EXHIBIT 4.1
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CANANDAIGUA BRANDS, INC.,
as Issuer
------
Batavia Wine Cellars, Inc.
Barton Incorporated
Barton Brands, Ltd.
Barton Beers, Ltd.
Barton Brands of California, Inc.
Barton Brands of Georgia, Inc.
Barton Distillers Import Corp.
Barton Financial Corporation
Stevens Point Beverage Co.
Canandaigua Limited
Monarch Import Company
Canandaigua Wine Company, Inc.
The Viking Distillery, Inc.
Canandaigua Europe Limited
Roberts Trading Corp.
Polyphenolics, Inc.,
as Guarantors
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and
HARRIS TRUST AND SAVINGS BANK,
as Trustee
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Supplemental Indenture No. 2
Dated as of August 4, 1999
_____________________
$200,000,000
of
8 5/8% Senior Notes due 2006
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TABLE OF CONTENTS
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Page
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ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.1. Relation to Indenture......................................... 2
SECTION 1.2. Definitions................................................... 2
ARTICLE TWO
THE SERIES OF DEBT SECURITIES
SECTION 2.1. Title of the Debt Securities.................................. 19
SECTION 2.2. Limitation on Aggregate Principal Amount...................... 20
SECTION 2.3. Interest and Interest Rates; Maturity Date of Notes........... 20
SECTION 2.4. Optional Redemption........................................... 20
SECTION 2.5. Sinking Fund.................................................. 21
SECTION 2.6. Method of Payment............................................. 21
SECTION 2.7. Currency...................................................... 22
SECTION 2.8. Registered Securities; Global Form............................ 22
SECTION 2.9. Form of Notes................................................. 22
ARTICLE THREE
COVENANTS
SECTION 3.1. Payment of Taxes and Other Claims............................. 23
SECTION 3.2. Maintenance of Properties..................................... 23
SECTION 3.3. Insurance..................................................... 24
SECTION 3.4. Limitation on Indebtedness.................................... 24
SECTION 3.5. Limitation on Restricted Payments............................. 27
SECTION 3.6. Limitation on Transactions with Affiliates.................... 31
SECTION 3.7. Limitation on Liens........................................... 32
SECTION 3.8. Limitation on Sale of Assets.................................. 33
SECTION 3.9. Limitation on Guarantees by Restricted Subsidiaries........... 39
SECTION 3.10. Purchase of Notes upon a Change of Control................... 40
SECTION 3.11. Limitation on Restricted Subsidiary Capital Stock............ 44
SECTION 3.12. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted
Subsidiaries............................................... 45
SECTION 3.13. Designation of Unrestricted Subsidiaries..................... 46
SECTION 3.14. Provision of Financial Statements............................ 47
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SECTION 3.15. Statement by Officers as to Default..................... 47
SECTION 3.16. Waiver of Certain Covenants............................. 48
SECTION 3.17. Limitation of Applicability of Certain
Covenants if Notes Rated
Investment Grade...................................... 48
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 4.1. Satisfaction and Discharge of Indenture................. 49
SECTION 4.2. Application of Trust Money.............................. 50
SECTION 4.3. Termination of Company's Obligations.................... 51
SECTION 4.4. Application of Trust Money.............................. 53
SECTION 4.5. Repayment to Company.................................... 54
SECTION 4.6. Reinstatement........................................... 54
ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default....................................... 55
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment...... 58
ARTICLE SIX
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
SECTION 6.1. Company or Any Guarantor May Consolidate, etc.,
Only on Certain Terms................................. 59
SECTION 6.2. Successor Substituted................................... 62
ARTICLE SEVEN
MISCELLANEOUS PROVISIONS
SECTION 7.1. Ratification of Indenture............................... 62
SECTION 7.2. Governing Law........................................... 63
SECTION 7.3. Counterparts............................................ 63
ARTICLE EIGHT
GUARANTEES
SECTION 8.1. Guarantors' Guarantee................................... 63
SECTION 8.2. Continuing Guarantee; No Right of Set-Off; Independent
Obligation........................................... 63
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SECTION 8.3. Guarantee Absolute...................................... 65
SECTION 8.4. Right To Demand Full Performance........................ 67
SECTION 8.5. Waivers................................................. 68
SECTION 8.6. The Guarantors Remain Obligated in Event
the Company Is No Longer Obligated to
Discharge Indenture Obligations...................... 68
SECTION 8.7. Fraudulent Conveyance; Subrogation...................... 69
SECTION 8.8. Guarantee Is in Addition to Other Security.............. 69
SECTION 8.9. Release of Security Interests........................... 69
SECTION 8.10. No Bar to Further Actions............................... 70
SECTION 8.11. Failure To Exercise Rights Shall Not Operate
as a Waiver; No Suspension of Remedies............... 70
SECTION 8.12. Trustee's Duties; Notice to Trustee..................... 70
SECTION 8.13. Successors and Assigns.................................. 71
SECTION 8.14. Release of Guarantee.................................... 71
SECTION 8.15. Execution of Guarantee.................................. 72
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures and Agreements Without
Consent of Holders................................... 72
SECTION 9.2. Supplemental Indentures and Agreements with
Consent of Holders................................... 73
Exhibit A Form of Note
Exhibit B Form of Intercompany Note
Exhibit C Form of Guarantee
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SUPPLEMENTAL INDENTURE NO. 2, dated as of August 4, 1999 (the
"Supplemental Indenture"), between CANANDAIGUA BRANDS, INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the "Company"), the guarantors named herein and from time to time parties
hereto, and HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation, as
Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
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WHEREAS, the Company has heretofore delivered to the Trustee an
Indenture dated as of February 25, 1999 (the "Indenture"), a form of which has
been filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, as an exhibit to the Company's Registration Statement on
Form S-3 (Registration No. 333-67037), providing for the issuance from time to
time of Debt Securities of the Company.
WHEREAS, Sections 2.1 and 2.2 of the Indenture provide for various
matters with respect to any series of Debt Securities issued under the Indenture
to be established in an indenture supplemental to the Indenture.
WHEREAS, Section 12.1 of the Indenture provides for the Company and
the Trustee to enter into an indenture supplemental to the Indenture to
establish the form or terms of Debt Securities of any series as provided by
Sections 2.1 and 2.2 of the Indenture.
WHEREAS, all the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
series of Debt Securities provided for herein by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Notes, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
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SECTION 1.1. Relation to Indenture.
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This Supplemental Indenture constitutes an integral part of the
Indenture.
SECTION 1.2. Definitions.
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For all purposes of this Supplemental Indenture, except as otherwise
expressly provided for or unless the context otherwise requires:
(1) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture; and
(3) To the extent terms defined herein differ from the Indenture the
terms defined herein will govern.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
the time such Person becomes a Restricted Subsidiary or (ii) assumed in
connection with the acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Restricted 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
Restricted Subsidiary.
"Adjusted Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"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; (ii) any other Person
that owns,
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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 is 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 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 Restricted Subsidiary; (ii) all or substantially all of the
properties and assets of any division or line of business of the Company or its
Restricted Subsidiaries; or (iii) any other properties or assets of the Company
or any Restricted 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 6.1(a) or
(b) that is of the Company to any Restricted Subsidiary, or of any Subsidiary to
the Company or any Subsidiary in accordance with the terms of this Supplemental
Indenture and the Indenture or (y) transfers of properties and assets in any
given fiscal year with an aggregate Fair Market Value of less than $3,000,000.
"Asset Swap" means the execution of a definitive agreement, subject
only to customary closing conditions that the Company in good faith believes
will be satisfied, for a substantially concurrent purchase and sale, or
exchange, of Productive Assets between the Company or any of its Restricted
Subsidiaries and another Person or group of affiliated Persons; it being
understood that an Asset Swap may include a cash equalization payment made in
connection therewith provided that such cash payment, if received by the Company
or its Subsidiaries, shall be deemed to be proceeds received from an Asset Sale
and applied in accordance with Section 3.8.
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of
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(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.
"Book-Entry Interests" has the meaning set forth in Section 2.8.
"Borrowing Base" means the sum of (i) 85% of accounts receivable of
the Company and its Subsidiaries and (ii) 50% of the net book value of the
inventory of the Company and its Subsidiaries, in each case, as determined on a
consolidated basis in accordance with GAAP.
"Capital Lease Obligation" means any obligations of the Company and
its Restricted 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.
"Cedel" means CedelBank, societe anonyme.
"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), 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 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
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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 3.5 (and such amount shall be
treated as a Restricted Payment subject to the provisions set forth in Section
3.5) 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 in Section
6.1.
"Change of Control Offer" shall have the meaning set forth in Section
3.10(a).
"Change of Control Purchase Date" shall have the meaning set forth in
Section 3.10(a).
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"Change of Control Purchase Price" shall have the meaning set forth in
Section 3.10(a).
"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 Supplemental Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means Canandaigua Brands, Inc., a corporation incorporated
under the laws of Delaware, until a successor Person shall have become such
pursuant to the applicable provisions of this Supplemental Indenture or the
Indenture, and thereafter "Company" shall mean such successor Person.
"Comparable Treasury Issue" means a United States Government
Obligation selected by the Quotation Agent as having a maturity comparable to
the remaining term of the Notes to be redeemed, that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes.
