EXHIBIT 4.5
EXECUTION COPY
MICHAEL FOODS, INC.
8% SENIOR SUBORDINATED NOTES DUE 2013
INDENTURE
Dated as of November 20, 2003
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
CROSS-REFERENCE TABLE*
Trust Indenture Act Indenture
Section Section
- ------------------- ---------
310(a)(1)........................................................... 7.10
(a)(2)........................................................... 7.10
(a)(5)........................................................... 7.10
(b).............................................................. 7.10
(c).............................................................. N.A.
311(a).............................................................. 7.11
(b).............................................................. 7.11
312(a).............................................................. 2.05
(b).............................................................. 13.03
(c).............................................................. 13.03
313(a).............................................................. 7.06
(b)(2)........................................................... 7.06
(c).............................................................. 7.06
13.02
(d).............................................................. 7.06
314(a).............................................................. 4.03
13.05
(c)(1)........................................................... 13.04
(c)(2)........................................................... 13.04
(e).............................................................. 13.05
316(a)(last sentence)............................................... 2.09
(a)(1)(A)........................................................ 6.05
(a)(1)(B)........................................................ 6.04
317(a)(1)........................................................... 6.08
* This Cross-Reference Table is not part of this Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Other Definitions..............................................25
SECTION 1.03. Incorporation by Reference of Trust Indenture Act..............26
SECTION 1.04. Rules of Construction..........................................26
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating................................................27
SECTION 2.02. Execution and Authentication...................................27
SECTION 2.03. Registrar and Paying Agent.....................................28
SECTION 2.04. Paying Agent to Hold Money in Trust............................28
SECTION 2.05. Holder Lists...................................................29
SECTION 2.06. Transfer and Exchange..........................................29
SECTION 2.07. Replacement Notes..............................................40
SECTION 2.08. Outstanding Notes..............................................41
SECTION 2.09. Treasury Notes.................................................41
SECTION 2.10. Temporary Notes................................................41
SECTION 2.11. Cancellation...................................................42
SECTION 2.12. Defaulted Interest.............................................42
SECTION 2.13. CUSIP Numbers..................................................42
SECTION 2.14. Issuance of Additional Notes...................................42
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ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. Notices to Trustee..............................................42
SECTION 3.02. Selection of Notes to be Redeemed...............................43
SECTION 3.03. Notice of Redemption............................................43
SECTION 3.04. Effect of Notice of Redemption..................................44
SECTION 3.05. Deposit of Redemption Price.....................................44
SECTION 3.06. Notes Redeemed in Part..........................................44
SECTION 3.07. Optional Redemption.............................................44
SECTION 3.08. Mandatory Redemption............................................45
SECTION 3.09. Offer to Purchase...............................................45
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes................................................47
SECTION 4.02. Maintenance of Office or Agency.................................47
SECTION 4.03. Reports.........................................................48
SECTION 4.04. Compliance Certificate..........................................48
SECTION 4.05. Taxes...........................................................49
SECTION 4.06. Stay, Extension and Usury Laws..................................49
SECTION 4.07. Restricted Payments.............................................49
SECTION 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.........................................54
SECTION 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock......55
SECTION 4.10. Asset Sales.....................................................59
SECTION 4.11. Transactions with Affiliates....................................61
SECTION 4.12. Liens...........................................................63
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SECTION 4.13. Corporate Existence.............................................63
SECTION 4.14. Offer to Repurchase upon Change of Control......................63
SECTION 4.15. Limitation on Other Senior Subordinated Debt....................64
SECTION 4.16. [Reserved]......................................................65
SECTION 4.17. Limitation on Issuances of Guarantees of Indebtedness...........65
SECTION 4.18. Additional Guarantees...........................................65
SECTION 4.19. Business Activities.............................................65
SECTION 4.20. Designation of Restricted and Unrestricted Subsidiaries.........65
ARTICLE 5
SUCCESSORS
SECTION 5.01. Merger Consolidation, or Sale of Assets.........................66
SECTION 5.02. Successor Corporation Substituted...............................67
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default...............................................67
SECTION 6.02. Acceleration....................................................69
SECTION 6.03. Other Remedies..................................................69
SECTION 6.04. Waiver of Past Defaults.........................................70
SECTION 6.05. Control by Majority.............................................70
SECTION 6.06. Limitation on Suits.............................................70
SECTION 6.07. Rights of Holders of Notes to Receive Payment...................71
SECTION 6.08. Collection Suit by Trustee......................................71
SECTION 6.09. Trustee May File Proofs of Claim................................71
SECTION 6.10. Priorities......................................................72
SECTION 6.11. Undertaking for Costs...........................................72
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ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee...............................................72
SECTION 7.02. Rights of Trustee...............................................73
SECTION 7.03. Individual Rights of Trustee....................................74
SECTION 7.04. Trustee's Disclaimer............................................74
SECTION 7.05. Notice of Defaults..............................................74
SECTION 7.06. Reports by Trustee to the Holders of the Notes..................75
SECTION 7.07. Compensation and Indemnity......................................75
SECTION 7.08. Replacement of Trustee..........................................76
SECTION 7.09. Successor Trustee by Merger, etc................................77
SECTION 7.10. Eligibility; Disqualification...................................77
SECTION 7.11. Preferential Collection of Claims Against Company...............77
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance........77
SECTION 8.02. Legal Defeasance and Discharge..................................77
SECTION 8.03. Covenant Defeasance.............................................78
SECTION 8.04. Conditions to Legal Defeasance or Covenant Defeasance...........78
SECTION 8.05. Deposited Money and Cash Equivalents to be Held in Trust;
Other Miscellaneous Provisions..................................80
SECTION 8.06. Repayment to Company............................................80
SECTION 8.07. Reinstatement...................................................80
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. Without Consent of Holders of Notes.............................81
SECTION 9.02. With Consent of Holders of Notes................................82
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SECTION 9.03. Compliance with Trust Indenture Act.............................83
SECTION 9.04. Revocation and Effect of Consents...............................83
SECTION 9.05. Notation on or Exchange of Notes................................84
SECTION 9.06. Trustee to Sign Amendments, etc.................................84
SECTION 9.07. Payments for Consent............................................84
ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement to Subordinate.......................................84
SECTION 10.02. Liquidation; Dissolution; Bankruptcy...........................84
SECTION 10.03. Default on Designated Senior Debt..............................85
SECTION 10.04. Acceleration of Securities.....................................86
SECTION 10.05. When Distribution Must Be Paid Over............................86
SECTION 10.06. Notice by the Company..........................................86
SECTION 10.07. Subrogation....................................................87
SECTION 10.08. Relative Rights................................................87
SECTION 10.09. Subordination May Not Be Impaired by the Company...............87
SECTION 10.10. Distribution or Notice to Representative.......................87
SECTION 10.11. Rights of Trustee and Paying Agent.............................88
SECTION 10.12. Authorization to Effect Subordination..........................88
ARTICLE 11
NOTE GUARANTEES
SECTION 11.01. Guarantee......................................................88
SECTION 11.02. Subordination of Note Guarantee................................89
SECTION 11.03. Limitation on Guarantor Liability..............................89
SECTION 11.04. Execution and Delivery of Note Guarantee.......................90
SECTION 11.05. Guarantors May Consolidate, etc., on Certain Terms.............90
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SECTION 11.06. Releases Following Sale of Assets..............................91
SECTION 11.07. Severability...................................................91
ARTICLE 12
SATISFACTION AND DISCHARGE
SECTION 12.01. Satisfaction and Discharge....................................92
SECTION 12.02. Deposited Money and Government Securities to Be Held
in Trust......................................................93
SECTION 12.03. Repayment to the Company......................................93
SECTION 12.04. Survival......................................................93
SECTION 12.05. Reinstatement.................................................93
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls...................................94
SECTION 13.02. Notices........................................................94
SECTION 13.03. Communication by Holders of Notes with Other Holders
of Notes.......................................................95
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.............96
SECTION 13.05. Statements Required in Certificate or Opinion..................96
SECTION 13.06. Rules by Trustee and Agents....................................96
SECTION 13.07. No Personal Liability of Directors, Officers, Employees
and Stockholders...............................................96
SECTION 13.08. Governing Law..................................................97
SECTION 13.09. No Adverse Interpretation of Other Agreements..................97
SECTION 13.10. Successors.....................................................97
SECTION 13.11. Severability...................................................97
SECTION 13.12. Counterpart Originals..........................................97
SECTION 13.13. Table of Contents, Headings, etc...............................97
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF IAI CERTIFICATE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of November 20, 2003 among Michael Foods, Inc., a
Delaware corporation (the "Company"), the Guarantors (as defined below) and
Wells Fargo Bank Minnesota, National Association, a national banking
association, trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the 8% Senior
Subordinated Notes due 2013 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"144A Global Note" means a global note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in a denomination equal to the outstanding principal
amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Notes" means Notes (other than the Initial Notes) issued
under this Indenture in accordance with Sections 2.02 and 4.09 hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"Asset Acquisition" means (a) an Investment by the Company or any of
its Restricted Subsidiaries in any other Person if, as a result of such
Investment, such Person shall become a Restricted Subsidiary of the Company, or
shall be merged with or into the Company or any Restricted Subsidiary of the
Company, or (b) the acquisition by the Company or any
Restricted Subsidiary of the Company of all or substantially all of the assets
of any other Person or any division or line of business of any other Person.
