated in right of payment to such Indebtedness, the guarantee under the
supplemental indenture shall be subordinated to the guarantee of such
Indebtedness to the same extent as the Securities are subordinated to such
Indebtedness under this Indenture and (C) if such Indebtedness is by its terms
expressly subordinated to the Securities, any such assumption, guarantee or
other liability of such Subsidiary with respect to such Indebtedness shall be
subordinated to such Subsidiary's assumption, guarantee or other liability with
respect to the Securities to the same extent as such Indebtedness is
subordinated to the Securities and (ii) such Subsidiary waives and will not in
any manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary as a result of any payment by such Subsidiary under its
Guarantee.
(c) Each guarantee created pursuant to the provisions described in the
foregoing paragraph is referred to as a "Guarantee" and the issuer of each such
Guarantee is referred to as a "Guarantor." Notwithstanding the foregoing, any
Guarantee by a Subsidiary of the Securities shall provide by its terms that it
shall be automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company's Capital Stock in, or all or substantially all the assets
of, such Subsidiary, which is in compliance with the terms of this Indenture or
(ii) the release by the holders of the Indebtedness of the Company described in
clauses (a) and (b) above of their security interest or their guarantee by such
Subsidiary (including any deemed release upon payment in full of all obligations
under such Indebtedness), at a time when (A) no other Indebtedness of the
Company has been secured or guaranteed by such Subsidiary, as the case may be,
or (B) the holders of all such other Indebtedness which is secured or guaranteed
by such Subsidiary also release their security interest in, or guarantee by,
such Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness).
Section 1015. Restriction on Transfer of Assets.
---------------------------------
The Company will not sell, convey, transfer or otherwise dispose of
its assets or property to any of its Subsidiaries (other than to the
Guarantors), except for sales, conveyances, transfers or other dispositions made
in the ordinary course of business. For purposes of this Section 1015, any
sale, conveyance, transfer, lease or other disposition of property or assets,
having a Fair Market Value in excess of (a) $2,000,000 for any sale, conveyance,
transfer or disposition or series of related sales, conveyances, transfers,
leases and dispositions and (b) $10,000,000 in the aggregate for all such sales,
conveyances, transfers, leases or dispositions in any fiscal year of the Company
shall not be considered "in the ordinary course of business."
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Section 1016. Purchase of Securities upon a Change of Control.
-----------------------------------------------
(a) If a Change of Control shall occur at any time, then each Holder
shall have the right to require that the Company purchase such Holder's
Securities in whole or in part in integral multiples of $1,000, at a purchase
price (the "Change of Control Purchase Price") in cash in an amount equal to
101% of the principal amount of such Securities, plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control Purchase
Date"), pursuant to the offer described in subsection (c) of this Section (the
"Change of Control Offer") and in accordance with the procedures set forth in
Subsections (b), (c), (d) and (e) of this Section.
(b) Within 15 days following any Change of Control, the Company shall
notify the Trustee thereof and give written notice (a "Change of Control
Purchase Notice") of such Change of Control to each Holder by first-class mail,
postage prepaid, at his address appearing in the Security Register stating or
including:
(1) that a Change of Control has occurred, the date of such
event, and that such Holder has the right to require the Company to
repurchase such Holder's Securities at the Change of Control Purchase
Price;
(2) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro
---
forma historical income, cash flow and capitalization after giving
-----
effect to such Change of Control, if any);
(3) (i) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form 10-Q, as
applicable, and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report (or in the event the Company is
not required to prepare any of the foregoing Forms, the comparable
information required to be prepared by the Company and any Guarantor
pursuant to Section 1019), (ii) a description of material developments
in the Company's business subsequent to the date of the latest of such
reports and (iii) such other information, if any, concerning the
business of the Company which the Company in good faith believes will
enable such Holders to make an informed investment decision;
(4) that the Change of Control Offer is being made pursuant to
this Section 1016(a) and that all Securities properly tendered
pursuant to the Change of Control Offer will be accepted for payment
at the Change of Control Purchase Price;
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(5) the Change of Control Purchase Date which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act;
(6) the Change of Control Purchase Price;
(7) the names and addresses of the Paying Agent and the offices
or agencies referred to in Section 1002;
(8) that Securities must be surrendered on or prior to the Change
of Control Purchase Date to the Paying Agent at the office of the
Paying Agent or to an office or agency referred to in Section 1002 to
collect payment;
(9) that the Change of Control Purchase Price for any Security
which has been properly tendered and not withdrawn will be paid
promptly following the Change of Control Offer Purchase Date;
(10) the procedures for withdrawing a tender of Securities and
Change of Control Purchase Notice;
(11) that any Security not tendered will continue to accrue
interest; and
(12) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Security accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date.
(c) Upon receipt by the Company of the proper tender of Securities,
the Holder of the Security in respect of which such proper tender was made shall
(unless the tender of such Security is properly withdrawn) thereafter be
entitled to receive solely the Change of Control Purchase Price with respect to
such Security. Upon surrender of any such Security for purchase in accordance
with the foregoing provisions, such Security shall be paid by the Company at the
Change of Control Purchase Price; provided, however, that installments of
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interest whose Stated Maturity is on or prior to the Change of Control Purchase
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 307. If any Security
tendered for purchase shall not be so paid upon surrender thereof, the principal
thereof (and premium, if any, thereon) shall, until paid, bear interest from the
Change of Control Purchase Date at the rate borne by such Security. Holders
electing to have Securities purchased will be required to surrender such
Securities to the Paying Agent at the address specified in the Change of Control
Purchase Notice at least two Business Days prior to the Change of
109
Control Purchase Date. Any Security that is to be purchased only in part shall
be surrendered to a Paying Agent at the office of such Paying Agent (with, if
the Company, the Security Registrar or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Security Registrar or the Trustee, as the case may be, duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing), and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, one or more new Securities of
any authorized denomination as requested by such Holder in an aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Security so surrendered that is not purchased.
(d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) not later than 11:00 a.m. (New
York time) on the Change of Control Purchase Date, deposit with the Paying Agent
an amount of cash sufficient to pay the aggregate Change of Control Purchase
Price of all the Securities or portions thereof which are to be purchased as of
the Change of Control Purchase Date and (iii) not later than the Change of
Control Purchase Date, deliver to the Paying Agent an Officers' Certificate
stating the Securities or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the Change of Control Purchase Price of
the Securities purchased from each such Holder, and the Company shall execute
and the Trustee shall promptly authenticate and mail or deliver to such Holders
a new Security equal in principal amount to any unpurchased portion of the
Security surrendered. Any Securities not so accepted shall be promptly mailed
or delivered by the Paying Agent at the Company's expense to the Holder thereof.
The Company will publicly announce the results of the Change of Control Offer on
the Change of Control Purchase Date. For purposes of this Section 1016, the
Company shall choose a Paying Agent which shall not be the Company.
(e) A Change of Control Purchase Notice may be withdrawn before or
after delivery by the Holder to the Paying Agent at the office of the Paying
Agent of the Security to which such Change of Control Purchase Notice relates,
by means of a written notice of withdrawal delivered by the Holder to the Paying
Agent at the office of the Paying Agent or to the office or agency referred to
in Section 1002 to which the related Change of Control Purchase Notice was
delivered not later than three Business Days prior to the Change of Control
Purchase Date specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in respect of which
such notice of withdrawal is being submitted;
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(3) the principal amount of the Security (which shall be $1,000
or an integral multiple thereof) delivered for purchase by the Holder
as to which such notice of withdrawal is being submitted; and
(4) the principal amount, if any, of such Security (which shall
be $1,000 or an integral multiple thereof) that remains subject to the
original Change of Control Purchase Notice and that has been or will
be delivered for purchase by the Company.
(f) Subject to applicable escheat laws, as provided in the Securities,
the Trustee and the Paying Agent shall return to the Company any cash that
remains unclaimed, together with interest or dividends, if any, thereon, held by
them for the payment of the Change of Control Purchase Price; provided, however,
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that, (x) to the extent that the aggregate amount of cash deposited by the
Company pursuant to clause (ii) of paragraph (d) above exceeds the aggregate
Change of Control Purchase Price of the Securities or portions thereof to be
purchased, then the Trustee shall hold such excess for the Company and (y)
unless otherwise directed by the Company in writing, promptly after the Business
Day following the Change of Control Purchase Date the Trustee shall return any
such excess to the Company together with interest, if any, thereon.
(g) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with a Change of Control Offer.