"Comparable Treasury Price" means, with respect to any redemption
date, (i) the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (ii) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"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 Restricted 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 and its Restricted Subsidiaries
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
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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 Restricted 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 Restricted 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 and its
Restricted Subsidiaries during such period and (ii) all capitalized interest of
the Company and its Restricted Subsidiaries, in each case as determined in
accordance with GAAP on a consolidated basis. Whenever pro forma effect is to
be given to an acquisition or disposition of assets for the purpose of
calculating the Consolidated Fixed Charge Coverage Ratio, the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in
connection with such acquisition or disposition of assets shall be calculated on
a pro forma basis in accordance with Regulation S-X under the Securities Act, as
in effect on the date of such calculation.
"Consolidated Net Income (Loss)" of the Company means, for any period,
the Consolidated net income (or loss) of the Company and its Restricted
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
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and its Restricted 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 Restricted Subsidiaries;
(iii) net income (or loss) of any Person combined with the Company or any of its
Restricted 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 Restricted Subsidiary to the extent that the declaration
of dividends or similar distributions by that Restricted 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 Restricted
Subsidiary or its stockholders. Whenever pro forma effect is to be given to an
acquisition or disposition of assets for the purpose of calculating the
Consolidated Fixed Charge Coverage Ratio, the amount of income or earnings
related to such assets shall be calculated on a pro forma basis in accordance
with Regulation S-X under the Securities Act, as in effect on the date of such
calculation.
"Consolidated Net Tangible Assets" means with respect to any Person,
as of any date of determination, the book value of such Person's total assets,
less goodwill, deferred financing costs and other intangibles and less
accumulated amortization, shown on the most recent balance sheet of such Person,
determined on a consolidated basis in accordance with GAAP.
"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 Restricted Subsidiaries for such period, as determined in
accordance with GAAP on a Consolidated basis (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
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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.
"Credit Agreement" means the First Amended and Restated Credit
Agreement, dated as of November 2, 1998, as amended by the Second Amended and
Restated Credit Agreement, dated as of May 12, 1999 and Amendment No. 1, dated
as of July 28, 1999, between the Company, the Subsidiaries of the Company
identified on the signature pages thereof, the lenders named therein and The
Chase Manhattan Bank, as administrative agent, including any deferrals,
renewals, extensions, replacements, refinancings or refundings thereof or
amendments, modifications or supplements thereto and any agreements therefor
(including any of the foregoing that increase the principal amount of
Indebtedness or the commitments to lend thereunder and have been made in
compliance with the provisions of Section 3.4; 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 subparagraph (b)(i) of Section 3.4), whether
by or with the same or any other lender, creditor, group of lenders or group of
creditors, and including related notes, guarantees and note agreements and other
instruments and agreements executed in connection therewith.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" or "DTC" has the meaning set forth in Section 2.6.
"Designation" has the meaning set forth in Section 3.13.
"Designation Amounts" has the meaning set forth in Section 3.13.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary of the
Company organized under the laws of the United States or any political
subdivision thereof or the operations of which are located substantially inside
the United States.
"Euroclear" means Morgan Guaranty Trust Company of New York (Brussels
office) as operator of the Euroclear system.
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"Excess Proceeds" has the meaning set forth in Section 3.8(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"Foreign Restricted Subsidiary" means a Restricted Subsidiary of the
Company not organized under the laws of the United States or any political
subdivision thereof and the operations of which are located substantially
outside of the United States.
"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 Supplemental Indenture.
"Global Notes" has the meaning set forth in Section 2.8.
"Guarantee" means the guarantee by each Guarantor of the Company's
Indenture Obligations pursuant to a guarantee given in accordance with this
Supplemental Indenture, including the Guarantees by the Guarantors and any
Guarantee delivered pursuant to provisions of Section 3.9.
"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 1.2 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
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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.
"Guarantor" means the Subsidiaries listed on the signature pages of
this Supplemental Indenture as guarantors and each other Subsidiary required to
become a Guarantor after the Issue Date pursuant to Section 3.9.
"Hedging Agreement" means, with respect to any Person, all interest
rate swap or similar agreements or foreign currency or commodity hedge, exchange
or similar agreements of such Person.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under Hedging Agreements.
"Holders" mean the registered holders of the Notes.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Acquired Person or any of
its Subsidiaries existing at the time such Acquired Person becomes a Subsidiary
(or is merged into or consolidated with the Company or any Subsidiary), whether
or not such Indebtedness was Incurred in connection with, as a result of, or in
contemplation of, such Acquired Person becoming a Subsidiary (or being merged
into or consolidated with the Company or any Subsidiary), shall be deemed
Incurred at the time any such Acquired Person becomes a Subsidiary or merges
into or consolidates with the Company or any Subsidiary.
"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
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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
Hedging Obligations 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 the 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 Obligations" means the obligations of the Company and any
other obligor under this Supplemental Indenture or under the Notes, 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 Supplemental Indenture, the Notes and the performance of all other
obligations to the Trustee and the Holders under this Supplemental Indenture and
the Notes, according to the terms hereof or thereof.
-12-
"Insolvency or Liquidation Proceeding" means, with respect to any
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Interest Payment Date" has the meaning set forth in Section 2.3.
"Investment Grade" means a rating of (i) BBB- or higher by S&P and Ba1
or higher by Moody's or (ii) Baa3 or higher by Moody's and BB+ or higher by S&P.
"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.
"Issue Date" means August 4, 1999.
"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 Note means the date on which
the principal of such Note becomes due and payable as therein provided or as
provided in this Supplemental 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.
"Moody's" means Moody's Investor Services, Inc. or any successor
thereto.
"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 for, cash or Temporary
-13-
Cash Investments (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary) net of (i)
brokerage commissions and other 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 Restricted Subsidiary) owning
a beneficial interest in the assets subject to the Asset Sale and (v)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve, in accordance with GAAP, against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee 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 in Section 3.5, 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 Restricted 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.
"Note Amount" has the meaning specified in Section 3.8 hereof.
"Notes" has the meaning specified in Section 2.1 hereof.
"Obligations" means any principal, interest (including, without
limitation, Post-Petition Interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.
-14-
"Offer" has the meaning set forth in Section 3.8 hereof.
"Offer Date" has the meaning set forth in Section 3.8 hereof.
"Offer Price" has the meaning set forth in Section 3.8 hereof.
"Other Indebtedness" has the meaning set forth in Section 3.9 hereof.
"Pari Passu Indebtedness" means any Indebtedness of the Company or a
Guarantor that is pari passu in right of payment with the Notes or a Guarantee,
as the case may be.
"Pari Passu Offer" has the meaning set forth in Section 3.8 hereof.
"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) or the Mac and Sally Sands Foundation,
Incorporated; (iii) any trusts created for the benefit of the Persons described
in clauses (i), (ii) or (v) or for the benefit of Andrew Stern or any trust for
the benefit of any such trust; (iv) any partnerships that are controlled by (and
a majority of the partnership interests in which are owned by) any of the
Persons described in clauses (i), (ii), (iii) or (v) or by any partnership that
satisfies the conditions of this clause (iv); or (v) in the event of the
incompetence or death of any of the persons described in clauses (i) and (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 Indebtedness" has the meaning set forth in Section 3.4.
"Permitted Investment" means (i) Investments in any Wholly Owned
Restricted Subsidiary or any Person which, as a result of such Investment,
becomes a Wholly Owned Restricted Subsidiary; (ii) Indebtedness of the Company
or a Restricted 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 Restricted Subsidiary in connection
with an Asset Sale permitted
-15-
under Section 3.8 to the extent such Investments are non-cash proceeds as
permitted under such covenant; (v) guarantees of Indebtedness otherwise
permitted by this Supplemental Indenture; (vi) Investments in existence on the
date of the Indenture; and (vii) Investments in joint ventures in an aggregate
amount not to exceed at any one time the greater of (x) $50.0 million and (y)
5.0% of Consolidated Net Tangible Assets.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.
"Post-Petition Interest" means, with respect to any Indebtedness of
any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument creating,
evidencing or governing such Indebtedness, whether or not, pursuant to
applicable law or otherwise, the claim for such interest is allowed as a claim
in such Insolvency or Liquidation Proceeding.
"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 Issue Date, and including, without limitation, all classes and series of
preferred or preference stock.
"Productive Assets" means assets of a kind used or usable by the
Company and its Restricted Subsidiaries in their respective businesses
(including, without limitation, contracts, leases, licenses or other agreements
of value to the Company or any of its Restricted Subsidiaries), provided,
however, that productive assets to be acquired by the Company or any Restricted
Subsidiary shall be, in the good faith judgment of management of the Company or
such Restricted Subsidiary, assets which are reasonably related, ancillary or
complementary to the business of the Company and its Restricted Subsidiaries as
conducted on the Issue Date.
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
-16-
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"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 (other than as a
result of a change of control provision substantially similar to that contained
in Section 3.10) or passage of time would be, required to be redeemed prior to
any Stated Maturity of the principal of the Notes 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.
"Reference Treasury Dealer" means each of (x) J.P. Morgan Securities
Inc. and its respective successors; provided, however, that if the foregoing
shall cease to be a primary U.S. Government Obligations dealer in New York City
(a "Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer; and (y) any other Primary Treasury Dealer selected by
the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.
"Restricted Payment" has the meaning set forth in Section 3.5.
"Restricted Subsidiary" means any Subsidiary of the Company that has
not been designated by the Board of Directors of the Company, by a resolution of
the Board of Directors of the Company delivered to the Trustee, as an
Unrestricted Subsidiary pursuant to Section 3.13. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of such covenant.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a Restricted Subsidiary
sells or transfers any property
-17-
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.
"S&P" means Standard & Poor's Ratings Group or any successor thereto.
"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 Notes 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
-18-
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.