"Asset Sale" means: (i) the sale, lease, conveyance or other
disposition of any assets or rights; provided that the sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company
and its Restricted Subsidiaries taken as a whole will be governed by Sections
4.14 and/or 5.01 hereof and not by Section 4.10 hereof; and (ii) the issuance or
sale of Equity Interests by any of the Company's Restricted Subsidiaries or the
sale of Equity Interests in any of its Subsidiaries.
Notwithstanding the foregoing, the following items shall not be deemed
to be Asset Sales:
(i) any single transaction or series of related transactions that
involves assets having a fair market value of less than $5.0 million;
(ii) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(iii) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary;
(iv) the sale, lease, sub-lease, license, sub-license or consignment,
as the case may be, of equipment, inventory, or other assets in the
ordinary course of business, including leases with a duration of no greater
than twenty-four months with respect to facilities which are temporarily
not in use or pending their disposition;
(v) the sale or other disposition of cash or Cash Equivalents;
(vi) a Restricted Payment or Permitted Investment that is permitted by
Section 4.07 hereof,
(vii) the licensing of intellectual property to third Persons on
customary terms as determined by the Board of Directors in good faith;
(viii) any sale of accounts receivable, or participations therein, in
connection with any Qualified Receivables Transaction;
(ix) any sale or disposition of any property or equipment that has
become damaged, worn-out, obsolete, condemned, given over in lieu of deed
or otherwise unsuitable or not required for the ordinary course of the
business of the Company and its Restricted Subsidiaries; and
(x) any sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments
2
during the remaining term of the lease included in such sale and leaseback
transaction, including any period for which such lease has been extended or may,
at the option of the lessor, be extended. Such present value shall be calculated
using a discount rate equal to the rate of interest implicit in such transaction
determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule l3d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Board of Directors" means (i) with respect to a corporation, the
board of directors of the corporation or committee thereof authorized to
exercise the power of the board of directors of such corporation; (ii) with
respect to a partnership, the Board of Directors of the general partner of the
partnership; and (iii) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Borrowing Base" means, as of any date, an amount equal to:
(i) 80% of the face amount of all accounts receivable owned by the
Company and its Restricted Subsidiaries as of the end of the most recent
fiscal quarter preceding such date that were not more than 90 days past
due; plus
(ii) 50% of the book value of all inventory owned by the Company and
its Restricted Subsidiaries of the end of the most recent fiscal quarter
preceding such date;
all calculated on a consolidated basis and in accordance with GAAP.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or a business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited), and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
3
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than 360 days from the date of acquisition, (iii)
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case,
with any domestic commercial bank having capital and surplus in excess of
$500,000,000, "a rating of "P-1" or better from Moody's Investor Service, Inc.
or "A-1" or better from Standard & Poor's Rating Services, (iv) repurchase
obligations for underlying securities of the types described in clauses (ii) and
(iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) commercial paper having the
highest rating obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Rating Services and in each case maturing within six months after the
date of acquisition, and (vi) money market funds at least 95% of the assets of
which constitute Cash Equivalents of the kinds described in clauses (i) through
(v) of this definition.
"Change of Control" means the occurrence of any of the following: (i)
the direct or indirect sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Parent and its Restricted Subsidiaries or the Company and its Restricted
Subsidiaries, in each case, taken as a whole, to any "person" (as that term is
used in Section 13(d)(3) of the Exchange Act) other than the Principals or the
Related Parties of the Principals, (ii) the adoption of a plan relating to the
liquidation or dissolution of the Parent or the Company, (iii) the consummation
of any transaction (including, without limitation, any merger or consolidation),
the result of which is that any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Principals and
their Related Parties, becomes the Beneficial Owner, directly or indirectly, of
more than 50% of the voting power of the Voting Stock of the Company or the
Parent, as the case may be; (iv) the first day on which a majority of the
members of the Board of Directors of the Parent or the Company are not
Continuing Directors, or (v) the Parent or the Company consolidates with, or
merges with or into, any Person, or any Person consolidates with, or merges with
or into, the Parent or the Company, in any such event pursuant to a transaction
in which any of the outstanding Voting Stock of the Parent, the Company or such
other Person is converted into or exchanged for cash, securities or other
property, other than any such transaction where (A) the Voting Stock of the
Parent or the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance) and (B) immediately after such
transaction, no "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50%
of the voting power of the Voting Stock of the surviving or transferee person.
"Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.
"Company" means Michael Foods, Inc., a Delaware corporation.
4
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period and,
without duplication plus (i) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period, to the extent that
such provision for taxes was deducted in computing such Consolidated Net Income;
plus (ii) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether or not paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income; plus (iii) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income; plus (iv) any
management fees paid by the Company to Vestar Capital Partners L.P. or the
Equity Sponsor, as the case may be, in such period, to the extent that any such
management fees were deducted in computing such Consolidated Net Income;
provided that the maximum aggregate amount of such management fees in any
12-month period shall not exceed the greater of $1.5 million and an amount equal
to 1.0% of the consolidated earnings before interest, taxes, depreciation and
amortization of the Company and its Subsidiaries for such period as computed in
the management agreements entered into in connection with the Mergers; minus (v)
non-cash items increasing such Consolidated Net Income for such period,
excluding any items which represent the reversal of any accrual of, or cash
reserve for, anticipated cash charges in any prior period.
Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(i) the Net Income of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall be
included only to the extent of
5
the amount of dividends or distributions paid in cash to the specified
Person or a Restricted Subsidiary thereof;
(ii) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(iii) the Net Income (or loss) of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded;
(iv) the cumulative effect of a change in accounting principles shall
be excluded;
(v) any increase in cost of sales as a result of the step-up in
inventory valuation arising from applying the purchase method of accounting
in accordance with GAAP in connection with any acquisition consummated
after the date hereof, net of taxes, shall be excluded;
(vi) non-cash charges relating to employee benefit or other management
compensation plans of the Parent (to the extent such non-cash charges
relate to plans of the Parent for the benefit of members of the Board of
Directors of the Company (in their capacity as such) or employees of the
Company and its Restricted Subsidiaries), the Company or any of its
Restricted Subsidiaries or any non-cash compensation charge arising from
any grant of stock, stock options or other equity-based awards, of the
Parent (to the extent such non-cash charges relate to plans of the Parent
for the benefit of members of the Board of Directors of the Company (in
their capacity as such) or employees of the Company and its Restricted
Subsidiaries), the Company or any of its Restricted Subsidiaries (excluding
any, in each case, non-cash charge to the extent that it represents an
accrual of or reserve for cash expenses in any future period or
amortization of a prepaid cash expense incurred in a prior period) in each
case, to the extent that such non-cash charges are deducted in computing
such Consolidated Net Income shall be excluded; and
(vii) any goodwill impairment charges shall be excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company or the Parent, as the case may
be, who: (i) was a member of such Board of Directors on the date hereof or the
date of the Mergers; or (ii) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing Directors who
were members of such Board at the time of such nomination or election.