(h) The Company will not, and will not permit any Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions existing under Indebtedness as in effect on the date of this
Indenture) that would materially impair the ability of the Company to make a
Change of Control Offer to purchase the Securities or, if such Change of Control
Offer is made, to pay for the Securities tendered for purchase.
Section 1017. Limitation on Subsidiary Capital Stock.
--------------------------------------
The Company will not permit any Subsidiary of the Company to issue any
Capital Stock, except for (i) Capital Stock issued to and held by the Company or
a Wholly Owned Subsidiary, and (ii) Capital Stock issued by a Person prior to
the time (A) such Person becomes a Subsidiary, (B) such Person merges with or
into a Subsidiary or (C) a Subsidiary merges with or into such Person, provided
--------
that such Capital Stock was not issued or incurred by such Person in
anticipation of the type of transaction contemplated by subclauses (A), (B) or
(C).
111
Section 1018. Limitation on Dividends and Other Payment Restrictions
------------------------------------------------------
Affecting Subsidiaries.
- ----------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary of the
Company to (i) pay dividends or make any other distribution on its Capital
Stock, (ii) pay any Indebtedness owed to the Company or a Subsidiary of the
Company, (iii) make any Investment in the Company or a Subsidiary of the Company
or (iv) transfer any of its properties or assets to the Company or any
Subsidiary, except (a) any encumbrance or restriction pursuant to an agreement
in effect on the date of this Indenture and listed on Schedule II hereto; (b)
any encumbrance or restriction, with respect to a Subsidiary that was not a
Subsidiary of the Company on the date of this Indenture in existence at the time
such Person becomes a Subsidiary of the Company and, in the case of clauses (a)
and (b), not incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary; (c) any encumbrance or restriction existing under any
agreement that extends, renews, refinances or replaces the agreements containing
the encumbrances or restrictions in the foregoing clauses (a) and (b), or in
this clause (c), provided that the terms and conditions of any such encumbrances
--------
or restrictions are not materially less favorable to the holders of the
Securities than those under or pursuant to the agreement evidencing the
Indebtedness so extended, renewed, refinanced or replaced (except that an
encumbrance or restriction that is not more restrictive than those set forth in
this Indenture shall in any event be permitted hereunder); and (d) any
encumbrance or restriction created pursuant to an asset sale agreement, stock
sale agreement or similar instrument pursuant to which an Asset Sale permitted
under Section 1013 is to be consummated, so long as such restriction or
encumbrance shall be effective only for a period from the execution and delivery
of such agreement or instrument through a termination date not later than 270
days after such execution and delivery.
Section 1019. Provision of Financial Statements.
---------------------------------
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, the Company will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to such Sections 13(a) or 15(d) if the Company were so subject, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so subject. The Company will also in
any event (x) within 15 days of each Required Filing Date (i) transmit by mail
to all Holders, as their names and addresses appear in the Security Register,
without cost to such Holders and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to Section 13(a) or 15(d) of the
112
Exchange Act if the Company were subject to such Sections and (y) if filing such
documents by the Company with the Commission is not permitted under the Exchange
Act, promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of such documents to any prospective
Holder at the Company's cost.
Section 1020. Statement by Officers as to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, on or before a date not
more than 60 days after the end of each fiscal quarter and not more than 120
days after the end of each fiscal year of the Company ending after the date
hereof, a written statement signed by two executive officers of the Company, one
of whom shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating whether or not, after a
review of the activities of the Company during such year or such quarter and of
the Company's performance under this Indenture, to the best knowledge, based on
such review, of the signers thereof, the Company has fulfilled all its
obligations and is in compliance with all conditions and covenants under this
Indenture throughout such year or quarter, as the case may be, and, if there has
been a Default specifying each Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Subsidiary gives any
notice or takes any other action with respect to a claimed default (other than
with respect to Indebtedness in the principal amount of less than $10,000,000),
the Company shall deliver to the Trustee by registered or certified mail or
facsimile transmission followed by hard copy an Officers' Certificate specifying
such Default, Event of Default, notice or other action within five Business Days
of its occurrence.
Section 1021. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1005 through 1012, 1015 and 1017
through 1019, if, before or after the time for such compliance, the Holders of
not less than a majority in aggregate principal amount of the Securities at the
time Outstanding or shall, by Act of such Holders, waive such compliance in such
instance with such covenant or condition, but no such waiver shall extend to or
affect such covenant or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such covenant or condition shall remain
in full force and effect.
113
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.
--------------------
The Securities may be redeemed at the election of the Company, in
whole or in part, at any time on or after December 15, 1998, subject to the
conditions, and at the Redemption Prices, specified in the form of Security,
together with accrued and unpaid interest, if any, to the Redemption Date.
Notwithstanding the preceding paragraph, the Company will not be
permitted to redeem the Original Securities unless, substantially concurrently
with such redemption, the Company redeems an aggregate principal amount of
Securities (rounded to the nearest integral multiple of $1,000) equal to the
product of (1) a fraction, the numerator of which is the aggregate principal
--------
amount of Original Securities to be so redeemed and the denominator of which is
the aggregate principal amount of Original Securities outstanding immediately
prior to such proposed redemption, and (2) the aggregate principal amount of
Securities outstanding immediately prior to such proposed redemption.
Section 1102. Applicability of Article.
------------------------
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
Section 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Company Order and an Officers' Certificate.
In case of any redemption at the election of the Company, the Company shall, not
less than 45 nor more than 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice period shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date and of the principal
amount of Securities to be redeemed.
Section 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than 30
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities not previously called for redemption, pro rata, by lot or such other
method as the Trustee shall deem fair and reasonable, and the amounts to be
redeemed may be equal to $1,000 or any integral multiple thereof.
114
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
Section 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date upon
surrender of such Security, new Security or Securities in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof, and that (unless the
Company shall default in payment of the Redemption Price) interest thereon shall
cease to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered
for payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such Securities; provided,
however, that no representation is required to be made or will be deemed to be
made by the Trustee as to the correctness of the CUSIP number as contained in
said notice.
115
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
Section 1106. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in same day funds sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on,
all the Securities or portions thereof which are to be redeemed on that date.
All money earned on funds held in trust by the Trustee or any Paying Agent shall
be remitted to the Company.
Section 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price together with accrued interest to
the Redemption Date; provided, however, that installments of interest whose
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Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such on the relevant Regular Record Dates according to the terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by such
Security.
Section 1108. Securities Redeemed or Purchased in Part.
----------------------------------------
Any Security which is to be redeemed or purchased only in part shall
be surrendered to the Paying Agent at the office or agency maintained for such
purpose pursuant to Section 1002 (with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Security Registrar or the
Trustee duly executed by, the Holder thereof
116
or such Holder's attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed or purchased.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
Section 1201. Securities Subordinate to Senior Indebtedness.
---------------------------------------------
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article, the Indebtedness
represented by the Securities and the payment of the principal of, premium, if
any, and interest on each and all of the Securities and all other Indenture
Obligations are hereby expressly made subordinate and subject in right of
payment as provided in this Article to the prior payment in full, in cash or
Cash Equivalents or in any other form acceptable to the holders of Senior
Indebtedness, of all Senior Indebtedness.
This Article Twelve shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold
Senior Indebtedness; and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 1202. Payment Over of Proceeds Upon Dissolution, etc.
----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of the Company, then and in any
such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents or in any other form acceptable to
the holders of Senior Indebtedness, of all amounts due on or in respect of all
Senior Indebtedness, before the Holders of the Securities are entitled to
receive any payment or distribution of any kind or character (excluding
Permitted Junior Securities) on account of the principal of, premium, if any, or
interest on the Securities or any other Indenture Obligations; and
117
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (excluding Permitted
Junior Securities), by set-off or otherwise, to which the Holders or the Trustee
would be entitled but for the provisions of this Article shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash or Cash Equivalents or in any
other form acceptable to the holders of Senior Indebtedness, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, in respect of principal, premium, if
any, and interest on the Securities or any other Indenture Obligations before
all Senior Indebtedness is paid in full, then and in such event such payment or
distribution (excluding Permitted Junior Securities) shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full
in cash or Cash Equivalents or in any other form acceptable to the holders of
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of the Company's properties or assets to another Person
upon the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshaling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or the
surviving entity of such merger or the Person which acquires by sale,
assignment, conveyance, transfer, lease or other disposal of all or
substantially all of the Company's properties or assets, as the case may be,
shall, as a part of such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposal, comply with the conditions set forth in
Article Eight.
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Section 1203. Suspension of Payment When Senior Indebtedness in
-------------------------------------------------
Default.