"United States Government Obligations" means direct non-callable
obligations of the United States of America for the payment of which the full
faith and credit of the United States is pledged.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 3.13. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of Section 3.13.
"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).
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
all the Capital Stock of which (other than directors' qualifying shares and up
to 5% of the issued and outstanding Capital Stock which may be owned by
executive officers of such Subsidiary) is owned by the Company or another Wholly
Owned Restricted Subsidiary.
ARTICLE TWO
THE SERIES OF DEBT SECURITIES
-----------------------------
SECTION 2.1. Title of the Debt Securities.
----------------------------
There shall be a series of Debt Securities designated the "8 5/8%
Senior Notes due 2006" (the "Notes").
-19-
SECTION 2.2. Limitation on Aggregate Principal
Amount.
---------------------------------
The aggregate principal amount of the Notes shall be limited to
$400,000,000, and, except as provided in this Section and in Section 2.5 of the
Indenture, the Company shall not execute and the Trustee shall not authenticate
or deliver Notes in excess of such aggregate principal amount.
SECTION 2.3. Interest and Interest Rates;
Maturity Date of Notes.
----------------------------
The Notes will mature on August 1, 2006 and will be unsecured senior
obligations of the Company. Each Note will bear interest at the rate of 8 5/8%
per annum from August 4, 1999 or from the most recent interest payment date to
which interest has been paid, payable semi-annually on February 1 and August 1
in each year (each an "Interest Payment Date"), commencing February 1, 2000, to
the Person in whose name the Note (or any predecessor Note) is registered at the
close of business on the January 15 or July 15 next preceding such interest
payment date. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. The interest so payable on any Note which is
not punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the Person in whose name such Note is
registered on the relevant regular record date, and such defaulted interest
shall instead be payable to the Person in whose name such Note is registered on
the special record date or other specified date determined in accordance with
the Indenture.
If any Interest Payment Date or Stated Maturity falls on a day that is
not a Business Day, the required payment shall be made on the next Business Day
as if it were made on the date such payment was due and no interest shall accrue
on the amount so payable for the period from and after such Interest Payment
Date or Stated Maturity, as the case may be.
SECTION 2.4. Optional Redemption.
-------------------
The Notes will be redeemable, in whole or in part, at the option of
the Company at any time at a redemption price equal to the greater of (i) 100%
of the principal amount of such Notes, and (ii) as determined by the Quotation
Agent, the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of
interest accrued as of the date of redemption) discounted to the date of
redemption on a semi-annual basis
-20-
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate plus 50 basis points, plus, in each case, accrued interest thereon
to the date of redemption.
In the event that less than all of the Notes are to be redeemed at any
time pursuant to an optional redemption, selection of such Notes for redemption
will be made by the Trustee in compliance with the requirements of the principal
United States securities exchange, if any, on which the Notes are listed or, if
the Notes are not then listed on a United States securities exchange, on a pro
rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that no Notes of a principal amount of $1,000 or
less shall be redeemed in part; provided, further, however, that if a partial
redemption is made with the net cash proceeds of a Public Equity Offering by the
Company, selection of the Notes or portions thereof for redemption shall be made
by the Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of The Depository Trust Company), unless
such method is otherwise prohibited. A new Note in a principal amount equal to
the unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of the original Note.
SECTION 2.5. Sinking Fund.
------------
The Notes are not entitled to the benefit of any sinking fund.
SECTION 2.6. Method of Payment.
-----------------
Settlement for the Notes will be made in same day funds. All payments
of principal and interest will be made by the Company in same day funds. The
Notes will trade in the Same-Day Funds Settlement System of The Depositary Trust
Company (the "Depositary" or "DTC") until maturity, and secondary market trading
activity for the Notes will therefore settle in same day funds.
Principal of, premium, if any, and interest on the Notes will be
payable, and the Notes will be exchangeable and transferable, at the office or
agency of the Company in the City of New York maintained for such purposes
(which initially will be the Trustee); provided, however, that payment of
interest
-21-
may be made at the option of the Company by check mailed to the Person entitled
thereto as shown on the security register.
SECTION 2.7. Currency.
--------
Principal and interest on the Notes shall be payable in United States
Dollars or 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.
SECTION 2.8. Registered Securities; Global
Form.
-----------------------------
The Notes shall be issuable only in fully registered form without
coupons, in denominations of $1,000 and any integral multiple thereof. The
Notes shall initially be represented by one or more global notes (the "Global
Notes"). No service charge will be made for any registration of transfer,
exchange or redemption of Notes, except in certain circumstances for any tax or
other governmental charge that may be imposed in connection therewith. The
depository for the Global Notes shall be the DTC.
Each owner of a beneficial interest in a Global Note ("Book-Entry
Interests") will receive a definitive registered Note (i) if Euroclear, Cedel or
DTC notifies the Company that it is unwilling or unable to act as a clearing
agency or, in the case of DTC only, DTC ceases to be a clearing agency
registered under the Exchange Act, and in each case a successor is not appointed
by the Company within 90 days after receiving such notice from Euroclear, Cedel
or DTC or on becoming aware that DTC is no longer so registered or (ii) in the
event of an Event of Default under this Supplemental Indenture, upon request of
the Holders of a majority in aggregate principal amount of the outstanding
Notes. In such an event, each owner of a beneficial interest in the Global Note
will receive a physical certificate for the Notes equal in principal amount to
such owner's beneficial interest, registered in such owner's name.
SECTION 2.9. Form of Notes.
-------------
The Notes shall be substantially in the form attached as Exhibit A
hereto.
-22-
ARTICLE THREE
COVENANTS
---------
The following covenants shall apply to the Notes (but not with respect
to any other series of Debt Securities), and are in addition to the covenants
set forth in Article IV of the Indenture. With respect to the Notes (but not
with respect to any other series of Debt Securities), to the extent inconsistent
with the covenants contained in Article IV of the Indenture the covenants set
forth in this Supplemental Indenture shall govern.
SECTION 3.1. 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
Restricted Subsidiary shown to be due on any return of the Company or any
Restricted Subsidiary or otherwise assessed or upon the income, profits or
property of the Company or any Restricted 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
Restricted Subsidiary, except for any Lien permitted to be incurred under
Section 3.7, 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 3.2. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or
any Restricted Subsidiary or used or held for use in the conduct of its business
or the business of any
-23-
Restricted 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 Restricted Subsidiary and not reasonably
expected to have a material adverse effect on the ability of the Company to
perform its obligations hereunder.
SECTION 3.3. Insurance.
---------
The Company will at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company to be 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 3.4. Limitation on Indebtedness.
--------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (including any Acquired Indebtedness),
except that the Company and any Guarantor may Incur Indebtedness (including any
Acquired Indebtedness) and any Restricted 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 Restricted 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
-24-
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 Restricted 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, 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 equal to at least 2.00:1.00.
(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 Restricted Subsidiary under
the Credit Agreement in an aggregate principal amount at any one time
outstanding not to exceed an amount equal to the greater of (x) $1.0
billion, minus the amount of any repayment of such Indebtedness under the
Credit Agreement pursuant to Section 3.8, and (y) the Borrowing Base;
(ii) Indebtedness of the Company pursuant to the Notes outstanding
on the Issue Date and other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date (other than Indebtedness under
the Credit Agreement);
(iii) Indebtedness of any Guarantor pursuant to a Guarantee;
(iv) Indebtedness of the Company owing to a Restricted Subsidiary;
provided that any Indebtedness of the Company owing to a Restricted
Subsidiary that is not a Guarantor is made pursuant to an intercompany note
in the form attached to this Supplemental Indenture as Exhibit B and is
subordinated in right of payment from and after such time as the Notes
shall become due and payable (whether at Stated Maturity, acceleration or
otherwise) to the payment and performance of the Company's obligations
under the Notes; provided, further, that any disposition, pledge or
transfer of any such Indebtedness to a Person (other than a disposition,
pledge or transfer to a Restricted Subsidiary or a pledge to or for the
benefit of the lenders under the Credit Agreement) shall be deemed to
-25-
be an Incurrence of such Indebtedness by the obligor not permitted by this
clause (iv);
(v) Indebtedness of a Restricted Subsidiary owing to the Company or
a Wholly Owned Restricted Subsidiary; provided that, with respect to
Indebtedness owing to a Wholly Owned Restricted Subsidiary that is not a
Guarantor, (x) any such Indebtedness is made pursuant to an intercompany
note in the form attached to this Supplemental Indenture as Exhibit B 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 Restricted Subsidiary shall become due and payable to the payment and
performance of such Wholly Owned Restricted Subsidiary's obligations under
its Guarantee; provided further that (a) any disposition, pledge or
transfer of any such Indebtedness to a Person (other than a disposition,
pledge or transfer to the Company or a Restricted 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
Restricted Subsidiary which has Indebtedness owing to the Company or any
other Restricted Subsidiary, ceases to be a Restricted Subsidiary shall be
deemed to be the Incurrence of Indebtedness by such Restricted Subsidiary
that is not permitted by this clause (v);
(vi) guarantees of any Restricted Subsidiary made in accordance with
the provisions of Section 3.9 of this Supplemental Indenture;
(vii) Hedging Obligations of the Company or any Guarantor entered
into in the ordinary course of business (and not for speculative purposes)
designed to protect against fluctuations in: (x) interest rates in respect
of Indebtedness of the Company or any of its Restricted 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, (y)
currencies or (z) commodities;
(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,"
-26-
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 (1) 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
(2) 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 $75.0 million outstanding at any one time in
the aggregate.
SECTION 3.5. Limitation on Restricted
Payments.