6
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, to be dated as
of the date hereof, by and among the Company, THL Food Products Holding Co.,
Bank of America, N.A., as Administrative Agent, Deutsche Bank Securities Inc.
and UBS Securities LLC, as Co-Syndication Agents, and the other Lenders named
therein providing for up to $495.0 million in term loan borrowings and $100.0
million of revolving credit borrowings, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced,
restated, substituted or refinanced in whole or in part from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available borrowings
thereunder or adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement and the Senior Unsecured Term Loan
Agreement), commercial paper facilities or indentures, in each case with banks
or other institutional lenders or a trustee providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables), letters of credit or issuances of notes,
in each case, as amended, modified, renewed, refunded, replaced, restated,
substituted or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A hereto, except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means (i) any Indebtedness outstanding under
the Credit Agreement; and (ii) any other Senior Debt permitted hereunder the
principal amount of which that is committed and available to be drawn on is
$25.0 million or more and that has been designated by the Company as "Designated
Senior Debt." For purposes of determining whether
7
a particular issue of Senior Debt may qualify as "Designated Senior Debt," the
principal amount of one or more issues of Senior Debt owing to a common lender
(or its Affiliates) may be aggregated.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided that if such Capital Stock is issued to
any employee or to any plan for the benefit of employees of the Company or any
of its Subsidiaries or by any such plan to such employees, such Capital Stock
shall not constitute Disqualified Stock solely because it may be required to be
repurchased by the Company or such Subsidiary in order to satisfy applicable
statutory or regulatory obligations; and provided further that any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof have
the right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07.
"Domestic Subsidiary" means any Restricted Subsidiary that was formed
under the laws of the United States or any state thereof or the District of
Columbia or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company.
"Egg Products Division" means those operations and Subsidiaries of the
Company and its Restricted Subsidiaries which are principally engaged in the egg
products business.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering (including in a private placement)
of the Equity Interests (other than Disqualified Stock) of the Company or the
Parent, other than public offerings with respect to the Equity Interests
registered on Form S-8.
"Equity Sponsor" means Thomas H. Lee Partners, L.P., a Delaware
limited partnership.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer in
accordance with Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
8
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Excluded Contributions" means the net cash proceeds received by the
Company after the date of this Indenture from (a) contributions to its common
equity capital and (b) the sale (other than to a Subsidiary or to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement of the Company or any of its Subsidiaries) of Capital Stock
(other than Disqualified Stock) of the Company, in each case designated within
60 days of the receipt of such net cash proceeds as Excluded Contributions
pursuant to an Officers' Certificate, the cash proceeds of which are excluded
from the calculation set forth in clause (iii) of the second paragraph of
Section 4.07.
"Existing Indebtedness" means Indebtedness outstanding on the date
hereof, other than under the Credit Agreement, the Senior Unsecured Term Loan
Agreement and this Indenture.
"Fixed Charge Coverage Ratio" means, with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases or redeems any Indebtedness or issues,
repurchases or redeems Disqualified Stock or preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, repayment, repurchase or redemption
of Indebtedness, or such issuance, repurchase or redemption of Disqualified
Stock or preferred stock, and the use of the proceeds therefrom as if the same
had occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(i) the Recapitalization, Investments, acquisitions, dispositions,
mergers, consolidations and discontinued operations (as determined in
accordance with GAAP) that have been made by the Company or any Restricted
Subsidiary of the Company during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously
with the Calculation Date shall be calculated on a pro forma basis
including Pro Forma Cost Savings assuming that the Recapitalization and all
such Investments, acquisitions, dispositions, mergers, consolidations and
discontinued operations (and the change in any associated fixed charge
obligations and the change in EBITDA resulting therefrom) had occurred on
the first day of the four-quarter reference period. If since the beginning
of such period any Person (that subsequently became a Restricted Subsidiary
of the Company or was merged with or into the Company or any Restricted
Subsidiary of the Company since the beginning of such period) shall have
made any Investment, acquisition, disposition, merger, consolidation or
discontinued operation that would have required adjustment pursuant to this
definition, then the Fixed Charge Coverage Ratio shall be calculated giving
pro forma effect thereto for such period
9
as if such Investment,acquisition, disposition, merger, consolidation or
discontinued operation had occurred at the beginning of the applicable
four-quarter period; and
(ii) in calculating Fixed Charges attributable to interest on any
Indebtedness computed on a pro forma basis, (a) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Calculation Date
and which will continue to be so determined thereafter and shall be deemed
to have accrued at a fixed rate per annum equal to the rate of interest on
such Indebtedness in effect on the Calculation Date; (b) if interest on any
Indebtedness actually incurred on the Calculation Date may optionally be
determined at an interest rate based upon a factor of a prime or similar
rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the Calculation Date will be deemed to have been
in effect during the four-quarter period; and (c) notwithstanding clause
(a) above, interest on Indebtedness determined on a fluctuating basis, to
the extent such interest is covered by agreements relating to interest rate
swaps, caps or collars, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreement.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of: (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations; plus
(ii) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus (iii) any interest expense on
Indebtedness of another Person that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called
upon; plus (iv) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock or Disqualified Stock
of such Person or any of its Restricted Subsidiaries, other than dividends on
Equity Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary of the Company,
times (b) a fraction, the numerator of which is one and the denominator of which
is one minus the then current combined federal, state and local statutory tax
rate of such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP.
"Foreign Borrowing Base" means, as of any date, an amount equal to:
(i) 80% of the face amount of all accounts receivable owned by the
Foreign Restricted Subsidiaries as of the end of the most recent fiscal
quarter preceding such date that were not more than 90 days past due; plus
(ii) 50% of the book value of all inventory owned by the Foreign
Restricted Subsidiaries as of the end of the most recent fiscal quarter
preceding such date;
10
all calculated on a consolidated basis and in accordance with GAAP.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Company incorporated in any jurisdiction outside the United States.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect as of the date hereof.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, issued in accordance
with certain sections of this Indenture.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means:
(i) each direct or indirect Domestic Subsidiary of the Company; and
(ii) any other subsidiary of the Company that provides a Note
Guarantee in accordance with the provisions hereof;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(i) interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements and other agreements or arrangements
designed for the purpose of fixing, hedging or swapping interest rate risk,
(ii) commodity swap agreements, commodity option agreements, forward
contracts and other agreements or arrangements designed for the purpose of
fixing, hedging or swapping commodity price risk, and
11
(iii) foreign exchange contracts, currency swap agreements and other
agreements or arrangements designed for the purpose of fixing, hedging or
swapping foreign currency exchange rate risk.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means THL Food Products Holding Co., a Delaware corporation
and the immediate parent of the Company.
"Immaterial Guarantor" means any Guarantor that is an Immaterial
Subsidiary.
"Immaterial Subsidiary" means any Subsidiary of the Company that has
less than $100,000 in total assets.
"IAI Global Note" means the global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(i) borrowed money;
(ii) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(iii) banker's acceptances;
(iv) Capital Lease Obligations;
(v) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable; or
(vi) any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(i) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount;
12
(ii) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness;
and
(iii) with respect to Indebtedness of another Person secured by a Lien
on the assets of the Company or any of its Restricted Subsidiaries, the
lesser of the fair market value of the property secured or the amount of
the secured Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means $150,000,000 in aggregate principal amount of
Notes originally issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made a Restricted Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.07 hereof. The acquisition by the Company or any
Restricted Subsidiary of the Company of a Person that holds an Investment in a
third Person shall be deemed to be an Investment by the Company or such
Restricted Subsidiary in such third Person in an amount equal to the fair market
value of the Investment held by the acquired Person in such third Person in an
amount determined as provided in the final paragraph of Section 4.07 hereof.