- -------
(a) Unless Section 1202 shall be applicable, upon the occurrence of a
Payment Default, no payment (other than any payments previously made pursuant to
the provisions described in Article Four) or distribution of any assets of the
Company of any kind or character (excluding Permitted Junior Securities) shall
be made by the Company on account of principal of, premium, if any, or interest
on, the Securities or any other Indenture Obligations or on account of the
purchase, redemption, defeasance (whether under Section 402 or 403) or other
acquisition of or in respect of the Securities unless and until such Payment
Default shall have been cured or waived or shall have ceased to exist or the
Designated Senior Indebtedness with respect to which such Payment Default shall
have occurred shall have been discharged or paid in full in cash or Cash
Equivalents or in any other form acceptable to the holders of such Senior
Indebtedness, after which the Company shall resume making any and all required
payments in respect of the Securities, including any missed payments.
(b) Unless Section 1202 shall be applicable, upon (1) the occurrence
of a Non-payment Default and (2) receipt by the Trustee and the Company from a
representative of the holders of Designated Senior Indebtedness (a "Senior
Representative") of written notice of such occurrence, no payment (other than
any payments previously made pursuant to the provisions described in Article
Four) or distribution of any assets of the Company of any kind or character
(excluding Permitted Junior Securities) shall be made by the Company on account
of any principal of, premium, if any, or interest on, the Securities or any
other Indenture Obligations or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of Securities for a period
("Payment Blockage Period") commencing on the date of receipt by the Trustee of
such notice unless and until the earliest of (subject to any blockage of
payments that may then or thereafter be in effect under subsection (a) of this
Section 1203) (x) 179 days having elapsed since receipt of such written notice
by the Trustee (provided any Designated Senior Indebtedness as to which notice
was given shall theretofore have not been accelerated), (y) the date such Non-
payment Default and all other Non-payment Defaults as to which notice is also
given after such period is initiated shall have been cured or waived or shall
have ceased to exist or the Senior Indebtedness related thereto shall have been
discharged or paid in full in cash or Cash Equivalents or in any other form as
acceptable to the holders of Senior Indebtedness, or (z) the date on which such
Payment Blockage Period (and all Non-Payment Defaults as to which notice is
given after such Payment Blockage Period is initiated) shall have been
terminated by written notice to the Company or the Trustee from the Senior
Representative or the holders of at least a majority of the Designated Senior
Indebtedness that initiated such Payment Blockage Period, after which, in each
such case, the Company shall resume making any and all required payments in
respect of the Securities, including any missed payments. Notwithstanding any
other provision of this Indenture, in no event shall a
119
Payment Blockage Period extend beyond 179 days from the date of the receipt by
the Company or the Trustee of the notice referred to in clause (2) of this
paragraph (b) (the"Initial Blockage Period"). Any number of notices of Non-
Payment Defaults may be given during the Initial Blockage Period; provided that
------
during any 365-day consecutive period only one Payment Blockage Period during
which payment of principal of, or interest on, the Securities may not be made
may commence and the duration of the Payment Blockage Period may not exceed 179
days. No Non-payment Default with respect to Designated Senior Indebtedness
which existed or was continuing on the date of the commencement of any Payment
Blockage Period will be, or can be, made the basis for the commencement of a
second Payment Blockage Period, whether or not within a period of 365
consecutive days, unless such default shall have been cured or waived for a
period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, then and in such event such payment
shall be paid over and delivered forthwith to a Senior Representative of the
holders of the Designated Senior Indebtedness or as a court of competent
jurisdiction shall direct.
Section 1204. Payment Permitted if No Default.
-------------------------------
Nothing contained in this Article, elsewhere in this Indenture or in
any of the Securities shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 1202 or under the conditions
described in Section 1203, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
Section 1205. Subrogation to Rights of Holders of Senior
------------------------------------------
Indebtedness.
Subject to the payment in full of all Senior Indebtedness in cash or
Cash Equivalents or in any other form acceptable to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of, premium, if any, and interest on the Securities shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of Senior Indebtedness of any cash, property or securities to which the
Holders or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
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Section 1206. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 1202, to receive,
pursuant to and in accordance with such Section, cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 1203, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 1203(c).
Section 1207. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the Indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved.
Section 1208. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act by any such holder, or by any non-
compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Subsection (a) of this Section
and notwithstanding any other provision contained herein, the holders of Senior
Indebtedness
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may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders of the Securities, without incurring responsibility to
the Holders of the Securities and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
Holders of the Securities to the holders of Senior Indebtedness, do any one or
more of the following: (1) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; provided, however, that in no
-------- -------
event shall any such actions limit the right of the Holders of the Securities to
take any action to accelerate the maturity of the Securities in accordance with
the provisions set forth in Article Five or to pursue any rights or remedies
under this Indenture or under applicable laws if the taking of such action does
not otherwise violate the terms of this Article.
Section 1209. Notice to Trustee.
-----------------
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities or other Indenture Obligations.
Notwithstanding the provisions of this Article or any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness or
from a Senior Representative or any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided, however, that if
-------- -------
the Trustee shall not have received the notice provided for in this Section
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Security or other Indenture Obligations),
then, anything herein contained to the contrary notwithstanding but without
limiting the rights and remedies of the holders of Senior Indebtedness or any
trustee, fiduciary or agent thereof, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it after such date; nor shall the Trustee be charged
with knowledge of the curing of any such default or the elimination of the act
or condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.
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(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and the Company by a Person representing himself
to be a Senior Representative or a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor) to establish that such notice has been given by a
Senior Representative or a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor); provided, however, that failure to give such
-------- -------
notice to the Company shall not affect in any way the ability of the Trustee to
rely on such notice. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 1210. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent.
- -----------------
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article, provided that the foregoing shall apply only if such court has
--------
been fully apprised of the provisions of this Article.
Section 1211. Rights of Trustee as a Holder of Senior Indebtedness;
-----------------------------------------------------
Preservation of Trustee's Rights.
- --------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 606.
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Section 1212. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
--------
however, that Section 1211 shall not apply to the Company or any Affiliate of
- -------
the Company if it or such Affiliate acts as Paying Agent.
Section 1213. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Securities to take any action to accelerate the maturity of
the Securities pursuant to Article Five and as set forth in this Indenture or to
pursue any rights or remedies hereunder or under applicable law, subject to the
rights, if any, under this Article of the holders, from time to time, of Senior
Indebtedness to receive the cash, property or securities receivable upon the
exercise of such rights or remedies.
Section 1214. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Article against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall mistakenly in the
absence of gross negligence or willful misconduct pay over or deliver to
Holders, the Company or any other Person moneys or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 1301. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
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(1) all the Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 or
(ii) all Securities for whose payment United States dollars have
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the
Trustee cancelled or for cancellation; or
(2) all such Securities not theretofore delivered to the Trustee
cancelled or for cancellation (x) have become due and payable, (y)
will become due and payable at their Stated Maturity within one year,
or (z) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company, and the Company or any Guarantor has irrevocably deposited or
caused to be deposited with the Trustee in trust for the purpose an
amount in United States dollars sufficient to pay and discharge the
entire Indebtedness on the Securities not theretofore delivered to the
Trustee cancelled or for cancellation, for the principal of, premium,
if any, and accrued interest at such Stated Maturity or Redemption
Date;
(b) the Company or any Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company or any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel stating that (i) all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and (ii) such satisfaction and discharge will not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Guarantor is
a party or by which the Company or any Guarantor is bound.
Opinions of Counsel required to be delivered under this Section may
have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of Subsection (a) of this Section, the obligations of the Trustee under
Section 1302 and the last paragraph of Section 1003 shall survive.
125
Section 1302. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars deposited with the Trustee pursuant to Section 1301 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal of,
premium, if any, and interest on the Securities for whose payment such United
States dollars have been deposited with the Trustee, but such money need not be
segregated from other funds except to the extent required by law or GAAP.
ARTICLE FOURTEEN
GUARANTEES
Section 1401. Guarantors' Guarantee.
---------------------
For value received, each of the Guarantors, in accordance with this
Article Fourteen, hereby absolutely, unconditionally and irrevocably guarantees,
jointly and severally, to the Trustee and the Holders, as if the Guarantors were
the principal debtor, the punctual payment and performance when due of all
Indenture Obligations (which for purposes of this Guarantee shall also be deemed
to include all commissions, fees, charges, costs and other expenses (including
reasonable legal fees and disbursements of one counsel) arising out of or
incurred by the Trustee or the Holders in connection with the enforcement of
this Guarantee).