------------------------
(a) The Company will not, and will not permit any Restricted
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 Restricted 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 Subordinated Indebtedness;
-27-
(iv) declare or pay any dividend or distribution on any Capital
Stock of any Restricted Subsidiary to any Person (other than the Company or
any of its Restricted Subsidiaries) or purchase, redeem or otherwise
acquire or retire for value any Capital Stock of any Restricted Subsidiary
held by any Person (other than the Company or any of its Wholly Owned
Restricted Subsidiaries);
(v) Incur, create or assume any guarantee of Indebtedness of any
Affiliate (other than a Wholly Owned Restricted 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 Restricted
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 3.4; and (3) the aggregate amount of all such Restricted Payments
declared or made after the date of this Supplemental 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
December 1, 1998 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); plus
(B) the aggregate Net Cash Proceeds received after the date of the
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
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extent such proceeds are used to purchase, redeem or otherwise retire
Capital Stock or Subordinated Indebtedness as set forth below); plus
(C) the aggregate Net Cash Proceeds received after the date of the
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; plus
(D) the aggregate Net Cash Proceeds received after the date of the
Indenture by the Company from debt securities or Redeemable Capital Stock
that has been converted into or exchanged for Qualified Capital Stock of
the Company to the extent such debt securities or Redeemable Capital Stock
is originally sold for cash plus the aggregate Net Cash Proceeds received
by the Company at the time of such conversion or exchange; plus
(E) in the event the Company or any Restricted Subsidiary makes an
Investment in a Person that, as a result of or in connection with such
Investment, becomes a Restricted Subsidiary, an amount equal to the
Company's or any Restricted Subsidiary's existing Investment in such Person
that was previously treated as a Restricted Payment; plus
(F) so long as the Designation thereof was treated as a Restricted
Payment made after the Issue Date, with respect to any Unrestricted
Subsidiary that has been redesignated as a Restricted Subsidiary after the
Issue Date in accordance with Section 3.13, an amount equal to the
Company's Investment in such Unrestricted Subsidiary (provided that such
amount shall not in any case exceed the Designation Amount with respect to
such Restricted Subsidiary upon its Designation); plus
(G) $50.0 million; minus
(H) the Designation Amount (measured as of the date of Designation)
with respect to any Subsidiary of the Company which has been designated as
an Unrestricted Subsidiary after the Issue Date in accordance with Section
3.13.
(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
-29-
provisions shall not prohibit the following actions (clauses (i) through (iv)
being referred to as a "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 3.5 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 3.5;
(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 or in which 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 3.5;
(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 Cash 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 3.5;
(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 (x) the stated amount of any premium,
interest or other payment
-30-
required to be paid in connection with such a refinancing pursuant to the
terms of the Indebtedness being refinanced or (y) 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 the remaining Average Life to Stated Maturity
of the Notes; (3) has a Stated Maturity for its final scheduled principal
payment later than the Stated Maturity for the final scheduled principal
payment of the Notes; and (4) is expressly subordinated in right of payment
to the Notes at least to the same extent as the Indebtedness to be
refinanced.
SECTION 3.6. Limitation on Transactions with
Affiliates.
-------------------------------
The Company will not, and will not permit any of its Restricted
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 Restricted
Subsidiary) unless (i) such transaction or series of transactions is in writing
on terms that are no less favorable to the Company or such Restricted
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 $10.0 million, 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 $25.0 million, the Company delivers to
the Trustee an opinion of either an independent investment banking firm of
national standing in the United States or an independent public accounting firm
of national standing in the United States, stating that the transaction or
series of transactions is fair to the Company or such Restricted Subsidiary;
provided, however, that this provision shall 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).
-31-
SECTION 3.7. Limitation on Liens.
-------------------
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, Incur, affirm or suffer to exist any Lien of
any kind upon any of its property or assets (including any intercompany notes),
owned at the date of this Supplemental Indenture or acquired after the date of
this Supplemental Indenture, or any income or profits therefrom, except if the
Notes (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 Supplemental 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 or
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 Restricted
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
-32-
use of real property not interfering with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries; (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; or (9)
standard custodial, bailee or depository arrangements (including (x) in
respect of deposit accounts with banks and other financial institutions and
(y) standard customer agreements in respect of accounts for the purchase
and sale of securities and other property with brokerage firms or other
types of financial institutions);
(c) any Lien now or hereafter existing on property of the Company or
any Guarantor securing Indebtedness outstanding under the Credit Agreement;
(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 Restricted Subsidiary, in each case
which Indebtedness is permitted under the provisions of Section 3.4;
provided that any such Lien only extends to the assets that were subject to
such lien securing such Acquired Indebtedness prior to the related
transaction by the Company or its Restricted 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 3.8. Limitation on Sale of Assets.
----------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale (other than an
Asset Swap permitted by clause (g) below of this Section 3.8) unless (i) at
least 75% of the proceeds from such Asset Sale are received in cash; provided,
however, that the amount of (A) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet or the notes thereto) of
the Company or any Restricted Subsidiary that are assumed by the transferee in
such Asset Sale and from which the Company or such Restricted Subsidiary is
released and (B) any notes or other obligations received by the Company or any
such Restricted Subsidiary from
-33-
such transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash, shall be deemed cash for purposes of this Section 3.8, and
(ii) the Company or such Restricted 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 secured Indebtedness then
outstanding as required by the terms thereof, or the Company determines not to
apply such Net Cash Proceeds to the permanent repayment of such secured
Indebtedness or if no such secured Indebtedness is then outstanding, then the
Company may within 12 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 or the applicable Restricted Subsidiary) 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 Restricted Subsidiaries as
existing at such time or reasonably related thereto. The amount of such Net
Cash Proceeds neither used to permanently repay or prepay secured 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 Notes
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 Notes in accordance
with the procedures set forth in this Supplemental Indenture in the maximum
principal amount (expressed as a multiple of $1,000) of Notes that may be
purchased out of an amount (the "Note Amount") equal to the product of such
Excess Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Notes, and the denominator of which is the
sum of the outstanding principal amount of the Notes and such Pari Passu
Indebtedness (subject to proration in the event such amount is less than the
aggregate Offered Price (as defined below) of all Notes tendered) and (b) to the
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 (a
"Pari Passu Offer") in an amount (the "Pari
-34-
Passu Debt Amount") equal to the excess of the Excess Proceeds over the Note
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 Notes 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 Supplemental Indenture. To the extent that the
aggregate Offered Price of the Notes tendered pursuant to the Offer is less than
the Note 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 Restricted
Subsidiaries. Upon completion of the purchase of all the Notes 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) If the Company becomes obligated to make an Offer pursuant to
clause (c) above, the Notes 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 Note Amount is less than the aggregate Offered Price
of all Notes tendered.
(e) 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.
(f) 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
Supplemental Indenture) as such Indebtedness may be refinanced from time to
time, provided that such restrictions are no less favorable to the Holders of
Notes than those existing on the date of this Supplemental Indenture that would
materially impair the ability of the Company to make an Offer to purchase the
Notes or, if such Offer is made, to pay for the Notes tendered for purchase.
-35-
(g) The Company will not, and will not permit any Restricted
Subsidiary to, engage in any Asset Swaps, unless: (i) at the time of entering
into such Asset Swap, and immediately after giving effect to such Asset Swap, no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof; (ii) in the event such Asset Swap involves an
aggregate amount in excess of $10.0 million, the terms of such Asset Swap have
been approved by a majority of the members of the board of directors of the
Company which determination shall include a determination that the Fair Market
Value of the assets being received in such swap are at least equal to the Fair
Market Value of the assets being swapped and (iii) in the event such Asset Swap
involves an aggregate amount in excess of $20.0 million, the Company has also
received a written opinion from an independent investment banking firm of
nationally recognized standing that such Asset Swap is fair to the Company or
such Restricted Subsidiary, as the case may be, from a financial point of view.
(h) Subject to paragraphs (c) and (f) above, within 30 days after the
date on which the amount of Excess Proceeds equals or exceeds $10.0 million, the
Company shall send or cause to be sent by first-class mail, postage prepaid, to
the Trustee and to each Holder of the Notes, at its 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 Notes at the Offered Price;
(2) the Offer Date;
(3) the instructions a Holder must follow in order to have its Notes
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 3.14), (ii) a
description of material developments in the Company's business subsequent
to the date of the latest of
-36-
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.
(i) Holders electing to have Notes purchased hereunder will be
required to surrender such Notes 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 Notes purchased pursuant to this Section
3.8 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 Note in respect of
which such notice of withdrawal is being submitted, (3) the principal amount of
the Note (which shall be $1,000 or an integral multiple thereof) delivered for
purchase by the Holder as to which its election is to be withdrawn, (4) a
statement that such Holder is withdrawing its election to have such principal
amount of such Note purchased, and (5) the principal amount, if any, of such
Note (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 Notes 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 4.8 of the Indenture) 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 Notes 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 Notes or portions
thereof accepted for payment by the Company.
Subject to applicable escheat laws, as provided in the Notes, 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 Offering Price; provided, however, that, (x) to the extent that the
aggregate amount of cash deposited by the Company with the Trustee in respect of
an Offer exceeds the aggregate Offered
-37-
Price of the Notes 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) Notes 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 Notes 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 Note 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 Note for purchase in
accordance with the foregoing provisions, such Note shall be paid by the Company
at the Offered Price; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Offer Date shall be payable to the Holders
of such Notes, registered as such on the relevant record dates according to the
terms and the provisions of Section 2.12 of the Indenture and Section 2.3 of
this Supplemental Indenture; provided, further, that Notes to be purchased are
subject to proration in the event the Excess Proceeds are less than the
aggregate Offered Price of all Notes tendered for purchase, with such
adjustments as may be appropriate by the Trustee so that only Notes in
denominations of $1,000 or integral multiples thereof, shall be purchased. If
any Note 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 Note. Any
Note 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 note registrar
designated pursuant to Section 4.2 of the Indenture or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the note 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 Note, without service charge, one or more new Notes 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 Note so
surrendered that is not purchased.