"Issue Date" means the date on which $150,000,000 in aggregate
principal amount of the Notes were originally issued under this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which
commercial banks in The City of New York or at a place of payment are authorized
or required by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
13
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means the additional amounts (if any) payable by
the Company in the event of a Registration Default under, and as defined in, the
Registration Rights Agreement.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
October 10, 2003, by and among Holdings, THL Food Products, M-Foods Holdings,
M-Foods Investors, LLC, as representative of the Stockholders identified
therein, and the Stockholders identified therein.
"Mergers" means the merger of THL Food Products with and into M-Foods
Holdings, with M-Foods Holdings continuing as the surviving corporation, and the
subsequent merger of M-Foods Holdings with and into Michael Foods, with M-Foods
Holdings continuing as the surviving corporation and changing its name to
"Michael Foods, Inc.," all in accordance with the terms of the Merger Agreement.
"M-Foods Holdings" means M-Foods Holdings, Inc., a Delaware
corporation.
"Michael Foods" means Michael Foods, Inc., a Minnesota corporation.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however (i) any
gain (or loss), together with any related provision for taxes on such gain (or
loss), realized in connection with: (a) any Asset Sale (without reference to the
$5.0 million limitation); or (b) the disposition of any other assets by such
Person or any of its Restricted Subsidiaries (other than in the ordinary course
of business) or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and (ii) any extraordinary, unusual or nonrecurring
gain (or loss) (including nonrecurring gains or losses of the Company and its
Subsidiaries incurred in connection with the Merger Agreement and the related
refinancing), together with any related provision for taxes on such
extraordinary, unusual or nonrecurring gain (or loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale or disposition of such non-cash
consideration, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as a
result thereof, taxes paid or
14
payable as a result thereof, in each case, after taking into account any
available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness (other than
revolving credit Indebtedness, unless there is a required reduction in
commitments), secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any (1) reserve for adjustment in respect of the sale price
of such asset or assets established in accordance with GAAP and (2) reserve or
payment with respect to any liabilities associated with such asset or assets and
retained by the Company after such sale or other disposition thereof, including,
without limitation, severance costs, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.
"Non-Recourse Debt" means Indebtedness:
(i) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(ii) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the Notes) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and
(iii) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes, if any are issued, shall
be treated as a single class for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, costs, expenses and other liabilities
payable under the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Offering Memorandum" means the offering memorandum, dated November 6,
2003, relating to the offering of the Notes.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
15
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer, or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel that meets
the requirements of Section 13.05 hereof. The counsel may be an employee of or
counsel to the Company.
"Parent" means any direct or indirect parent company of the Company.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"Permitted Business" means any business conducted or proposed to be
conducted (as described in the Offering Memorandum) by the Company and its
Restricted Subsidiaries on the date hereof and other businesses reasonably
related or ancillary thereto.
"Permitted Investments" means:
(i) any Investment in the Company or in a Restricted Subsidiary of the
Company;
(ii) any Investment in Cash Equivalents;
(iii) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company;
or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or
is liquidated into, the Company or a Restricted Subsidiary of the
Company;
(iv) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale or other sale of assets that was made
pursuant to and in compliance with Section 4.10 of this Indenture;
(v) any Investment the payment for which consists of Equity Interests
(other than Disqualified Stock) of the Company or the Parent (which
Investment, in the case of the Parent, is contributed to the common equity
capital of the Company; provided that any such contribution shall be
excluded from Section 4.07(iii)(B) hereof).
(vi) Hedging Obligations;
(vii) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to
16
subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (vii) since the date hereof, not
to exceed $20.0 million;
(viii) any Investment of the Company or any of its Restricted
Subsidiaries existing on the date hereof;
(ix) loans to employees that are approved in good faith by a majority
of the Board of Directors of the Company in an amount not to exceed $3.0
million outstanding at any time;
(x) any Investment acquired by the Company or any of its Restricted
Subsidiaries:
(a) in exchange for any other Investment or accounts receivable
held by the Company or any such Restricted Subsidiary in connection
with or as a result of a bankruptcy, workout, reorganization or
recapitalization of a Person, or
(b) as a result of a foreclosure by the Company or any of its
Restricted Subsidiaries with respect to any secured Investment or
other transfer of title with respect to any secured Investment in
default;
(xi) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements with other
Persons;
(xii) Investments in joint ventures engaged in a Permitted Business
not in excess of $20.0 million in the aggregate outstanding at any one
time;
(xiii) Investments by the Company or a Restricted Subsidiary of the
Company in a Receivables Subsidiary or any Investment by a Receivables
Subsidiary in any other Person, in each case, in connection with a
Qualified Receivables Transaction; and
(xiv) any Guarantee otherwise permitted hereunder.
"Permitted Junior Securities" means (i) Equity Interests in the
Company or the Parent; or (ii) debt securities that are subordinated to all
Senior Debt and any debt securities issued in exchange for Senior Debt at least
to the same extent as, or to a greater extent than, the Notes and the Note
Guarantees are subordinated to Senior Debt as provided hereunder.
"Permitted Liens" means:
(i) Liens on the assets of the Company and any Guarantor securing
Senior Debt that was permitted by the terms hereof to be incurred;
(ii) Liens in favor of the Company or any Restricted Subsidiary of the
Company;
(iii) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any Restricted
Subsidiary of the
17
Company; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company or the Restricted Subsidiary;
(iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company; provided that such
Liens were in existence prior to the contemplation of such acquisition and
do not extend to any property other than the property so acquired by the
Company or the Restricted Subsidiary;
(v) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (iv) of Section 4.09 covering only the assets acquired
with such Indebtedness;
(vi) Liens of the Company and its Restricted Subsidiaries existing on
the date hereof;
(vii) Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary of the Company with respect to obligations
that do not exceed $5.0 million at any one time outstanding;
(viii) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other similar obligations
(exclusive of obligations for the payment of borrowed money) incurred in
the ordinary course of business;
(ix) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(x) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, including any Lien securing letters of credit
issued in the ordinary course of business consistent with past practice in
connection therewith;
(xi) Liens to secure Indebtedness of any Foreign Restricted Subsidiary
permitted by clause (xvi) of Section 4.09 covering only the assets of such
Foreign Restricted Subsidiary; and
(xii) Liens on assets of a Receivables Subsidiary arising in
connection with a Qualified Receivables Transaction.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(i) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if
18
applicable) of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus all accrued interest thereon and the amount of
any reasonably determined premium and other amounts necessary to accomplish
such refinancing and such reasonable fees and expenses incurred in
connection therewith);
(ii) such Permitted Refinancing Indebtedness has a final maturity date
equal to or later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life
to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
(iv) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Principals" means the Equity Sponsor and its Affiliates.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued hereunder except where otherwise
permitted by the provisions of this Indenture.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in net costs and related adjustments that (i) were directly
attributable to an Asset Acquisition that occurred during the four-quarter
period or after the end of the four-quarter period and on or prior to the
Calculation Date and calculated on a basis that is consistent with Regulation
S-X under the Securities Act as in effect and applied as hereof, (ii) were
actually implemented by the business that was the subject of any such Asset
Acquisition within six months after the date of the Asset Acquisition and prior
to the Calculation Date that are supportable and quantifiable by the underlying
accounting records of such business or (iii) relate to the business that is the
subject of any such Asset Acquisition and that the Company reasonably determines
are probable based upon specifically identifiable actions to be taken within six
months of the date of the Asset Acquisition and, in the case of each of (i),
(ii) and (iii), are described, as provided below, in an Officer's Certificate,
as if all such reductions in costs had been effected as of the beginning of such
period. Pro Forma Cost Savings described above shall be accompanied by a
certificate delivered to the Trustee from the Company's Chief Financial Officer
that outlines the specific actions taken or to be taken, the net cost savings
achieved or to be achieved from each such
19
action and that, in the case of clause (iii) above, such savings have been
determined to be probable.