Section 1402. Continuing Guarantee; No Right of Set-Off; Independent
------------------------------------------------------
Obligation.
- ----------
(a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Each Guarantor, jointly and severally, covenants and
agrees to comply with all obligations, covenants, agreements and provisions
applicable to it in this Indenture including those set forth in Article Eight.
Without limiting the generality of the foregoing, each of the Guarantors'
liability shall extend to all amounts which constitute part of the Indenture
Obligations and would be owed by the Company under this Indenture and the
Securities but for the fact that they are unenforceable, reduced, limited,
impaired, suspended or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company.
126
(b) Each Guarantor, jointly and severally, hereby guarantees that the
Indenture Obligations will be paid to the Trustee without set-off or
counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in lawful currency of the United States of America.
(c) Each Guarantor, jointly and severally, guarantees that the
Indenture Obligations shall be paid strictly in accordance with their terms
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the holders of the
Securities.
(d) Each Guarantor's liability to pay or perform or cause the
performance of the Indenture Obligations under this Guarantee shall arise
forthwith after demand for payment or performance by the Trustee has been given
to the Guarantors in the manner prescribed in Section 106 hereof.
(e) Except as provided herein, the provisions of this Article Fourteen
cover all agreements between the parties hereto relative to this Guarantee and
none of the parties shall be bound by any representation, warranty or promise
made by any Person relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been delivered by
each Guarantor free of any conditions whatsoever and that no representations,
warranties or promises have been made to any Guarantor affecting its liabilities
hereunder, and that the Trustee shall not be bound by any representations,
warranties or promises now or at any time hereafter made by the Company to any
Guarantor.
Section 1403. Guarantee Absolute.
------------------
The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Securities and this Indenture and a
separate action or actions may be brought and prosecuted against any Guarantor
whether or not an action or proceeding is brought against the Company and
whether or not the Company is joined in any such action or proceeding. The
liability of the Guarantors hereunder is irrevocable, absolute and unconditional
and (to the extent permitted by law) the liability and obligations of the
Guarantors hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
(a) any defect or lack of validity or enforceability in respect of any
Indebtedness or other obligation of the Company or any other
Person under this Indenture or the Securities, or any agreement or
instrument relating to any of the foregoing;
(b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the Trustee or the Holders may
extend to, or make with, the Company, any Guarantor or any other
127
Person, or any change in the time, manner or place of payment of,
or in any other term of, all or any of the Indenture Obligations,
or any other amendment or waiver of, or any consent to or
departure from, this Indenture or the Securities, including any
increase or decrease in the Indenture Obligations;
(c) the taking of security from the Company, any Guarantor or any
other Person, and the release, discharge or alteration of, or
other dealing with, such security;
(d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of
any governmental authority or court amending, varying, reducing or
otherwise affecting, or purporting to amend, vary, reduce or
otherwise affect, any of the Indenture Obligations and the
obligations of any Guarantor hereunder;
(e) the abstention from taking security from the Company, any
Guarantor or any other Person or from perfecting, continuing to
keep perfected or taking advantage of any security;
(f) any loss, diminution of value or lack of enforceability of any
security received from the Company, any Guarantor or any other
Person, and including any other guarantees received by the
Trustee;
(g) any other dealings with the Company, any Guarantor or any other
Person, or with any security;
(h) the Trustee's or the Holders' acceptance of compositions from the
Company or any Guarantor;
(i) the application by the Holders or the Trustee of all monies at any
time and from time to time received from the Company, any
Guarantor or any other Person on account of any indebtedness and
liabilities owing by the Company or any Guarantor to the Trustee
or the Holders, in such manner as the Trustee or the Holders deems
best and the changing of such application in whole or in part and
at any time or from time to time, or any manner of application of
collateral, or proceeds thereof, to all or any of the Indenture
Obligations, or the manner of sale of any Collateral;
(j) the release or discharge of the Company or any Guarantor of the
Securities or of any Person liable directly as surety or otherwise
by
128
operation of law or otherwise for the Securities, other than an
express release in writing given by the Trustee, on behalf of the
Holders, of the liability and obligations of any Guarantor
hereunder;
(k) any change in the name, business, capital structure or governing
instrument of the Company or any Guarantor or any refinancing or
restructuring of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business or any part
thereof;
(m) subject to Section 1414, any merger or consolidation, arrangement
or reorganization of the Company, any Guarantor, any Person
resulting from the merger or consolidation of the Company or any
Guarantor with any other Person or any other successor to such
Person or merged or consolidated Person or any other change in the
corporate existence, structure or ownership of the Company or any
Guarantor;
(n) the insolvency, bankruptcy, liquidation, winding-up, dissolution,
receivership or
distribution of the assets of the Company or its assets or any
resulting discharge of any obligations of the Company (whether
voluntary or involuntary) or of any Guarantor or the loss of
corporate existence;
(o) subject to Section 1414, any arrangement or plan of reorganization
affecting the Company or any Guarantor;
(p) any other circumstance (including any statute of limitations) that
might otherwise constitute a defense available to, or discharge
of, the Company or any Guarantor; or
(q) any modification, compromise, settlement or release by the
Trustee, or by operation of law or otherwise, of the Indenture
Obligations or the liability of the Company or any other obligor
under the Securities, in whole or in part, and any refusal of
payment by the Trustee, in whole or in part, from any other
obligor or other guarantor in connection with any of the Indenture
Obligations, whether or not with notice to, or further assent by,
or any reservation of rights against, each of the Guarantors.
129
Section 1404. Right to Demand Full Performance
--------------------------------
In the event of any demand for payment or performance by the Trustee
from any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all dividends or other payments in respect
thereof until the Indenture Obligations have been paid in full, and the
Guarantors shall continue to be jointly and severally liable hereunder for any
balance which may be owing to the Trustee or the Holders by the Company under
this Indenture and the Securities. The retention by the Trustee or the Holders
of any security, prior to the realization by the Trustee or the Holders of its
rights to such security upon foreclosure thereon, shall not, as between the
Trustee and any Guarantor, be considered as a purchase of such security, or as
payment, satisfaction or reduction of the Indenture Obligations due to the
Trustee or the Holders by the Company or any part thereof.
Section 1405. Waivers.
-------
(a) Each Guarantor hereby expressly waives (to the extent permitted by
law) notice of the acceptance of this Guarantee and notice of the existence,
renewal, extension or the non-performance, non-payment, or non-observance on the
part of the Company of any of the terms, covenants, conditions and provisions of
this Indenture or the Securities or any other notice whatsoever to or upon the
Company or such Guarantor with respect to the Indenture Obligations. Each
Guarantor hereby acknowledges communication to it of the terms of this Indenture
and the Securities and all of the provisions therein contained and consents to
and approves the same. Each Guarantor hereby expressly waives (to the extent
permitted by law) diligence, presentment, protest and demand for payment.
(b) Without prejudice to any of the rights or recourses which the
Trustee or the Holders may have against the Company, each Guarantor hereby
expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:
(i) initiate or exhaust any rights, remedies or recourse
against the Company, any Guarantor or any other Person;
(ii) value, realize upon, or dispose of any security of the
Company or any other Person held by the Trustee or the
Holders; or
(iii) initiate or exhaust any other remedy which the Trustee
or the Holders may have in law or equity;
before requiring or becoming entitled to demand payment from such Guarantor
under this Guarantee.
130
Section 1406. The Guarantors Remain Obligated in Event the Company Is
-------------------------------------------------------
No Longer Obligated to Discharge Indenture Obligations.
- ------------------------------------------------------
It is the express intention of the Trustee and the Guarantors that if
for any reason the Company has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable from the Company by
operation of law or for any reason whatsoever, this Guarantee and the covenants,
agreements and obligations of the Guarantors contained in this Article Fourteen
shall nevertheless be binding upon the Guarantors, as principal debtor, until
such time as all such Indenture Obligations have been paid in full to the
Trustee and all Indenture Obligations owing to the Trustee or the Holders by the
Company have been discharged, or such earlier time as Section 402 shall apply to
the Securities and the Guarantors shall be responsible for the payment thereof
to the Trustee or the Holders upon demand.
Section 1407. Fraudulent Conveyance; Subrogation.
----------------------------------
(a) Any term or provision of this Guarantee to the contrary
notwithstanding, the aggregate amount of the Indenture Obligations guaranteed
hereunder shall be reduced to the extent necessary to prevent this Guarantee
from violating or becoming voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
(b) Each Guarantor hereby waives all rights of subrogation or
contribution, whether arising by contract or operation of law (including,
without limitation, any such right arising under federal bankruptcy law) or
otherwise by reason of any payment by it pursuant to the provisions of this
Article Fourteen.