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SECTION 3.9. Limitation on Guarantees by
Restricted Subsidiaries.
---------------------------
In the event the Company (i) organizes or acquires any Domestic
Restricted Subsidiary after the Issue Date that is not a Guarantor and causes or
permits such Restricted Subsidiary to, directly or indirectly, guarantee the
payment of any Indebtedness ("Other Indebtedness") of the Company or any
Guarantor or (ii) causes or permits any Foreign Restricted Subsidiary that is
not a Guarantor to, directly or indirectly, guarantee the payment of any Other
Indebtedness, then, in each case the Company shall cause such Restricted
Subsidiary to simultaneously execute and deliver a supplemental indenture to the
Indenture pursuant to which it will become a Guarantor under the Indenture;
provided, however, that in the event a Domestic Restricted Subsidiary is
acquired in a transaction in which a merger agreement is entered into, such
Domestic Restricted Subsidiary shall not be required to execute and deliver such
supplemental indenture until the consummation of the merger contemplated by any
such merger agreement; provided, further, that if such Other Indebtedness is (i)
Indebtedness that is ranked pari passu in right of payment with the Notes or the
Guarantees of such Restricted Subsidiary, as the case may be, the Guarantee of
such Restricted Subsidiary shall be pari passu in right of payment with the
guarantee of the Other Indebtedness; or (ii) Subordinated Indebtedness, the
Guarantees of such Restricted Subsidiary shall be senior in right of payment to
the guarantee of the Other Indebtedness (which guarantee of such Subordinated
Indebtedness shall provide that such guarantee is subordinated to the Guarantees
of such Subsidiary to the same extent and in the same manner as the Other
Indebtedness is subordinated to the Notes or the Guarantee of such Restricted
Subsidiary, as the case may be).
If the Notes are defeased in accordance with the terms of Article Four
of this Supplemental Indenture, or if, subject to the requirements of Article
Six of this Supplemental Indenture, all or substantially all of the assets of
any Guarantor or all of the Capital Stock of any Guarantor are sold (including
by issuance or otherwise) by the Company in a transaction constituting an Asset
Sale, and if (x) the Net Cash Proceeds from such Asset Sale are used in
accordance with Section 3.8 or (y) the Company delivers to the Trustee an
Officers' Certificate to the effect that the Net Cash Proceeds from such Asset
Sale shall be used in accordance with Section 3.8 and within the time limits
specified by such Section, then such Guarantor or the Guarantors, as the case
may be (in the event of a defeasance of the Notes or sale or other disposition
of
-39-
all of the Capital Stock of such Guarantor), or the corporation acquiring
such assets (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) shall be released and discharged of its
Guarantee obligations in respect of the Indenture, the Supplemental Indenture
and the Notes.
Any Guarantor that is designated an Unrestricted Subsidiary pursuant
to and in accordance with Section 3.13 shall upon such Designation be released
and discharged of its Guarantee obligations in respect of the Indenture, the
Supplemental Indenture and the Notes and any Unrestricted Subsidiary whose
Designation is revoked pursuant to Section 3.13 will be required to become a
Guarantor in accordance with Article Eight.
In addition, a Guarantee of a Guarantor shall be released upon the
sale or transfer of all or substantially all of the assets or all of the Capital
Stock of such Guarantor; provided, that either (i) such sale or transfer
--------
complies with the provisions set forth in Section 3.8 or (ii) such sale or
transfer need not comply with the provisions set forth in Section 3.8 because
the assets or Capital Stock so sold or transferred does not constitute an "Asset
Sale" by operation of the provisions of clause (y) of the last sentence of the
definition of Asset Sale.
SECTION 3.10. Purchase of Notes upon a Change
of Control.
-------------------------------
(a) If a Change of Control shall occur at any time, then each Holder
of Notes shall have the right to require that the Company purchase such Holder's
Notes in whole or in part in integral multiples of $1,000, at a purchase price
(the "Change of Control Purchase Price") in cash in an amount equal to 101% of
the principal amount of such Notes, 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 (b) 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, give written notice (a "Change of Control Purchase
Notice") of such Change of Control to each Holder by first-class mail, postage
prepaid, at its address appearing in the Security Register stating or including:
-40-
(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 Notes 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 3.13), (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 3.10 and that all Notes properly tendered pursuant to the Change of
Control Offer will be accepted for payment at the Change of Control
Purchase Price;
(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 4.2 of the Indenture;
(8) that Notes 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
-41-
referred to in Section 4.2 of the Indenture to collect payment;
(9) that the Change of Control Purchase Price for any Note 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 Notes and Change of
Control Purchase Notice;
(11) that any Note 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 Notes 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 Notes, the
Holder of the Note in respect of which such proper tender was made shall (unless
the tender of such Note is properly withdrawn) thereafter be entitled to receive
solely the Change of Control Purchase Price with respect to such Note. Upon
surrender of any such Note for purchase in accordance with the foregoing
provisions, such Note shall be paid by the Company at the Change of Control
Purchase Price; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Change of Control Purchase Date shall be payable
to the Holders of such Notes registered as such on the relevant record dates
according to the terms and the provisions of Section 2.3. If any Note 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 Note. Holders electing to
have Notes purchased will be required to surrender such Notes 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 Control Purchase Date. Any Note 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 note registrar designated pursuant to
Section 4.2 of the Indenture or the Trustee so requires, due endorsement by, or
a written instrument of transfer in form satisfactory to the Company and the
note 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
-42-
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Note, without service charge, one or more new Notes 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
Note so surrendered that is not purchased.
(d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Notes 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
Notes 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 Notes or
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Notes so accepted payment in an amount
equal to the Change of Control Purchase Price of the Notes 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 Note equal in principal
amount to any unpurchased portion of the Note surrendered. Any Notes 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 3.10, 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 Note 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 4.2 of the Indenture 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 Note in respect of which such notice
of withdrawal is being submitted;
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(3) the principal amount of the Note (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 Note (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 Notes, 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,
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 Notes 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
Supplemental Indenture) that would materially impair the ability of the Company
to make a Change of Control Offer to purchase the Notes or, if such Change of
Control Offer is made, to pay for the Notes tendered for purchase.
SECTION 3.11. Limitation on Restricted
Subsidiary Capital Stock.
-------------------------
The Company will not permit any Restricted 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 Restricted Subsidiary, (ii) Capital Stock issued
by a Person prior to the time (A) such Person becomes a Restricted Subsidiary,
-44-
(B) such Person merges with or into a Restricted Subsidiary or (C) a Restricted
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), and (iii) Capital Stock issued or
sold by a Restricted Subsidiary where, immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary.
SECTION 3.12. Limitation on Dividends and Other
Payment Restrictions Affecting
Restricted Subsidiaries.
---------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted 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 Restricted Subsidiary of the Company, (iii) make any Investment in the
Company or a Restricted Subsidiary of the Company or (iv) transfer any of its
properties or assets to the Company or any Restricted Subsidiary, except (a) any
encumbrance or restriction pursuant to an agreement in effect on the date of
this Supplemental Indenture; (b) any encumbrance or restriction, with respect to
a Restricted Subsidiary that was not a Restricted Subsidiary of the Company on
the date of this Supplemental Indenture, in existence at the time such Person
becomes a Restricted 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 Restricted 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 Notes 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 Supplemental 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 3.8 is to be consummated, so long as such restriction or
encumbrance shall be effective only for a period from the execution and delivery
-45-
of such agreement or instrument through a termination date not later than 270
days after such execution and delivery.
SECTION 3.13. Designation of Unrestricted
Subsidiaries.
---------------------------
The Company may designate after the Issue Date any Subsidiary of the
Company as an "Unrestricted Subsidiary" under this Supplemental Indenture (a
"Designation") only if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
(ii) at the time of and after giving effect to such Designation, the
Company could Incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the Consolidated Fixed Charge Coverage Ratio of the
first paragraph of Section 3.4(a); and
(iii) the Company would be permitted to make an Investment (other
than a Permitted Investment) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to Section 3.5(a) above in an
amount (the "Designation Amount") equal to the amount of the Company's
Investment in such Subsidiary on such date.
Neither the Company nor any Restricted Subsidiary shall at any time
(x) provide credit support for, subject any of its property or assets (other
than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of,
or guarantee, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness) or (y) be
directly or indirectly liable for any Indebtedness of any Unrestricted
Subsidiary. For purposes of the foregoing, the Designation of a Subsidiary of
the Company as an Unrestricted Subsidiary shall be deemed to include the
Designation of all of the Subsidiaries of such Subsidiary.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") only if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such
-46-
Revocation would, if Incurred at such time, have been permitted to be
Incurred for all purposes of the Indenture.
All Designations and Revocations must be evidenced by resolutions of
the Board of Directors of the Company, delivered to the Trustee certifying
compliance with the foregoing provisions.
SECTION 3.14. 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
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 3.15. 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 Supplemental Indenture and
-47-
the 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 Supplemental Indenture and the 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 Restricted Subsidiary
gives any notice or takes any other action with respect to a claimed default
(other than with respect to Indebtedness in the principal amount of less than
$10,000,000), the Company shall deliver to the Trustee by registered or
certified mail or 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 3.16. Waiver of Certain Covenants.