"Public Equity Offering" means an offer and sale for cash of common
stock (other than Disqualified Stock) of the Company or the Parent pursuant to a
registration statement that has been declared effective by the SEC pursuant to
the Securities Act (other than a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company).
"Purchase Money Note" means a promissory note evidencing a line of
credit, or evidencing other Indebtedness, owed to the Company or any Restricted
Subsidiary of the Company in connection with a Qualified Receivables
Transaction, which note shall be repaid from cash available to the maker of such
note, other than amounts required to be established as reserves pursuant to
agreement, amounts paid to investors in respect of interest, principal and other
amounts owning to such investors and amounts paid in connection with the
purchase of newly generated receivables.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or by any Restricted
Subsidiary of the Company pursuant to which the Company or any Restricted
Subsidiary of the Company may sell, convey or otherwise transfer to a
Receivables Subsidiary, any accounts receivable (whether now existing or arising
in the future) of the Company or any Restricted Subsidiary of the Company and
any asset related thereto, including, without limitation, all collateral
securing such accounts receivable, and all guarantees or other obligations in
respect of such accounts receivable, proceeds of such accounts receivable and
other assets that are customarily transferred, or in respect of which security
interests are customarily granted, in connection with an asset securitization
transaction involving accounts receivable.
"Recapitalization" means the Mergers and all related transactions as
described in the Offering Memorandum.
"Receivables Subsidiary" means a Subsidiary of the Company (other than
a Guarantor) that engages in no activities other than in connection with the
financing of accounts receivables and that is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary (a) no
portion of the Indebtedness or any other Obligations (contingent or otherwise)
of which (i) is guaranteed by the Company or any other Restricted Subsidiary of
the Company (excluding guarantees of obligations (other than the principal of,
and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings), (ii) is recourse to or obligates the Company or any other
Restricted Subsidiary of the Company in any other way other than pursuant to
Standard Securitization Undertakings or (iii) subjects any property or asset of
the Company or any other Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings, (b) with which neither the
Company nor any other Restricted Subsidiary of the Company has any material
contract, agreement, arrangement or understanding (except in connection with a
Purchase Money Note or Qualified Receivables Transaction) other
20
than on terms no less favorable to the Company or such other Restricted
Subsidiary of the Company than those that might be obtained at the time from
Persons that are not Affiliates of the Company, other than fees payable in the
ordinary course of business in connection with servicing accounts receivable,
and (c) to which neither the Company nor any other Restricted Subsidiary of the
Company has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve a certain level of operating results.
Any such designation by the Board of Directors of the Company shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the resolution of
the Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying to the best of such officer's knowledge and
belief after consulting with counsel, that such designation complied with the
foregoing conditions.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of November 20, 2003, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a global Note bearing the Global Note
Legend and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes resold in
reliance on Rule 904 of Regulation S.
"Related Party" means (i) any controlling stockholder, partner,
member, 80% (or more) owned Subsidiary, or immediate family member (in the case
of an individual) of any Principal; or (ii) any trust, corporation, partnership
or other entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist of any
one or more Principals and/or such other Persons referred to in the immediately
preceding clause (i).
"Replacement Assets" means (1) non-current tangible assets that will
be used or useful in a Permitted Business or (2) all or substantially all of the
assets of a Permitted Business or a majority of the Voting Stock of any Person
engaged in a Permitted Business that will become on the date of acquisition
thereof a Restricted Subsidiary.
"Representative" means the Trustee, administrative agent, agent or
representative for any Senior Debt.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and
21
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Indenture.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means:
(i) all Indebtedness of the Company or any Guarantor outstanding under
the Credit Agreement and the Senior Unsecured Term Loan Agreement and all
Hedging Obligations with respect thereto whether outstanding on the date
hereof or incurred thereafter;
(ii) any other Indebtedness of the Company or any Guarantor permitted
to be incurred under the terms hereof, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a parity
with or subordinated in right of payment to the Notes or any Note
Guarantee; and
(iii) all Obligations with respect to the items listed in the
preceding clauses (i) and (ii) (including any interest accruing subsequent
to the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law).
Notwithstanding anything to the contrary in the preceding, Senior Debt
will not include:
(i) any liability for federal, state, local or other taxes owed or
owing by the Company;
22
(ii) any Indebtedness of the Company to any of its Subsidiaries or
other Affiliates;
(iii) any trade payables; or
(iv) the portion of any Indebtedness that is incurred in violation of
this Indenture.
In the case of Indebtedness incurred under Section 4.09(i)(b) hereof,
an Officers' Certificate of the Company as to the amount of the Borrowing Base
shall be conclusive absent manifest error for purposes of clause (iv) above.
"Senior Unsecured Term Loan Agreement" means that certain Senior
Unsecured Term Loan Agreement, to be dated as of the date of the Indenture, by
and among the Company, THL Food Products Holding Co., Bank of America, N.A., as
Administrative Agent, Deutsche Bank Securities Inc. and UBS Securities LLC, as
Co-Syndication Agents, and the other Lenders named therein providing for up to
$135.0 million in term loan borrowings including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced,
restated, substituted or refinanced in whole or in part from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the amount of available borrowings
thereunder or adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Standard Securities Undertaking" means representations, warranties,
covenants and indemnities entered into by the Company or any Restricted
Subsidiary of the Company that are reasonably customary in an accounts
receivable transaction.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person: (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
23
combination thereof); and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Surviving Corporation" means the Surviving Corporation (as defined in
the Merger Agreement) upon consummation of the subsequent merger contemplated by
Section 8.06 of the Merger Agreement.
"Technology Agreement" means the Technology Agreement among Papetti's
Hygrade Egg Products, Inc. a New Jersey corporation and Raztek Corporation, a
California corporation dated June 12, 1991 as amended through the date hereof
and as may be amended, modified, replaced or restated from time to time
hereafter.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
(S)(S) 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
"THL Food Products" means THL Food Products Co., a Delaware
corporation.
"Total Net Tangible Assets" means the total consolidated net assets,
less goodwill and intangibles, of the Company and its Restricted Subsidiaries,
as shown on the most recent balance sheet of the Company.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note in the form
of Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary (other than any
Subsidiary in the Egg Products Division) of the Company that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary:
(i) has no Indebtedness other than Non-Recourse Debt;
(ii) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company;
24
(iii) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
(iv) is a guarantor or otherwise directly or indirectly provides
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries at the time of such designation unless such guarantee or
credit support is released upon such designation; and
(v) has at least one director on its Board of Directors that is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director
or executive officer of the Company or any of its Restricted Subsidiaries.
Any designation of a Restricted Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes hereof and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
and, if such Indebtedness is not permitted to be incurred as of such date under
Section 4.09, the Company shall be in default hereunder.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (ii) the then outstanding principal
amount of such Indebtedness.
SECTION 1.02. Other Definitions.
Defined in
Term Section
- ---- ----------
"Affiliate Transaction"............................................ 4.11
"Asset Sale Offer"................................................. 4.10
"Authentication Order"............................................. 2.02
"Change of Control Offer".......................................... 4.14
"Change of Control Payment"........................................ 4.14
25
"Change of Control Payment Date"................................... 4.14
"Covenant Defeasance".............................................. 8.03
"DTC".............................................................. 2.03
"Event of Default"................................................. 6.01
"Excess Proceeds" ................................................. 4.10
"incur"............................................................ 4.09
"Legal Defeasance"................................................. 8.02
"Note Guarantee"................................................... 11.01
"Offer Amount"..................................................... 3.09
"Offer Period"..................................................... 3.09
"Paying Agent"..................................................... 2.03
"Payment Blockage Notice".......................................... 10.03
"Payment Blockage Period".......................................... 10.03
"Permitted Debt"................................................... 4.09
"Purchase Date".................................................... 3.09
"Registrar"........................................................ 2.03
"Repurchase Offer"................................................. 3.09
"Restricted Payments".............................................. 4.07
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
a term has the meaning assigned to it;
an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
"or" is not exclusive;
26
words in the singular include the plural, and in the plural include
the singular;
provisions apply to successive events and transactions; and
references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating. (a) General. The Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A hereto. The Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream shall be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearstream.