Section 1408. Guarantee Is in Addition to Other Security.
------------------------------------------
This Guarantee shall be in addition to and not in substitution for any
other guarantees or other security which the Trustee may now or hereafter hold
in respect of the Indenture Obligations owing to the Trustee or the Holders by
the Company and (except as may be required by law) the Trustee shall be under no
obligation to marshal in favor of each of the Guarantors any other guarantees or
other security or any moneys or other assets which the Trustee may be entitled
to receive or upon which the Trustee or the Holders may have a claim.
Section 1409. Release of Security Interests.
-----------------------------
Without limiting the generality of the foregoing and except as
otherwise provided in this Indenture, each Guarantor hereby consents and agrees,
to the fullest extent permitted by applicable law, that the rights of the
Trustee hereunder, and the liability of the Guarantors hereunder, shall not be
affected by any and all releases for any
131
purpose of any collateral, if any, from the Liens and security interests created
by any collateral document and that this Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Indenture Obligations is rescinded or must otherwise be returned by
the Trustee upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.
Section 1410. No Bar to Further Actions.
-------------------------
Except as provided by law, no action or proceeding brought or
instituted under Article Fourteen and this Guarantee and no recovery or judgment
in pursuance thereof shall be a bar or defense to any further action or
proceeding which may be brought under Article Fourteen and this Guarantee by
reason of any further default or defaults under Article Fourteen and this
Guarantee or in the payment of any of the Indenture Obligations owing by the
Company.
Section 1411. Failure to Exercise Rights Shall Not Operate as a
-------------------------------------------------
Waiver; No Suspension of Remedies.
- ---------------------------------
(a) No failure to exercise and no delay in exercising, on the part of
the Trustee or the Holders, any right, power, privilege or remedy under this
Article Fourteen and this Guarantee shall operate as a waiver thereof, nor shall
any single or partial exercise of any rights, power, privilege or remedy
preclude any other or further exercise thereof, or the exercise of any other
rights, powers, privileges or remedies. The rights and remedies herein provided
for are cumulative and not exclusive of any rights or remedies provided in law
or equity.
(b) Nothing contained in this Article Fourteen shall limit the right
of the Trustee or the Holders to take any action to accelerate the maturity of
the Securities pursuant to Article Five or to pursue any rights or remedies
hereunder or under applicable law.
Section 1412. Trustee's Duties; Notice to Trustee.
-----------------------------------
(a) Any provision in this Article Fourteen or elsewhere in this
Indenture allowing the Trustee to request any information or to take any action
authorized by, or on behalf of any Guarantor, shall be permissive and shall not
be obligatory on the Trustee except as the Holders may direct in accordance with
the provisions of this Indenture or where the failure of the Trustee to request
any such information or to take any such action arises from the Trustee's
negligence or willful misconduct.
(b) The Trustee shall not be required to inquire into the existence,
powers or capacities of the Company, any Guarantor or the officers, directors or
agents acting or purporting to act on their respective behalf.
132
Section 1413. Successors and Assigns.
----------------------
All terms, agreements and conditions of this Article Fourteen shall
extend to and be binding upon each Guarantor and its successors and permitted
assigns and shall enure to the benefit of and may be enforced by the Trustee and
its successors and assigns; provided, however, that the Guarantors may not
-------- -------
assign any of their rights or obligations hereunder other than in accordance
with Article Eight.
Section 1414. Release of Guarantee.
--------------------
Concurrently with the payment in full of all of the Indenture
Obligations, the Guarantors shall be released from and relieved of their
obligations under this Article Fourteen. Upon the delivery by the Company to
the Trustee of an Officer's Certificate and, if requested by the Trustee, an
Opinion of Counsel to the effect that the transaction giving rise to the release
of this Guarantee was made by the Company in accordance with the provisions of
this Indenture and the Securities, the Trustee shall execute any documents
reasonably required in order to evidence the release of the Guarantors from
their obligations under this Guarantee. If any of the Indenture Obligations are
revived and reinstated after the termination of this Guarantee, then all of the
obligations of the Guarantors under this Guarantee shall be revived and
reinstated as if this Guarantee had not been terminated until such time as the
Indenture Obligations are paid in full, and each Guarantor shall enter into an
amendment to this Guarantee, reasonably satisfactory to the Trustee, evidencing
such revival and reinstatement.
This Guarantee shall terminate with respect to each Guarantor and
shall be automatically and unconditionally released and discharged as provided
in Section 1014(c).
Section 1415. Execution of Guarantee.
----------------------
To evidence the Guarantee, each Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Section 205, to be endorsed on
each Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of each Guarantor by its Chairman of the Board, its
President, its Chief Operating Officer or one of its Vice Presidents and
attested by an authorized officer. The signature of any of these officers on
the Securities may be manual or facsimile.
Section 1416. Guarantee Subordinate to Senior Guarantor Indebtedness.
------------------------------------------------------
Each Guarantor covenants and agrees, and each Holder of a Guarantee,
by his acceptance thereof, likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this Article, the Indebtedness
represented by the Guarantees is hereby made subordinate and subject in right of
payment as provided in this Article to the prior payment in full, in cash or
Cash Equivalents or in any other form
133
acceptable to the holders of Senior Guarantor Indebtedness, of all Senior
Guarantor Indebtedness; provided, however, that the Indebtedness represented by
-------- -------
this Guarantee in all respects shall rank equally with, or prior to, all
existing and future Indebtedness of such Guarantor that is expressly
subordinated to such Guarantor's Senior Guarantor Indebtedness.
This Article Fourteen shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of, or continue to
hold Senior Guarantor Indebtedness; and such provisions are made for the benefit
of the holders of Senior Guarantor Indebtedness; and such holders are made
obligees hereunder and they or each of them may enforce such provisions.
With respect to the relative rights of Holders and holders of Senior
Indebtedness and Senior Guarantor Indebtedness and for purposes of Section 1407,
Holders hereby acknowledge that Indebtedness under the Credit Agreement and any
guarantee by a Guarantor of such Indebtedness, in each case incurred in
accordance with the Indenture, shall be deemed to have been incurred
simultaneous with the incurrence by such Guarantor of its liability under its
Guarantee.
Section 1417. Payment Over of Proceeds Upon Dissolution of the
------------------------------------------------
Guarantor, etc.
- --------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of any Guarantor, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshaling of assets or liabilities of any Guarantor,
then and in any such event:
(1) the holders of Senior Guarantor Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents or in any other form
acceptable to the holders of Senior Guarantor Indebtedness, of all amounts due
on or in respect of all Senior Guarantor Indebtedness, before the Holders of the
Securities are entitled to receive any payment or distribution of any kind or
character (excluding Permitted Guarantor Junior Securities) on account of the
Guarantee of such Guarantor; and
(2) any payment or distribution of assets of any Guarantor of any kind
or character, whether in cash, property or securities (excluding Permitted
Guarantor Junior Securities), by set-off or otherwise, to which the Holders or
the Trustee would be entitled but for the provisions of this Article shall be
paid by the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Guarantor Indebtedness or their
representative or representatives or to the trustee or trustees under
134
any indenture under which any instruments evidencing any of such Senior
Guarantor Indebtedness may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Senior Guarantor Indebtedness held or
represented by each, to the extent necessary to make payment in full in cash or
Cash Equivalents or in any other form acceptable to the holders of Senior
Guarantor Indebtedness of all Senior Guarantor Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the holders of
such Senior Guarantor Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of any Guarantor of any kind or character,
whether in cash, property or securities, in respect of the Guarantee of such
Guarantor before all Senior Guarantor Indebtedness is paid in full, then and in
such event such payment or distribution (excluding Permitted Guarantor Junior
Securities) shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
person making payment or distribution of assets of such Guarantor for
application to the payment of all Senior Guarantor Indebtedness remaining
unpaid, to the extent necessary to pay all Senior Guarantor Indebtedness in full
in cash or Cash Equivalents or in any other form acceptable to the holders of
Senior Guarantor Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Guarantor Indebtedness.
The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another Person or the liquidation or dissolution of any
Guarantor following the sale, assignment, conveyance, transfer, lease or other
disposal of all or substantially all of such Guarantor's properties or assets to
another Person upon the terms and conditions set forth in Article Eight shall
not be deemed a dissolution, winding up, liquidation, reorganization, assignment
for the benefit of creditors or marshaling of assets and liabilities of such
Guarantor for the purposes of this Section if the Person formed by such
consolidation or the surviving entity of such merger or the Person which
acquires by sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of such Guarantor's properties and assets, as the case
may be, shall, as a part of such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposal, comply with the conditions set
forth in Article Eight.