---------------------------
The Company may omit in a particular instance to comply with any
covenant or condition set forth in Sections 3.1 through 3.15, if, before or
after the time for such compliance, the Holders of not less than a majority in
aggregate principal amount of the Notes 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.
SECTION 3.17. Limitation of Applicability of
Certain Covenants if Notes Rated
Investment Grade.
--------------------------------
Notwithstanding the foregoing, the Company's and its Restricted
Subsidiaries' obligations to comply with the provisions of this Supplemental
Indenture described in Sections 3.4, 3.5, 3.6, 3.11, 3.12, 3.13 and 6.1(a)(iv)
will terminate and cease to have any further effect from and after the first
date when the Notes are rated Investment Grade.
-48-
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
---------------------------------------
The following provisions of this Article Four shall apply to the Notes
(but not with respect to any other series of Debt Securities) and shall replace
(solely with respect to the Notes and not with respect to any other series of
Debt Securities) in its entirety the provisions set forth in Article IV of the
Indenture.
SECTION 4.1. Satisfaction and Discharge of
Indenture.
-----------------------------
This Supplemental Indenture and the Indenture (solely with respect to
the Notes and not with respect to any other series of Debt Securities) shall
cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of the Notes 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 Supplemental
Indenture and the Indenture (solely with respect to the Notes and not with
respect to any other series of Debt Securities), when
(a) either
(1) all the Notes theretofore authenticated and delivered (other
than (i) Notes which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.9 of the Indenture
or (ii) all Notes 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 5.6 of the Indenture) have been
delivered to the Trustee cancelled or for cancellation; or
(2) all such Notes not theretofore delivered to the Trustee
canceled 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
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or any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee in trust for such purpose an amount in
United States dollars sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee
canceled or for cancellation, including 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 relating to the satisfaction and discharge of this Supplemental
Indenture and the 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 Supplemental Indenture, the 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 4.1
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 Supplemental
Indenture and the Indenture, the obligations of the Company to the Trustee under
Section 11.2 of the Indenture and, if United States dollars shall have been
deposited with the Trustee pursuant to subclause (2) of Subsection (a) of this
Section 4.1, the obligations of the Trustee under Section 4.2 and Section 4.8 of
the Indenture shall survive.
SECTION 4.2. Application of Trust Money.
--------------------------
Subject to the provisions of Section 4.8 of the Indenture, all United
States dollars deposited with the Trustee pursuant to Section 4.1 shall be held
in trust and applied by it, in accordance with the provisions of the Notes, the
Indenture
-50-
and this Supplemental 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 Notes 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.
SECTION 4.3. Termination of Company's
Obligations.
------------------------
The Company may, provided that no Default or Event of Default has
occurred and is continuing or would arise therefrom (or, with respect to a
Default or Event of Default specified in Section 5.1(h) or (i), occurs at any
time on or prior to the 91st calendar day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until after
such 91st day)) and provided that no default under any Senior Indebtedness would
result therefrom, terminate its and its Restricted Subsidiaries' substantive
obligations in respect of Article Three of this Supplemental Indenture (other
than Sections 3.14 and 3.15) and Article Four of the Indenture (other than
Sections 4.1, 4.2 and 4.3) and Article Six hereof and any Event of Default
specified in Section 5.1(c) or (d) by (i) depositing with the Trustee, under the
terms of an irrevocable trust agreement, cash in United States dollars or United
States Government Obligations (or a combination thereof) sufficient (without
reinvestment) to pay all remaining Indebtedness on the Notes, (ii) delivering to
the Trustee an opinion of counsel in the United States reasonably acceptable to
the Trustee confirming that the holders of the Notes will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
termination and will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such termination had not occurred, (iii) delivering to the Trustee an officers'
certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Notes over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others, (iv) delivering to the Trustee an opinion of
counsel to the effect that (A) the trust funds will not be subject to any rights
of holders of Indebtedness of the Company other than the Notes and (B) assuming
no intervening bankruptcy of the Company between the date of deposit and the
-51-
91st day following the deposit and that no Holder of the Notes is an insider of
the Company, after the 91st day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally, (v)
delivering to the Trustee an Opinion of Counsel to the effect that the Company's
exercise of its option under this Section 4.3 will not result in any of the
Company, the Trustee or the trust created by the Company's deposit of funds
pursuant to this provision becoming or being deemed to be an "investment
company" under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and (vi) delivering to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating compliance with all conditions precedent
provided for herein. In addition, the Company may, provided that no Default or
Event of Default has occurred and is continuing or would arise therefrom (or,
with respect to a Default or Event of Default specified in Section 5.1(h) or
(i), occurs at any time on or prior to the 91st calendar day after the date of
such deposit (it being understood that this condition shall not be deemed
satisfied until after such 91st day)) and provided that no default under any
Indebtedness would arise therefrom, terminate all of its and the Guarantors'
substantive obligations in respect of the Notes (including its obligations to
pay the principal of and interest on the Notes and the Guarantors' Guarantee
thereof) by (i) depositing with the Trustee, under the terms of an irrevocable
trust agreement, cash in United States dollars or United States Government
Obligations sufficient (without reinvestment) to pay all remaining Indebtedness
on the Notes, (ii) delivering to the Trustee an opinion of counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Supplemental Indenture, there has been a
change in the applicable federal income tax law, in either case to the effect
that, and based thereon such opinion of counsel shall confirm that, the holders
of the Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such termination 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 had such termination not occurred, (iii) delivering to the Trustee
an officers' certificate stating that the deposit was not made by the Company
with the intent of preferring the holders of the Notes over any other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others, (iv) delivering to the
Trustee an opinion of counsel to the effect that (A) the trust funds will not be
subject to any rights of holders of Indebtedness of the Company other than the
Notes and (B) assuming no intervening bankruptcy
-52-
of the Company between the date of deposit and the 91st day following the
deposit and that no Holder of the Notes is an insider of the Company, after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally, (v) delivering to the Trustee an Opinion
of Counsel to the effect that the Company's exercise of its option under this
Section 4.3 will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" under the Investment Company Act and
(vi) delivering to the Trustee an Officers' Certificate and an Opinion of
Counsel each stating compliance with all conditions precedent provided for
herein.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.4, 2.6, 2.8, 2.9, 2.10, 2.12, 2.13, 4.1, 4.2, 11.2 and 11.6 of the
Indenture and Sections 4.4, 4.5 and 5.1 of this Supplemental Indenture shall
survive until the Notes are no longer outstanding. Thereafter, the Company's
obligations in Sections 4.4, 4.5 and 4.6 of this Supplemental Indenture shall
survive and Section 11.2 of the Indenture shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Notes, this Supplemental Indenture and the Indenture
except for those surviving obligations specified above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 4.3 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Notes.
SECTION 4.4. Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 4.3, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Supplemental Indenture and the Indenture solely to the
payment of principal of and interest on the Notes.
-53-
SECTION 4.5. Repayment to Company.
--------------------
Subject to Section 11.2 of the Indenture and Section 4.3 of this
Supplemental Indenture, the Trustee shall promptly pay to the Company upon
written request any excess money held by it at any time. The Trustee shall pay
to the Company upon written request any money held by it for the payment of
principal or interest that remains unclaimed for two years; provided, however,
that the Trustee before being required to make any payment may at the expense of
the Company cause to be published once in a newspaper of general circulation in
The City of New York or mail to each Holder entitled to such money notice that
such money remains unclaimed and that, after a date specified therein which
shall be at least 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining shall be repaid to the Company.
After payment to the Company, Holders entitled to money must look solely to the
Company for payment as general creditors unless an applicable abandoned property
law designates another person and all liability of the Trustee or Paying Agent
with respect to such money shall thereupon cease.
SECTION 4.6. Reinstatement.
-------------
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 4.3 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and the Guarantors' obligations under this Supplemental Indenture, the
Indenture, the Notes and the Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 4.3 until such time as the
Trustee is permitted to apply all such money or United States Government
Obligations in accordance with Section 4.3; provided, however, that if the
Company has made any payment of interest on or principal of any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
United States Government Obligations held by the Trustee.
-54-
ARTICLE FIVE
REMEDIES
The following provisions of this Article Five apply to the Notes (but
not with respect to any other series of Debt Securities) and shall replace in
its entirety Section 7.1 of the Indenture. To the extent any provisions of this
Article Five are inconsistent or conflict with any provisions contained in
Article Seven of the Indenture the provisions of this Article Five shall govern
with respect to the Notes (but not with respect to any other series of Debt
Securities).
SECTION 5.1. Events of Default.
-----------------
Whenever used herein or in the Indenture, an "Event of Default" 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 Seven of the
Indenture 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
Note when it becomes due and payable, and such default shall continue for a
period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Note 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 the
Indenture or this Supplemental 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 Notes,
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; (ii) there
-55-
shall be a default in the performance or breach of the provisions of
Article Six; (iii) the Company shall have failed to make or consummate an
Offer in accordance with the provisions of Section 3.8; or (iv) the Company
shall have failed to make or consummate a Change of Control Offer in
accordance with the provisions of Section 3.10;
(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 the Indenture, this Supplemental Indenture and any such
Guarantee;
(f) one or more judgments, orders or decrees for the payment of money
in excess of $15,000,000 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 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
-56-
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).
-57-
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 5.2. Acceleration of Maturity;
Rescission and Annulment.