SECTION 2.02. Execution and Authentication. One Officer shall sign the
Notes for the Company by manual or facsimile signature.
27
If the Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated in accordance with the terms of this Indenture.
The Trustee shall, upon a written order of the Company signed by one
Officer (an "Authentication Order"), authenticate Notes for original issue with
an unlimited principal amount, of which $150 million will be issued as Initial
Notes on the date hereof. Such Authentication Order shall specify the amount of
the Notes to be authenticated and the date on which the original issue of Notes
is to be authenticated.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar shall keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall promptly notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
SECTION 2.04. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Restricted Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
28
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
SECTION 2.05. Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA (S)
312(a). If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company shall otherwise comply with TIA (S)
312(a).
SECTION 2.06. Transfer and Exchange. (a) Transfer and Exchange of
Global Notes. A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes shall be exchanged by the Company for Definitive
Notes if (i) the Company delivers to the Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and delivers a written notice to such effect to
the Trustee or (iii) there shall have occurred and be continuing a Default or
Event of Default with respect to the Notes. Upon the occurrence of any of the
preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued
in such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.07
and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
29
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described
in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in the
Global Note in an amount equal to the beneficial interest to be transferred
or exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon consummation of an Exchange Offer by the
Company in accordance with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by
the Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee shall take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee shall take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in
30
the form of a beneficial interest in an Unrestricted Global Note if the
exchange or transfer complies with the requirements of Section 2.06(b)(ii)
above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
31
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive
Notes. If any holder of a beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Restricted Definitive Note, then, upon receipt by the Registrar
of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
32
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the holder
of such beneficial interest, in the case of an exchange, or the transferee,
in the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a Definitive Note that
does not bear the Private Placement Legend, a certificate from such
holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for a
Definitive Note or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon satisfaction of
the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h)
33
hereof, and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.
The Trustee shall deliver such Definitive Notes to the Persons in whose names
such Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests. (i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt by
the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant
to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such Restricted Definitive Note is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
34
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the Regulation S Global Note,
and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange
such Notes for a beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of
a beneficial interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
35
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee shall cancel
the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Transfer of Restricted Definitive Notes to Restricted Definitive
Notes.Any Restricted Definitive Note may be transferred to and registered
in the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer shall be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer shall be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer shall be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
36
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof,
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
Broker-Dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of
37
the Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend. (A) Except as permitted by subparagraph
(B) below, each Global Note and each Definitive Note (and all Notes issued
in exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE AND ANY GUARANTEES OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY GUARANTEES OF THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS
NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF
THIS NOTE AND ANY GUARANTEES OF THIS NOTE) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION
COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION
DATE TO REQUIRE THE
38
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who shall take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges. (i) To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall
39
authenticate Global Notes and Definitive Notes upon the Company's order or at
the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.06, 3.09, 4.10, 4.14 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid and legally binding obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on the day of selection,
(B) to register the transfer of or to exchange any Note so selected for
redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part or (C) to register the transfer of or to exchange a Note
between a record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Notes and for
all other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by facsimile with
the original to follow by first class mail.
SECTION 2.07. Replacement Notes. If any mutilated Note is surrendered
to the Trustee or the Company and the Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Note, the Company shall
issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the
40
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note issued pursuant to this Section 2.07 is an
additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder.
SECTION 2.08. Outstanding Notes. The Notes outstanding at any time are
all the Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note; however, Notes held by the
Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be so disregarded.
SECTION 2.10. Temporary Notes. Until certificates representing Notes
are ready for delivery, the Company may prepare and the Trustee, upon receipt of
an Authentication Order, shall authenticate temporary Notes. Temporary Notes
shall be substantially in the form of certificated Notes but may have variations
that the Company considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Notes in exchange
for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
41
SECTION 2.11. Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and Paying Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer, exchange
or payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall dispose of such canceled Notes in its customary manner. Subject to Section
2.07, the Company may not issue new Notes to replace Notes that it has paid or
that have been delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, it shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest,
to the Persons who are Holders on a subsequent special record date, in each case
at the rate provided in the Notes and in Section 4.01 hereof. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment. The Company shall fix or
cause to be fixed each such special record date and payment date, provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the "CUSIP" numbers.
SECTION 2.14. Issuance of Additional Notes. The Company may, subject
to Article 4 of this Indenture and applicable law, issue Additional Notes. The
Notes issued on the Issue Date and any Additional Notes subsequently issued
shall be treated as a single class for all purposes under this Indenture.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it
shall furnish to the Trustee, at least 35 days but not more than 60 days before
a redemption date (unless a shorter notice period shall be satisfactory to the
Trustee in its reasonable discretion), an Officers' Certificate setting forth
(i) the clause of this Indenture pursuant to which the redemption shall occur,
(ii) the redemption date, (iii) the principal amount of Notes to be redeemed and
(iv) the redemption price.
42
SECTION 3.02. Selection of Notes to Be Redeemed. If less than all of
the Notes are to be redeemed at any time, selection of Notes for redemption
shall be made by the Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed,
or, if the Notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 35 nor more than 60 days prior to the
redemption date by the Trustee (unless a shorter time period shall be
satisfactory to the Trustee) from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. Notice of Redemption. Subject to the provisions of
Section 3.09 hereof, at least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address, except that redemption notices may be mailed more than
60 days prior to a redemption date if the notice is issued in connection with a
defeasance of the Notes in accordance with Article 8 hereof or a satisfaction
and discharge of the Indenture in accordance with Article 12 hereof.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price and become due on the date fixed for
redemption;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
43
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph. The notice, if mailed in the manner provided herein
shall be presumed to have been given, whether or not the Holder receives such
notice.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
SECTION 3.05. Deposit of Redemption Price. One Business Day prior to
the redemption date, the Company shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date. The Trustee or the Paying
Agent shall promptly return to the Company any money deposited with the Trustee
or the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall issue and, upon the Company's written
request, the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 3.07. Optional Redemption. (a) Except as set forth in clauses
(b) and (c) of this Section 3.07, the Notes shall not be redeemable at the
Company's option prior to November 15, 2008. Thereafter, the Company may redeem
all or a part of the Notes from time to time, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, to the applicable redemption date, if redeemed
during the twelve-month period beginning on November 15 of the years indicated
below:
44
Year Percentage
- ---- ----------
2008.............................................................. 104.000%
2009.............................................................. 102.667%
2010.............................................................. 101.334%
2011 and thereafter............................................... 100.000%
(b) At any time prior to November 15, 2006, the Company may on any one
or more occasions redeem up to 40% of the initial aggregate principal amount of
the Notes at a redemption price of 108.00% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to the redemption
date, with the net cash proceeds of one or more Equity Offerings of the Company
(or of the Parent to the extent such proceeds are contributed to the common
equity of the Company); provided that (A) at least 60% of the aggregate
principal amount of the Initial Notes issued remains outstanding immediately
after the occurrence of such redemption, excluding Notes held by the Company and
its Subsidiaries; and (B) the redemption must occur within 90 days of the date
of the closing of such Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. Mandatory Redemption. Except as set forth in Section
4.10 and 4.14 hereof, the Company is not required to make mandatory redemption
or sinking fund payments with respect to the Notes.
SECTION 3.09. Offer to Purchase. In the event that, pursuant to
Section 4.10 or 4.14 hereof, the Company shall be required to commence an offer
to all Holders to purchase Notes (a "Repurchase Offer"), it shall follow the
procedures specified below.