Section 1418. Default on Senior Guarantor Indebtedness.
----------------------------------------
(a) Upon the maturity of any Senior Guarantor Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof and interest thereon and
other amounts due in connection therewith shall first be paid in full or such
payment duly provided for before any payment is made by any of the Guarantors or
any Person acting on behalf of any of the Guarantors in respect of the Guarantee
of such Guarantor.
135
(b) No payment (excluding payments in the form of Permitted Guarantor
Junior Securities) shall be made by any Guarantor in respect of its Guarantee
during the period in which Section 1417 shall be applicable, during any
suspension of payments in effect under Section 1203(a) of this Indenture or
during any Payment Blockage Period in effect under Section 1203(b) of this
Indenture.
(c) In the event that, notwithstanding the foregoing, any Guarantor
shall make any payment to the Trustee or the Holder of its Guarantee prohibited
by the foregoing provisions of this Section, then and in such event such payment
shall be paid over and delivered forthwith to the representatives of the holders
of Senior Guarantor Indebtedness or as a court of competent jurisdiction shall
direct.
Section 1419. Payment Permitted by Each of the Guarantors if No
-------------------------------------------------
Default.
- -------
Nothing contained in this Article, elsewhere in this Indenture or in
any of the Securities shall prevent any Guarantor, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of such Guarantor referred to in Section 1417 or under the
conditions described in Section 1418, from making payments at any time of
principal of, premium, if any, or interest on the Securities.
Section 1420. Subrogation to Rights of Holders of Senior Guarantor
----------------------------------------------------
Indebtedness.
- ------------
Subject to the payment in full of all Senior Guarantor Indebtedness in
cash or Cash Equivalents or in any other form acceptable to the holders of
Senior Guarantor Indebtedness, the Holders of the Securities shall be subrogated
to the rights of the holders of such Senior Guarantor Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Guarantor Indebtedness until the principal of, premium, if any, and
interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of Senior Guarantor
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Guarantor Indebtedness by Holders of the Securities or the
Trustee, shall, as among any Guarantor, its creditors other than holders of
Senior Guarantor Indebtedness, and the Holders of the Securities, be deemed to
be a payment or distribution by such Guarantor to or on account of the Senior
Guarantor Indebtedness.
Section 1421. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of Sections 1416 through 1429 of this Indenture are
intended solely for the purpose of defining the relative rights of the Holders
of the Securities on the one hand and the holders of Senior Guarantor
Indebtedness on the other
136
hand. Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among any Guarantor, its
creditors other than holders of Senior Guarantor Indebtedness and the Holders of
the Securities, the obligation of such Guarantor, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest on the Securities as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against each of the Guarantors of the Holders of the Securities
and creditors of each of the Guarantors other than the holders of Senior
Guarantor Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Guarantor Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the Guarantors
referred to in Section 1417, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in Section 1418,
to prevent any payment prohibited by such Section or enforce their rights
pursuant to Section 1418(c).
Section 1422. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the indebtedness of any Guarantor owing to such Holder in the form required
in such proceedings and the causing of such claim to be approved.
Section 1423. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior Guarantor
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act by any such holder, or by any non-
compliance by any Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Subsection (a) of this Section
and notwithstanding any other provision contained herein, the holders of Senior
Guarantor Indebtedness may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of
137
Senior Guarantor Indebtedness, do any one or more of the following: (1) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Guarantor Indebtedness or any instrument evidencing the same or
any agreement under which Senior Guarantor Indebtedness is outstanding; (2)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Guarantor Indebtedness; (3) release any Person
liable in any manner for the collection or payment of Senior Guarantor
Indebtedness; and (4) exercise or refrain from exercising any rights against any
of the Guarantors and any other Person; provided , however, that in no event
-------- ------
shall any such actions limit the right of the Holders of the Securities to take
any action to accelerate the maturity of the Securities in accordance with the
provisions set forth in Article Five or to pursue any rights or remedies under
this Indenture or under applicable laws if the taking of such action does not
otherwise violate the terms of this Article.
Section 1424. Notice to Trustee by Each of the Guarantors.
-------------------------------------------
(a) Each Guarantor shall give prompt written notice to the Trustee of
any fact known to such Guarantor which would prohibit the making of any payment
to or by the Trustee in respect of the Guarantee. Notwithstanding the
provisions of this Article or any provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee in respect of the Securities,
unless and until the Trustee shall have received written notice thereof from any
Guarantor or a holder of Senior Guarantor Indebtedness or any trustee, fiduciary
or agent therefor; and, prior to the receipt of any such written notice, the
Trustee shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
- -------- -------
provided for in this Section prior to the date upon which by the terms hereof
any money may become payable for any purpose (including, without limitation, the
payment of the principal of, premium, if any, or interest on any Security or
other Indenture Obligations), then, anything herein contained to the contrary
notwithstanding but without limiting the rights and remedies of the holders of
Senior Guarantor Indebtedness or any trustee, fiduciary or agent thereof, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it after such
date; nor shall the Trustee be charged with knowledge of the curing of any such
default or the elimination of the act or condition preventing any such payment
unless and until the Trustee shall have received an Officers' Certificate to
such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and each Guarantor by a Person representing
himself to be a representative of one or more holders of Designated Senior
Guarantor Indebtedness (a "Senior Guarantor Representative") or a holder of
Senior Guarantor Indebtedness (or a trustee, fiduciary or agent therefor) to
establish that such notice has been given by a
138
Senior Guarantor Representative or a holder of Senior Guarantor Indebtedness (or
a trustee, fiduciary or agent therefor); provided, however, that failure to give
-------- -------
such notice to the Company shall not affect in any way the ability of the
Trustee to rely on such notice. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Guarantor Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Guarantor Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 1425. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent.
- -----------------
Upon any payment or distribution of assets of any Guarantor referred
to in this Article, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Guarantor
Indebtedness and other indebtedness of such Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article, provided that the foregoing shall
--------
apply only if such court has been fully apprised of the provisions of this
Article.
Section 1426. Rights of Trustee as a Holder of Senior Guarantor
-------------------------------------------------
Indebtedness; Preservation of Trustee's Rights.
- ----------------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Guarantor
Indebtedness which may at any time be held by it, to the same extent as any
other holder of Senior Guarantor Indebtedness, and nothing in this Indenture
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 606.
Section 1427. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as
139
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that
-------- -------
Section 1426 shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as Paying Agent.
Section 1428. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Securities to take any action to accelerate the maturity of
the Securities pursuant to the provisions described under Article Five and as
set forth in this Indenture or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article of the
holders, from time to time, of Senior Guarantor Indebtedness to receive the
cash, property or securities receivable upon the exercise of such rights or
remedies.
Section 1429. Trustee's Relation to Senior Guarantor Indebtedness.
---------------------------------------------------
With respect to the holders of Senior Guarantor Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Senior Guarantor
Indebtedness shall be read into this Article against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior Guarantor
Indebtedness and the Trustee shall not be liable to any holder of Senior
Guarantor Indebtedness if it shall mistakenly in the absence of gross negligence
or willful misconduct pay over or deliver to Holders, the Company or any other
Person moneys or assets to which any holder of Senior Guarantor Indebtedness
shall be entitled by virtue of this Article or otherwise.
If an officer whose signature is on this Indenture no longer holds
that office at the time the Trustee authenticates a Security on which a
Guarantee is endorsed, such Guarantee shall be valid nevertheless.
140
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
CANANDAIGUA WINE COMPANY, INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Secretary
BATAVIA WINE CELLARS, INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Secretary
BISCEGLIA BROTHERS WINE CO.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Secretary
CALIFORNIA PRODUCTS COMPANY
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Secretary
GUILD WINERIES & DISTILLERIES.
INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
--------------------
Name: Robert Sands
Title: Secretary
TENNER BROTHERS, INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Secretary
WIDMER'S WINE CELLARS, INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Secretary
BARTON INCORPORATED
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Vice President
BARTON BRANDS, LTD.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Vice President
BARTON BEERS, LTD.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Vice President
BARTON BRANDS OF CALIFORNIA, INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Vice President
BARTON BRANDS OF GEORGIA, INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Vice President
BARTON DISTILLERS IMPORT CORP.