-------------------------
If an Event of Default (other than an Event of Default specified in
Sections 5.1(h) and (i)) shall occur and be continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Notes then
outstanding may, and the Trustee at the request of the Holders of not less than
25% in aggregate principal amount of the Notes then outstanding shall, declare
all unpaid principal of, premium, if any, and accrued interest on all the Notes
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 Notes). If an Event of Default
specified in clause (h) or (i) of Section 5.1 occurs and is continuing, then all
the Notes shall ipso facto become and be immediately due and payable, in an
amount equal to the principal amount of the Notes, together with accrued and
unpaid interest, if any, to the date the Notes become due and payable, without
any declaration or other act on the part of the Trustee or any Holder.
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 Notes 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
11.2 of the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Notes, and
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes;
-58-
(b) all Events of Default, other than the non-payment of principal of
the Notes which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 7.5 of the Indenture; 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.
ARTICLE SIX
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
-----------------------------
The following provisions of this Article Six apply to the Notes (but
not with respect to any other series of Debt Securities) and shall replace in
its entirety Section 10.1 of the Indenture as it applies to the Notes (but not
with respect to any other series of Debt Securities).
SECTION 6.1. 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 Restricted 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 its Restricted 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
-59-
substantially all of the properties and assets of the Company and its
Restricted 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 Notes, the Indenture and this Supplemental 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 Supplemental
Indenture and the 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 the Indenture and this Supplemental Indenture) could incur
$1.00 of additional Indebtedness under Section 3.4 (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
the Indenture, this Supplemental Indenture and the Notes;
(vi) if any of the property or assets of the Company or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of Section 3.7 are complied with; and
(vii) the Company or the Surviving Entity shall have delivered, or
caused to be delivered, to the Trustee, in
-60-
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 the Indenture and this Supplemental Indenture and that all conditions
precedent therein or 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, the Indenture and this Supplemental
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 the Indenture and
this Supplemental Indenture, and thereafter all obligations of the
predecessor shall terminate.
The provisions of this Section 6.1(b) shall not apply to any transaction
(including any Asset Sale made in accordance with
-61-
Section 3.8) with respect to any Guarantor (i) if the Guarantee of such
Guarantor is released in connection with such transaction in accordance with the
last sentence of Section 3.9 or (ii) if such transaction need not comply with
the provisions set forth in Section 3.8 because the properties or assets so
sold, assigned, conveyed, transferred, leased or otherwise disposed of do not
constitute an "Asset Sale" by operation of the provisions of clause (y) of the
last sentence of the definition of Asset Sale.
SECTION 6.2. 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 (except, in the case of a Guarantor,
pursuant to a transaction set forth in the last paragraph of Section 6.1 (b)) in
accordance with Section 6.1, 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 Supplemental Indenture, the Indenture, the Notes 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
Notes and/or in the Guarantees, as the case may be. When a successor assumes
all the obligations of its predecessor under the Indenture and this Supplemental
Indenture, the Notes 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 Notes or a Guarantee, as the case may be.
ARTICLE SEVEN
MISCELLANEOUS PROVISIONS
------------------------
SECTION 7.1. Ratification of Indenture.
-------------------------
Except as expressly modified or amended hereby, the Indenture
continues in full force and effect and is in all respects confirmed and
preserved.
-62-
SECTION 7.2. Governing Law.
-------------
This Supplemental Indenture, the Notes and the Guarantees will be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflicts of law principles thereof. This
Supplemental Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, and shall, to the extent applicable, be governed by such
provisions.
SECTION 7.3. Counterparts.
------------
This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
ARTICLE EIGHT
GUARANTEES
----------
The following provisions of this Article Eight apply to the Notes (but
not with respect to any other series of Debt Securities) and shall replace in
its entirety Article Fourteen of the Indenture.
SECTION 8.1. Guarantors' Guarantee.
---------------------
For value received, each of the Guarantors, in accordance with this
Article Eight, 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 8.2. 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
-63-
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 the
Indenture and this Supplemental Indenture including those set forth in Article
Six. 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 Supplemental Indenture,
the Indenture and the Notes 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.
(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
Notes.
(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 3.9 of the Indenture.
(e) Except as provided herein, the provisions of this Article Eight
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,
-64-
warranties or promises now or at any time hereafter made by the Company to any
Guarantor.
SECTION 8.3. Guarantee Absolute.
------------------
The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Notes and this Supplemental 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 Supplemental Indenture, the Indenture or the Notes, 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 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 Supplemental Indenture, the
Indenture or the Notes, 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 per-
-65-
fecting, 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
Notes or of any Person liable directly as surety or otherwise by operation
of law or otherwise for the Notes, 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 8.14, 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
-66-
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 8.14, 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 Notes, 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.
SECTION 8.4. 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 Supplemental Indenture, the Indenture and the Notes. 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.
-67-
SECTION 8.5. 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 Supplemental Indenture, the Indenture or the Notes 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 Supplemental Indenture, the Indenture and the Notes 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.
SECTION 8.6. 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
-68-
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 Eight 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 4.1 shall apply to the Notes and the Guarantors shall be
responsible for the payment thereof to the Trustee or the Holders upon demand.
SECTION 8.7. 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 Eight.
SECTION 8.8. 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 8.9. Release of Security Interests.
-----------------------------
Without limiting the generality of the foregoing and except as
otherwise provided in this Supplemental 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,
-69-
shall not be affected by any and all releases for any 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 8.10. No Bar to Further Actions.
-------------------------
Except as provided by law, no action or proceeding brought or
instituted under Article Eight 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 Eight and this Guarantee by reason of any
further default or defaults under Article Eight and this Guarantee or in the
payment of any of the Indenture Obligations owing by the Company.
SECTION 8.11. 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 Eight 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 Eight shall limit the right of
the Trustee or the Holders to take any action to accelerate the maturity of the
Notes pursuant to Article Five or to pursue any rights or remedies hereunder or
under applicable law.
SECTION 8.12. Trustee's Duties; Notice to Trustee.
--------
(a) Any provision in this Article Eight or elsewhere in this
Supplemental Indenture or the Indenture allowing the Trustee to request any
information or to take any action
-70-
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 Supplemental Indenture and the 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.
SECTION 8.13. Successors and Assigns.
----------------------
All terms, agreements and conditions of this Article Eight shall
extend to and be binding upon each Guarantor and its successors and permitted
assigns and shall inure 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 Six.
SECTION 8.14. 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 Eight. 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
Supplemental Indenture and the Notes, 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 3.9.
-71-
SECTION 8.15. Execution of Guarantee.
----------------------
To evidence the Guarantee, each Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Exhibit C hereto, to be
endorsed on each Note authenticated and delivered by the Trustee and that this
Supplemental Indenture and the Indenture shall be executed on behalf of each
Guarantor by its Chairman of the Board, its President, its Chief Operating
Officer, its Chief Financial Officer, its Treasurer, one of its Vice Presidents,
or one of its other officers (or officer's of the Company) or any other person
(through power of attorney or otherwise) in each case duly authorized by such
Guarantor's board of directors, and attested by an authorized officer. The
signature of any of these officers on the Notes may be manual or facsimile.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
-----------------------
The following provisions of this Article Nine apply to the Notes (but
not with respect to any other series of Debt Securities) and shall replace in
their entirety Sections 12.1 and 12.2 of the Indenture. To the extent this
Article Nine is inconsistent with or conflicts with any provisions of Article
Nine in the Indenture the provisions of this Article Nine shall govern.
SECTION 9.1. 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 Notes, and the assumption by any
such successor of the covenants of the Company or such Guarantor or obligor
herein and in the Notes and in any Guarantee;
-72-
(b) to add to the covenants of the Company, any Guarantor or any other
obligor upon the Notes 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 Notes, as applicable, herein, in the Notes 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 Notes or in any Guarantee, or to make any other provisions
with respect to matters or questions arising under this Supplemental
Indenture, the Indenture, the Notes 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 Supplemental Indenture and the
Indenture under the Trust Indenture Act, as contemplated by Section 12.4 of
the Indenture or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 3.9;
(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 Supplemental Indenture, the
Indenture or otherwise.
SECTION 9.2. 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 Notes, 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 inden-
-73-
tures 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 Supplemental Indenture or the Indenture or of modifying in
any manner the rights of the Holders under this Supplemental Indenture, the
Indenture, the Notes or any Guarantee; provided, however, that no such
supplemental indenture, agreement or instrument shall, without the consent of
the Holder of each outstanding Note affected thereby:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof, or change the coin or currency in which the principal of any Note
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
redemption date thereof);
(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 3.8 or the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control in
accordance with Section 3.10, including amending, changing or modifying any
definitions with respect thereto;
(c) reduce the percentage in principal amount of the outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Supplemental Indenture or the
Indenture or certain defaults hereunder and their consequences provided for
in this Supplemental Indenture or the Indenture or with respect to any
Guarantee;
(d) modify any of the provisions of this Section 9.2, Section 7.5 of
the Indenture or Section 3.16 of this Supplemental Indenture, except to
increase any such percentage or to provide that certain other provisions of
this Supplemental Indenture or the Indenture cannot be modified or waived
without the consent of the Holder of each Note affected thereby;
-74-
(e) except as otherwise permitted under Article Six, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights
and obligations under this Supplemental Indenture or the Indenture; or
(f) amend or modify any of the provisions of this Supplemental
Indenture or the Indenture to cause the Notes or any Guarantee to be
subordinate to any other Indebtedness.
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
9.2 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.
-75-
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
CANANDAIGUA BRANDS, INC.
By:
---------------------------------
Name:
Title:
BATAVIA WINE CELLARS, INC.