The Repurchase Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date") the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 or 4.14 hereof (the "Offer Amount") or, if
less than the Offer Amount has been tendered, all Notes tendered in response to
the Repurchase Offer. Payment for any Notes so purchased shall be made in the
same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:
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(a) that the Repurchase Offer is being made pursuant to this Section
3.09 and Sections 4.10 or 4.14 hereof and the length of time the Repurchase
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Repurchase Offer shall cease to
accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to a
Repurchase Offer may only elect to have all of such Note purchased or a
portion of such Note in denominations of $1,000 or integral multiples
thereof;
(f) that Holders electing to have a Note purchased pursuant to any
Repurchase Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, the
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by
46
such Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Note, and the Trustee, upon written request from the
Company shall authenticate and mail or deliver such new Note to such Holder, in
a principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the
Repurchase Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof, except that a Change of Control Offer may be
conditional under the circumstances set forth in Section 4.14(c) hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay or cause to be
paid the principal of, premium, if any, and interest on the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if a
Person other than the Company or a Subsidiary thereof, holds as of 12:00 p.m.
(noon) Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or
47
agency in the Borough of Manhattan, The City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 4.03. Reports. (a) Whether or not required by the SEC, so long
as any Notes are outstanding (unless defeased in a legal defeasance), the
Company will furnish to the Trustee on behalf of the Holders of Notes, within
the time periods specified in the SEC's rules and regulations (including any
extensions permitted thereunder), (i) all quarterly and annual financial
information that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on the
annual financial statements by the Company's certified independent accountants;
and (ii) all current reports that would be required to be filed with the SEC on
Form 8-K if the Company were required to file such reports. In addition,
following the date by which the Company is required to consummate the Exchange
Offer, whether or not required by the SEC, the Company will file a copy of all
of the information and reports referred to in clauses (i) and (ii) above with
the SEC for public availability within the time periods specified in the SEC's
rules and regulations (unless the SEC will not accept such a filing) and make
such information available to securities analysts and prospective investors upon
request. In addition, the Company and the Guarantors have agreed that, for so
long as any Notes (but not the Exchange Notes) remain outstanding, they will
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act if not obtainable from the SEC.
(b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries (other than Subsidiaries that individually or as a
group constitute an Immaterial Subsidiary), then the quarterly and annual
financial information required by paragraph (a) above shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," of the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Company.
SECTION 4.04. Compliance Certificate. (a) The Company and each
Guarantor (to the extent that such Guarantor is so required under the TIA) shall
deliver to the Trustee, within 120 days after the end of each fiscal year, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have
48
knowledge and what action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of
or interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith, but in no event later than three Business
Days, upon any Officer becoming aware of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.05. Taxes. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.06. Stay, Extension and Usury Laws. The Company and each of
the Guarantors covenant (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company and each of the Guarantors (to
the extent that it may lawfully do so) hereby expressly waive all benefit or
advantage of any such law, and covenant that it shall not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 4.07. Restricted Payments. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or any
of its Restricted Subsidiaries), other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company
or to the Company or a Restricted Subsidiary of the Company;
49
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company or
the Parent;
(3) make any payment of principal or premium on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value, any
Indebtedness that is subordinated to the Notes or the Note Guarantees,
except a payment of principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09; and
(iii) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date hereof (excluding Restricted Payments permitted
by clauses (ii), (iii), (vi), (vii), (viii), (x) and (xi) of the next
succeeding paragraph), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) beginning on the date hereof
and ending on the date of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net proceeds (including the fair market
value of property) received by the Company subsequent to the date
hereof as a contribution to its common equity capital or from the
issue or sale of Equity Interests of the Company (other than Excluded
Contributions or net proceeds from the issue and sale of Disqualified
Stock) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of
the Company that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Restricted Subsidiary of the Company); plus
(C) an amount equal to the net reduction in Investments by the
Company and its Restricted Subsidiaries, subsequent to the date
hereof, resulting
50
from payments of interest on Indebtedness, dividends, repayments of
loans or advances or other transfers of assets, in each case to the
Company or any such Restricted Subsidiary from any such Investment, or
from the net cash proceeds from the sale of any such Investment, or
from a redesignation of an Unrestricted Subsidiary to a Restricted
Subsidiary, but only if and to the extent such amounts are not
included in the calculation of Consolidated Net Income and not to
exceed in the case of any Investment the amount of the Investment
previously made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary; provided, that any amounts in
excess of the amount of the Investment may be added to the amounts
otherwise available under this clause (C) to make Restricted
Investments pursuant to this clause (C).
The preceding provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of the Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any
Restricted Subsidiary or of any Equity Interests of the Company or any
Parent in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary
of the Company) of, Equity Interests of the Company other than
Disqualified Stock; provided that the amount of any such net proceeds
that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (iii)(B)
of the preceding paragraph;
(iii) the repayment, defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or any
Restricted Subsidiary with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness;
(iv) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of any series or class of its common Equity
Interests on a pro rata basis;
(v) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company and any distribution,
loan or advance to the Parent for the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests, of the
Parent, in each case held by any former or current employees,
officers, directors or consultants of the Company or any of its
Restricted Subsidiaries or their respective estates, spouses, former
spouses or family members under any management equity plan or stock
option or other management or employee benefit plan upon the death,
disability or termination of employment of such Persons, in an amount
not to exceed $3.0 million in any calendar year; provided that the
Company may carry over and make in subsequent calendar years, in
addition to the amounts permitted for such calendar year, the amount
of such purchases, redemptions or other acquisitions or retirements
for value permitted to have been made but not made in any preceding
calendar year up to a maximum of $9.0 million in any calendar year;
and provided further
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that such amount in any calendar year may be increased by an amount
not to exceed (x) the net cash proceeds from the sale of Equity
Interests (other than Disqualified Stock) of the Company (or the
Parent to the extent such net cash proceeds are contributed to the
common equity of the Company) to employees, officers, directors or
consultants of the Company and its Restricted Subsidiaries that occurs
after the date hereof (to the extent the cash proceeds from the sale
of such Equity Interests have not otherwise been applied to the
payment of Restricted Payments pursuant to clause (ii) above or
previously applied to the payment of Restricted Payments pursuant to
this clause (v)) plus (y) the cash proceeds of key man life insurance
policies received by the Company and its Restricted Subsidiaries after
the date hereof less any amounts previously applied to the payment of
Restricted Payments pursuant to this clause (v); provided further that
cancellation of Indebtedness owing to the Company from employees,
officers, directors and consultants of the Company or any of its
Restricted Subsidiaries in connection with a repurchase of Equity
Interests of the Company from such Persons will not be deemed to
constitute a Restricted Payment for purposes of this covenant or any
other provisions of the Indenture; provided further that the net cash
proceeds from such sales of Equity Interests described in clause (x)
of this clause (v) shall be excluded from clause (iii)(B) of the
preceding paragraph to the extent such proceeds have been or are
applied to the payment of Restricted Payments pursuant to this clause
(v);
(vi) the payment of dividends or other distributions or the
making of loans or advances to the Parent in amounts required for the
Parent to pay franchise taxes and other fees required to maintain its
existence and provide for all other operating costs of the Parent to
the extent attributable to the ownership or operation of the Company
and its Restricted Subsidiaries, including, without limitation, in
respect of director fees and expenses, administrative, legal and