By: /s/ Richard Sands
---------------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
-----------------------
Name: Robert Sands
Title: Vice President
BARTON FINANCIAL CORPORATION
By: /s/ David Sorce
-------------------------
Name: David Sorce
Title: Vice President
Attest: /s/ Charles T. Schlau
-----------------------
Name: Charles T. Schlau
Title: Treasurer
STEVENS POINT BEVERAGE CO.
By: /s/ Richard Sands
----------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
-----------------------
Name: Robert Sands
Title: Vice President
MONARCH WINE COMPANY, LIMITED
PARTNERSHIP
By: BARTON MANAGEMENT, INC.
as corporate general partner
By: /s/ Richard Sands
---------------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
-----------------------
Name: Robert Sands
Title: Vice President
BARTON MANAGEMENT, INC.
By: /s/ Richard Sands
-------------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
-----------------------
Name: Robert Sands
Title: Vice President
VINTNERS INTERNATIONAL COMPANY,
INC.
By: /s/ Richard Sands
----------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
-----------------------
Name: Robert Sands
Title: Secretary
CANANDAIGUA WEST INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Secretary
THE VIKING DISTILLERY, INC.
By: /s/ Richard Sands
---------------------
Name: Richard Sands
Title: President
Attest: /s/ Robert Sands
---------------------
Name: Robert Sands
Title: Vice President
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By: /s/ Patricia Kelly Acker
--------------------------
Name: Patricia Kelly Acker
Title: Vice President
Attest: /s/ D.C. Donovan
---------------------
Name: D.C. Donovan
Title: Assistant Secretary
SCHEDULE I
INDEBTEDNESS OF THE COMPANY AND ITS SUBSIDIARIES
1. $2,000,000 Ontario County Industrial Development Agency 1974
Industrial Development Revenue Bond (Canandaigua Wine Company, Inc. Facility).
Financing documents include (a) Mortgage and Indenture Trust dated September 1,
1974 (as amended and supplemented) from the Ontario County Industrial
Development Agency ("Agency") to The Chase Manhattan Bank, N.A. (as successor in
interest to Chase Lincoln First Bank) ("Trustee"); (b) Guaranty Agreement dated
September 1, 1974 from CWC to Trustee; (c) Ground Lease dated September 1, 1974
(as amended and supplemented) between CWC and Agency; and (d) Lease Agreement
dated September 1, 1974 (as amended and supplemented) between Company and
Agency. A supplemental bond in the amount of $2,370,000 was issued by the Agency
and certain amendments and supplements to the financing documents were entered
into in January, 1980. All such amendments and supplements are included in this
Schedule I.
2. Term Loan Facility, Revolving Credit Facility and Letter of Credit
Facility under the Third Amended and Restated Credit Agreement dated as of
September 1, 1995 among the Company, its principal operating subsidiaries and a
syndicate of banks for which The Chase Manhattan Bank acts as Administrative
Agent, as amended.
3. $130,000,000 aggregate principal amount of 8 3/4% Senior Subordinated
Notes due 2003 and Guarantees thereof pursuant to Indenture dated as of December
27, 1993 between CWC, certain of its subsidiaries and The Chase Manhattan Bank
(successor by merger to Chemical Bank), as trustee.
4. Capital leases for equipment to which CWC and certain subsidiaries
are parties.
5. One loan each against cash surrender values of two officer life
insurance policies, one by Connecticut Mutual Life Insurance Company and one by
Phoenix Mutual Life Insurance Company. Borrowings are usually made annually
against increased cash surrender values.
6. Guarantee by CWC of the obligations of Barton Brands of California,
Inc., ("BBC") under Equipment Lease, Real Estate Sublease and Packaging Services
Agreement between BBC and Joseph E. Seagrams & Sons, Inc.
7. Capital Lease for the Escalon California Facility.
8. Operating Agreement of Polyphenolics, LLC effective as of September
14, 1995 between Canandaigua Wine Company, Inc. and Second Nature Technology,
Inc., as amended.
SCHEDULE II
ENCUMBRANCES AND RESTRICTIONS
OF THE COMPANY AND ITS SUBSIDIARIES
1. Term Loan Facility, Revolving Credit Facility and Letter of Credit
Facility under the Third Amended and Restated Credit Agreement dated as of
September 1, 1995 among the Company, its principal operating subsidiaries and a
syndicate of banks for which The Chase Manhattan Bank acts as Administrative
Agent, as amended.
2. Restated Certificate of Incorporation of Canandaigua Wine Company, Inc.
(provides for a dividend preference on the Class A Common Stock).
3. $2,000,000 Ontario County Industrial Development Agency 1974 Industrial
Development Revenue Bond (Canandaigua Wine Company, Inc. Facility). Financing
documents include (a) Mortgage and Indenture of Trust dated September 1, 1974
(as amended and supplemented) from the Ontario County Industrial Development
Agency ("Agency") to The Chase Manhattan Bank, N.A. (as successor in interest to
Chase Lincoln First Bank) ("Trustee"); (b) Guaranty Agreement dated September 1,
1974 from CWC to Trustee; (c) Ground Lease dated September 1, 1974 (as amended
and supplemented) between CWC and Agency; and (d) Lease Agreement dated
September 1, 1974 (as amended and supplemented) between Company and Agency. A
supplemental bond in the amount of $2,370,000 was issued by the Agency and
certain amendments and supplements to the financing documents were entered into
in January, 1980. All such amendments and supplements are included in this
Schedule II.
4. $130,000,000 aggregate principal amount of 8 3/4% Senior Subordinated
Notes due 2003 and Guarantees thereof pursuant to Indenture dated as of December
27, 1993 between CWC, certain of its subsidiaries and The Chase Manhattan Bank
(successor by merger to Chemical Bank), as trustee.
5. Operating Agreement of Polyphenolics, LLC effective as of September 14,
1995 between Canandaigua Wine Company, Inc. and Second Nature Technology, Inc.
as amended.
148
EXHIBIT A
---------
INTERCOMPANY NOTE
-----------------
_____________, 19__
Evidences of all loans or advances ("Loans") made hereunder shall be
reflected on the grid attached hereto. FOR VALUE RECEIVED, ______________, a
________________ corporation (the "Maker"), HEREBY PROMISES TO PAY ON DEMAND to
the order of ________________ (the "Holder") the principal sum of the aggregate
unpaid principal amount of all Loans (plus accrued interest thereon) at any time
and from time to time made hereunder which has not been previously paid.
All capitalized terms used herein that are defined in, or by reference
in, the Indenture among Canandaigua Wine Company, Inc., a Delaware Corporation
(the "Company"), the guarantors a party thereto and Harris Trust and Savings
Bank, as trustee, dated as of October 29, 1996 (the "Indenture"), have the
meanings assigned to such terms therein, or by reference therein, unless
otherwise defined.
ARTICLE I
TERMS OF INTERCOMPANY NOTE
Section 1.01 Note Forgivable. Unless the Maker of the Loan hereunder
---------------
is either of the Company or any Guarantor, the Holder may not forgive any
amounts owing under this intercompany note.
Section 1.02 Interest: Prepayment. (a) The interest rate ("Interest
---------------------
Rate") on the Loans shall be a rate per annum reflected on the grid attached
hereto.
(b) The interest, if any, payable on each of the Loans shall accrue from
the date such Loan is made and, subject to Section 2.01, shall be payable upon
demand of the Holder.
(c) If the principal or accrued interest, if any, of the Loans is not
paid on the date demand is made, interest on the unpaid principal and interest
will accrue at a rate equal to the Interest Rate, if any, plus 100 basis points
per annum from maturity until the principal and interest on such Loans are fully
paid.
(d) Subject to Section 2.01, any amounts hereunder may be prepaid at any
time by the Maker.
A-1
Section 1.03 Subordination. All loans made to either of the Company or
-------------
any Guarantor shall be subordinated in right of payment to the payment and
performance of the obligations of the Company and any Subsidiary under the
Indenture, the Securities, the Guarantees or any other Indebtedness ranking
senior to or pari passu with the Securities, or any Guarantees, including,
without limitation, any Indebtedness incurred under the Credit Agreement;
provided that with respect to a Subsidiary in any specific instance, such
- --------
Subsidiary is also an obligor under the Indenture, the Securities, a Guarantee
or such other senior or pari passu Indebtedness, as the case may be, whether as
a borrower, guarantor or pledgor of collateral.