By:
---------------------------------
Name:
Title:
BARTON INCORPORATED
By:
---------------------------------
Name:
Title:
BARTON BRANDS, LTD.
By:
---------------------------------
Name:
Title:
BARTON BEERS, LTD.
By:
---------------------------------
Name:
Title:
BARTON BRANDS OF CALIFORNIA, INC.
By:
---------------------------------
Name:
Title:
BARTON BRANDS OF GEORGIA, INC.
By:
---------------------------------
Name:
Title:
BARTON DISTILLERS IMPORT CORP.
By:
---------------------------------
Name:
Title:
BARTON FINANCIAL CORPORATION
By:
---------------------------------
Name:
Title:
STEVENS POINT BEVERAGE CO.
By:
---------------------------------
Name:
Title:
CANANDAIGUA LIMITED
By:
---------------------------------
Name:
Title:
MONARCH IMPORT COMPANY
By:
---------------------------------
Name:
Title:
CANANDAIGUA WINE COMPANY, INC.
By:
---------------------------------
Name:
Title:
THE VIKING DISTILLERY, INC.
By:
---------------------------------
Name:
Title:
CANANDAIGUA EUROPE LIMITED
By:
---------------------------------
Name:
Title:
ROBERTS TRADING CORP.
By:
---------------------------------
Name:
Title:
POLYPHENOLICS, INC.
By:
---------------------------------
Name:
Title:
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By:
---------------------------------
Name:
Title:
Attest:
------------------------------
Name:
Title:
Exhibit A to
Supplemental Indenture
Face of Note
THIS NOTE IS A GLOBAL NOTE 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 NOTE 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 NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 2.6 AND 2.13 OF THE INDENTURE AND SECTION 2.8
OF THE SUPPLEMENTAL INDENTURE./a/
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./b/
CANANDAIGUA BRANDS, INC.
_______________
8 5/8% SENIOR NOTE DUE 2006
CUSIP NO. 137 114 AB0
No. $
- ---------------------------
/a/ Include this legend on any Global Security.
/b/ Include this legend on any Global Security issued to Cede & Co. as nominee
of The Depository Trust Company.
CANANDAIGUA BRANDS, 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 August 1, 2006, at the office or agency of the Company referred to
below, and to pay interest thereon from August 4, 1999, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on August 1 and February 1, in each year, commencing February 1,
2000, at the rate of 8 5/8% per annum, in United States dollars, until the
principal hereof is paid or duly provided for. Interest shall be computed on
the basis of a 360-day year comprised of twelve 30-day months.
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 Note (or one or more predecessor Notes) is registered
at the close of business on the regular record date for such interest, which
shall be January 15 or July 15 (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 Notes, 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 Note (or one or more predecessor Notes) 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 Notes 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 Notes 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
Note 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
ap-
A-2
pear 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 Note 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 Note 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 Eight of the Supplemental 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 Note 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 BRANDS, INC.
By:
---------------------------------
Name:
Title:
Attest:
- -------------------------------
Authorized Officer
A-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 8 5/8% Senior Notes due 2006 referred to in the
within-mentioned Indenture.
As Trustee, Harris Trust and
Savings Bank
By:
---------------------------------
Name:
Title:
A-4
Reverse of Note
CANANDAIGUA BRANDS, INC.
8 5/8% SENIOR NOTE DUE 2006
This Note is one of a duly authorized issue of Notes of the Company
designated as its 8 5/8% Senior Notes due 2006 (herein called the "Notes"),
limited in aggregate principal amount to $200,000,000, issued under an indenture
(the "Basic Indenture") dated as of February 25, 1999, 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 (as
defined)), as supplemented by a supplemental indenture dated as of August 4,
1999 (the "Supplemental Indenture" and, together with the Basic Indenture, 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 Notes, and of the terms upon
which the Notes are, and are to be, authenticated and delivered. Capitalized
terms used herein without definition have the meanings assigned to such terms in
the Indenture.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Notes or (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Notes will be redeemable, in whole or in part, at the option of
the Company at any time at a redemption price equal to the greater of (i) 100%
of the principal amount of such Notes, and (ii) as determined by the Quotation
Agent, the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of
interest accrued as of the date of redemption) discounted to the date of
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate plus 50 basis points, plus, in each
case, accrued interest thereon to the date of 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 Notes in an amount
of $1,000 or integral mul-
A-5
tiples 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
repay secured 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 Notes and certain indebtedness ranking pari passu to the Notes.
In the case of any redemption or repurchase of Notes in accordance
with the Indenture, interest installments whose Stated Maturity is on or prior
to the redemption date will be available to the Holders of such Notes of record
as of the close of business on the relevant regular record date referred to on
the face hereof. Notes (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 Note in accordance
with the Indenture in part only, a new Note or Notes 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 Notes 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 Notes 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 Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company and the Guarantors with certain provisions of
the Indenture and the Notes and the Guarantees and their consequences. Any such
consent or waiver by or on behalf of the
A-6
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Notes (in the event such Guarantor or
other obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
If this Note is in certificated form, then as provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Note is registrable on the security register of the Company, upon surrender
of this Note 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 designated in accordance with Section 4.2 of
the Indenture duly executed by, the Holder hereof or its attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Note is a Global Security, it is exchangeable for a Note 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 Global Security if (x) DTC, Euroclear or Cedel
notifies the Company that it is unwilling or unable to continue as a clearing
agency or, in the case of DTC only, DTC ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, and in each
case a successor is not appointed by the Company within 90 days after receiving
such notice from Eurclear, Cedel or DTC or on becoming aware that DTC is no
longer so registered, or (y) in the event of an Event of Default under the
Indenture, upon request of the Holders of a majority in aggregate principal
amount of the outstanding Notes. Upon any such issuance, the Trustee is
required to register such certificated Notes in the name of,
A-7
and cause the same to be delivered to, such Person or Persons (or the nominee of
any thereof).
The Notes in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
No service charge shall be made for any registration of transfer or
exchange of Notes, 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 Note 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 Note is registered as the owner hereof for all purposes, whether or not
this Note is overdue, and neither the Company, the Trustee nor any agent shall
be affected by notice to the contrary.
THIS NOTE 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.
A-8
FORM OF TRANSFER NOTICE
-----------------------
I or we assign and transfer this Note 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 Note 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 Note)
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
A-9
EXHIBIT B
---------
INTERCOMPANY NOTE
__________
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 to 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 Brands, Inc., a Delaware corporation (the
"Company"), the guarantors a party thereto and Harris Trust and Savings Bank, as
trustee, dated as of February 25, 1998, as supplemented by Supplemental
Indenture No. 2 dated as of August 4, 1999 (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
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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
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("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.
Section 1.03 Subordination. All loans made to either of the Company
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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 Notes, the Guarantees or any other Indebtedness ranking pari
passu with the Notes, or any Guarantees, including, without limitation, any
Indebtedness incurred under the Credit Agreement; provided that with respect to
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a Subsidiary in any specific instance, such Subsidiary is also an obligor under
the Indenture, the Notes, 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
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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
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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.
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ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments, Etc. No amendment or waiver of any
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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 Notes.
Section 3.02 Assignment. No party to this Agreement may assign, in
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whole or in part, any of its rights and obligations under this intercompany
note, except to its legal successor in interest.
Section 3.03 Third Party Beneficiaries. The holders of the Notes or
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any other Indebtedness ranking pari passu with or senior to, the Notes 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
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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
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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
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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
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for payment, notice of protest and all other demands and notices in connection
with the delivery, acceptance, performance or enforcement hereof.
By:
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Name:
Title:
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BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL
Amount
Amount of Maturity of Principal Unpaid
Borrowing/ Borrowing/ Paid or Principal Notation
Date Principal Principal Prepaid Balance Made By
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EXHIBIT C
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GUARANTEES
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For value received, each of the undersigned hereby unconditionally
guarantees, jointly and severally, to the holder of this Note the payment of
principal of, premium, if any, and interest on this Note 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 Note, if lawful, and the payment or
performance of all other obligations of the Company under the Indenture or the
Notes, to the holder of this Note and the Trustee, all in accordance with and
subject to the terms and limitations of this Note and Article Eight of the
Supplemental Indenture. These Guarantees will not become effective until the
Trustee duly executes the certificate of authentication on this Note.
Dated:
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BATAVIA WINE CELLARS, INC.
Attest: By:
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Authorized Officer
BARTON INCORPORATED
Attest: By:
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Authorized Officer
BARTON BRANDS, LTD.
Attest: By:
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Authorized Officer
BARTON BEERS, LTD.
Attest: By:
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Authorized Officer
BARTON BRANDS OF CALIFORNIA, INC.
Attest: By:
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Authorized Officer
BARTON BRANDS OF GEORGIA, INC.
Attest: By:
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Authorized Officer
BARTON DISTILLERS IMPORT CORP.
Attest: By:
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Authorized Officer
THE VIKING DISTILLERY, INC.
Attest: By:
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Authorized Officer
BARTON FINANCIAL CORPORATION
Attest: By:
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Authorized Officer
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STEVENS POINT BEVERAGE CO.
Attest: By:
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Authorized Officer
CANANDAIGUA LIMITED
Attest: By:
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Authorized Officer
MONARCH IMPORT COMPANY
Attest: By:
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Authorized Officer
CANANDAIGUA WINE COMPANY, INC.
Attest: By:
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Authorized Officer
CANANDAIGUA EUROPE LIMITED
Attest: By:
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Authorized Officer
ROBERTS TRADING CORP.
Attest: By:
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Authorized Officer
POLYPHENOLICS, INC.
Attest: By:
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Authorized Officer
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