ARTICLE II
EVENTS OF DEFAULT
Section 2.01 Events of Default. If after the date of issuance of this
-----------------
Loan (i) an Event of Default has occurred under the Indenture, (ii) an "Event of
Default" (as defined) has occurred under the Credit Agreement, or any
refinancing of the Credit Agreement or (iii) an "event of default" (as defined)
has occurred on any other Indebtedness of the Company or any Guarantor, then (x)
in the event the Maker is not either one of the Company or a Guarantor, all
amounts owing under the Loans hereunder shall be immediately due and payable to
the Holder, and (y) in the event the Maker is either the Company or a Guarantor,
the amounts owing under the Loans hereunder shall not be due and payable;
provided, however, that if such Event of Default or event of default has been
- -------- -------
waived, cured or rescinded, such amounts shall no longer be due and payable in
the case of clause (x), and such amounts may be payable in the case of clause
(y). If the Holder is a Subsidiary, then the Holder hereby agrees that if it
receives any payments or distributions on any Loan from the Company or a
Guarantor which is not payable pursuant to clause (y) of the prior sentence
after any Event of Default or event or default described in clauses (i), (ii) or
(iii) above has occurred, is continuing and has not been waived, cured or
rescinded, it will pay over and deliver forthwith to the Company or such
Guarantor, as the case may be, all such payments and distributions.
ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments, Etc. No amendment or waiver of any provision
----------------
of this intercompany note, or consent to depart herefrom is permitted at any
time for any reason, except with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities.
Section 3.02 Assignment. No party to this Agreement may assign, in
----------
whole or in part, any of its rights and obligations under this intercompany
note, except to its legal successor in interest.
A-2
Section 3.03 Third Party Beneficiaries. The holders of the Securities
-------------------------
or any other Indebtedness ranking pari passu with or senior to, the Securities
or any Guarantees, including without limitation, any Indebtedness incurred under
the Credit Agreement, shall be third party beneficiaries to this intercompany
note and shall have the right to enforce this intercompany note against the
Company or any of its Subsidiaries.
Section 3.04 Headings. Article and Section headings in this
--------
intercompany note are included for convenience of reference only and shall not
constitute a part of this intercompany note for any other purpose.
Section 3.05 Entire Agreement. This intercompany note sets forth the
----------------
entire agreement of the parties with respect to its subject matter and
supersedes all previous understandings, written or oral, in respect thereof.
Section 3.06 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 3.07 Waivers. The Maker hereby waives presentment, demand for
-------
payment, notice of protest and all other demands and notices in connection with
the delivery, acceptance, performance or enforcement hereof.
By:
---------------------------------
Name:
Title:
A-3
BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL
Amount of Maturity of Amount
Borrowing/ Borrowing/ Principal Paid Unpaid Principal Notation
Date Principal Principal or Prepaid Balance Made by
- ------ ---------- ----------- -------------- ---------------- --------
A-4
Exhibit B
---------
Form of Certificate
to Be Delivered upon
Termination of Restricted Period
-------------------------------
On or after December 9, 1996
HARRIS TRUST AND SAVINGS BANK
___________________________
___________________________
Attention: Corporate Trust Division
Re: Canandaigua Wine Company, Inc. (the "Company") 8 3/4% Series __
Senior
Subordinated Notes due 2003 (the "Securities")
Ladies and Gentlemen:
This letter relates to U.S. $______ principal amount of Securities
represented by the temporary global note certificate (the "Temporary
Certificate"). Pursuant to Section 201 of the Indenture dated as of October 29,
1996 relating to the Securities (the "Indenture"), we hereby certify that (1) we
are the beneficial owner of such principal amount of Securities represented by
the Temporary Certificate and (2) we are a person outside the United States to
whom the Securities could be transferred in accordance with Rule 904 of
Regulation S promulgated under the U.S. Securities Act of 1933, as amended.
Accordingly, you are hereby requested to issue a certificated Security
representing the undersigned's interest in the principal amount of Securities
represented by the Temporary Certificate, all in the manner provided by the
Indenture.
You and the Company are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
---------------------------
Authorized Signature
B-2
Exhibit C
----------
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
--------------------------------------------------------
__________________, ________
Canandaigua Wine Company, Inc.
c/o Harris Trust and Savings Bank
_________________________
_________________________
Attention: Corporate Trust Division
Re: Canandaigua Wine Company, Inc. (the "Company") 8 3/4% Series __ Senior
Subordinated Notes due 2003 (the "Securities")
----------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $_________ aggregate principal
amount of the Securities:
1. We understand that the Securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not be sold
within the United States or to, or for the benefit of, U.S. Persons except as
permitted in the following sentence. We agree on our own behalf and on behalf
of any investor account for which we are purchasing the Securities to offer,
resell, pledge or otherwise transfer such Securities prior to the date which is
three years after the later of the date of original issue and the last date on
which the Company or any affiliate of the Company was the owner of such
Securities, or any predecessor thereto (the "Resale Restriction Termination
Date") only (a) to the Company, (b) pursuant to a registration statement which
has been declared effective under the Securities Act, (c) for so long as the
Securities are eligible for resale pursuant to Rule 144A under the Securities
Act, inside the United States to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its own account
or for the account of a QIB to whom notice is given that the transfer is being
made in reliance on Rule 144A, (d) outside the United States pursuant to offers
and sales to non-U.S. Persons in an Offshore Transaction within the meaning of
Regulations S under the Securities Act, (e) inside the United States to an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act that is acquiring the
Securities for its own account or for the account of such an institutional
"accredited investor" for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution thereof in violation of the
Securities Act or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
and the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Securities
is proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Trustee, which shall
provide, among other things, that the transferee is an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act and that it is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act. We
acknowledge that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the Securities pursuant to clauses (d), (e) and (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee. As used herein, the terms "United
States", "Offshore Transaction", and "U.S. Person" have the respective meanings
given to them by Regulation S under the Securities Act.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Securities for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act or the securities laws of any state of the
United States or any other applicable jurisdiction; provided that the
disposition of our property and the property of any accounts for which we are
acting as fiduciary shall remain at all times within our and their control; and
we have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
3. We are acquiring the Securities purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
4. We understand that the Trustee will not be required to accept for
registration of transfer any Notes acquired by us, except upon presentation of
evidence satisfactory to the Company and the Trustee that the foregoing
restrictions on transfer
C-2
have been complied with. We further understand that the Notes purchased by us
will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph. We
further agree to provide to any person acquiring any of the Notes from us a
notice advising such person that resales of the Notes are restricted as stated
herein and that certificates representing the Notes will bear a legend to that
effect.
5. We acknowledge that you, the Company, the Trustee and others will rely
upon our acknowledgments, representations and agreements set forth herein, and
we agree to notify you promptly in writing if any of our acknowledgments,
representations or agreements herein cease to be accurate and complete.
6. We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as a fiduciary or agent.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
Very truly yours,
By:
--------------------------
(Name of Purchaser)
Date:
------------------
C-3
Upon transfer, the Securities should be registered in the name of the new
beneficial owner as follows:
Name:_______________________________________________________________
Address:_____________________________________________________________
Taxpayer ID Number:___________________________________________________
C-4
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
--------------------------
________________, _____
Harris Trust and Savings Bank
________________________
________________________
________________________
Attention: Corporate Trust Division
Re: Canandaigua Wine Company, Inc. (the "Company") 8 3/4% Series ___
Senior
Subordinated Notes due 2003 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the Securities Act of 1933, as
amended, and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States or (b) the transaction was executed in, on or through the facilities
of a designated off-shore securities market and neither we nor any person
acting on our behalf knows that the transaction has been pre-arranged with
a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933, as amended.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: ___________________________
Authorized Signature
D-2
APPENDIX I
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- -----------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
- ---------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- ---------------------------------------------------------------------------
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES FOR SERIES B SECURITIES
EXCEPT PERMANENT OFFSHORE PHYSICAL
CERTIFICATES]
In connection with any transfer of this Security occurring prior to the date
which is the earlier of the date of an effective Registration Statement or
October 29, 1999, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
--
[ ] (b) this Security is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Security
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 307 of the Indenture
shall have been satisfied.
Date: _______________________
_______________________________________
NOTICE: The signature to this assignment
must correspond with the name as written upon
the face of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
Signature Guarantee: _____________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17 Ad-15]
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:__________________ _________________________________________
NOTICE: To be executed by an authorized signatory
2
APPENDIX II
FORM OF TRANSFER NOTICE
I or we assign and transfer this Security to:
- --------------------------------------------
Please insert social security or other identifying number of assignee
- ---------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Print or type name, address and zip code of assignee and irrevocably
appoint_____________________________________________________________________
[Agent], to transfer this Security on the books of the Company. The Agent may
substitute another to act for him.
Dated Signed
-------------------- ---------------------------------
(Sign exactly as name appears on the other side of this Security)
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17 Ad-15]