accounting services provided by third parties and other costs and
expenses including all costs and expenses with respect to filings with
the SEC, of up to an aggregate under this clause (vi) of $500,000 per
fiscal year plus any indemnification claims made by directors or
officers of the Parent attributable to the ownership or operation of
the Company and its Restricted Subsidiaries;
(vii) the payment of dividends or other distributions by the
Company to the Parent in amounts required to pay the tax obligations
of the Parent attributable to the Company and its Subsidiaries
determined as if the Company and its Subsidiaries had filed a separate
consolidated, combined or unitary return for the relevant taxing
jurisdiction; provided that any refunds received by the Parent
attributable to the Company or any of its Subsidiaries shall promptly
be returned by the Parent to the Company through a contribution to the
common equity of, or the purchase of common stock (other than
Disqualified Stock) of the Company from, the Company; and provided
further that the amount of any such contribution or purchase shall be
excluded from clause (3)(b) of the preceding paragraph;
(viii) repurchases of Capital Stock deemed to occur upon the
cashless exercise of stock options and warrants;
(ix) other Restricted Payments not otherwise permitted by this
Section 4.07 in an aggregate amount not to exceed $30.0 million;
52
(x) Restricted Payments to holders of equity interests of M-Foods
Holdings Inc. contemplated by the Merger Agreement, including in
connection with any post-closing purchase price adjustments pursuant
to the Merger Agreement;
(xi) the declaration and payment of dividends and distributions
to holders of any class or series of Disqualified Stock of the Company
or any of its Restricted Subsidiaries issued or incurred in accordance
with Section 4.09;
(xii) Investments that are made with Excluded Contributions;
(xiii) following the first Public Equity Offering of the Company
or the Parent of the Company after the date of the Indenture, the
payment of dividends on the Company's common stock (and, in the case
of a Public Equity Offering of the Parent, solely for the purpose of
paying dividends on the Parent of the Company's common stock) in an
amount not to exceed 6% per annum of the gross proceeds of such Public
Equity Offering received by, and in the case of a Public Equity
Offering of the Parent of the Company contributed to the common equity
capital of, the Company (other than any such gross proceeds
constituting Excluded Contributions);
(xiv) upon the occurrence of a Change of Control and within 60
days after completion of the offer to repurchase Notes pursuant to
Section 4.14 hereof (including the purchase of all Notes tendered),
any purchase or redemption of Indebtedness of the Company subordinated
to the Notes that is required to be repurchased or redeemed pursuant
to the terms thereof as a result of such Change of Control, at a
purchase price not greater than 101% of the outstanding principal
amount thereof (plus accrued and unpaid interest);
(xv) dividends paid after September 30, 2004 in an amount equal
to any reduction in taxes actually realized by the Company and its
Restricted Subsidiaries in the form of cash refunds or from deductions
when applied to offset income or gain as a direct result of (I) the
tender costs, including the costs of any premium paid or interest
expense, incurred in connection with repurchasing the 11 3/4% Senior
Subordinated Notes due 2011 of Michael Foods, Inc., prior to the
Mergers, (II) swap termination costs incurred in connection with
terminating interest rate swap arrangements in respect to Indebtedness
being refinanced as contemplated in the Offering Memorandum, (III)
compensation expense incurred in connection with the repurchase or
rollover of stock options or transaction bonuses, or (IV) the write
off of deferred financing charges as a result of the refinancing
contemplated in the Offering Memorandum, in the case of each of
clauses (I) through (IV) in connection with the Mergers; provided,
that the aggregate amount of dividends pursuant to this clause (xv)
shall not exceed $30.0 million;
provided, however, that in the case of clauses (ii), (iii), (iv), (v), (vi),
(ix), (xi), (xiii), (xiv) and (xv) above, no Default or Event of Default has
occurred and is continuing.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to
53
the Restricted Payment. The fair market value of any assets or securities that
are required to be valued for the purposes hereof shall, if the fair market
value thereof exceeds $2.0 million, be determined by the Board of Directors
whose resolution with respect thereto shall be delivered to the Trustee. The
Board of Directors' determination must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the fair market value exceeds $15.0 million. Not later than the date
of making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.
SECTION 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its Capital Stock
to the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay
any indebtedness owed to the Company or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(i) Existing Indebtedness, the Credit Agreement and the Senior
Unsecured Term Loan Agreement as in effect on the date hereof and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof; provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive, taken as
a whole, with respect to such encumbrances than those contained in such
Existing Indebtedness, the Credit Agreement and the Senior Unsecured Term
Loan Agreement, as in effect on the date hereof;
(ii) this Indenture, the Notes and the Note Guarantees or by other
Indebtedness of the Company which is pari passu in right of payment with
the Notes or Note Guarantees, as applicable, incurred under an indenture
pursuant to Section 4.09 hereof; provided that the encumbrances and
restrictions are no more restrictive, taken as a whole, other than those
contained herein;
(iii) applicable law or regulation;
54
(iv) any agreements or instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the
extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so acquired;
provided that, in the case of Indebtedness, such Indebtedness was permitted
by the terms of this Indenture to be incurred;
(v) customary non-assignment provisions in leases entered into in the
ordinary course of business;
(vi) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so acquired of
the nature described in clause (iii) of the preceding paragraph;
(vii) an agreement entered into for the sale or disposition of Capital
Stock or assets of a Restricted Subsidiary or an agreement entered into for
the sale of specified assets (in either case, so long as such encumbrance
or restriction, by its terms, terminates on the earlier of the termination
of such agreement or the consummation of such agreement and so long as such
restriction applies only to the Capital Stock or assets to be sold);
(viii) Permitted Refinancing Indebtedness, provided that the
encumbrances and restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness
being refinanced;
(ix) Permitted Liens securing Indebtedness that limit the right of the
debtor to dispose of the assets subject to such Lien;
(x) customary limitations on the disposition or distribution of assets
or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business;
(xi) any Purchase Money Note, or other Indebtedness or contractual
requirements of a Receivables Subsidiary in connection with a Qualified
Securitization Transaction; provided that such restrictions only apply only
to such Receivables Subsidiary; and
(xii) cash or other deposits or net worth imposed by customers or
agreements entered into in the ordinary course of business.
SECTION 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock. The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and the
55
Company will not permit any of its Restricted Subsidiaries to issue any
Disqualified Stock or preferred stock; provided, however, that the Company and
the Guarantors may incur Indebtedness (including Acquired Debt) or issue
Disqualified Stock and the Guarantors may issue preferred stock, if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or preferred stock is issued would have been at least 2.00 to
1, determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or
Disqualified Stock or preferred stock had been issued, as the case may be, at
the beginning of such four-quarter period.
The first paragraph of this Section 4.09 will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company or any Guarantor of Indebtedness
under the Credit Facilities (and the incurrence by the Guarantors of
guarantees thereof) in an aggregate principal amount at any one time
outstanding (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and the Guarantors
thereunder) not to exceed $730.0 million and (b) the incurrence by the
Company or any Guarantor of additional Indebtedness under Credit Facilities
(and the incurrence by the Guarantors of guarantees thereof) in an
aggregate principal amount at any one time outstanding (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and the Guarantors thereunder) not to
exceed the amount, if any, by which (x) the amount of the Borrowing Base as
of the date of such incurrence exceeds (y) the aggregate amount of
Indebtedness permitted to be incurred pursuant to the immediately preceding
clause (a) as of the date of such incurrence, less, in the case of each of
clause (a) and (b) the aggregate amount of all Net Proceeds of Asset Sales
applied by the Company or any Guarantor to repay any Indebtedness under
Credit Facilities (and, in the case of any revolving credit Indebtedness
under a Credit Facility, to effect a corresponding commitment reduction
thereunder) pursuant to Section 4.10;
(ii) the incurrence by the Company or any Guarantor of the Existing
Indebtedness;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness represented by the Notes to be issued on the Issue Date and
the related Note Guarantees and the Exchange Notes and the related Note
Guarantees to be issued pursuant to the Registration Rights Agreement;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price, or cost
of construction or improvement, of property (real or personal), plant or
equipment used in the business of the Company or any of its Restricted
Subsidiaries (whether through the direct acquisition of such assets or the
acquisition of Equity Interests of any Person owning such assets) in an
aggregate principal amount,
56
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(iv), not to exceed, at any time outstanding, the greater of (x) $20.0
million and (y) 5% of Total Tangible Assets;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
(other than intercompany Indebtedness) that was permitted to be incurred
under the first paragraph of this Section 4.09 or clauses (ii), (iii),
(iv), (v), or (xv), of this Section 4.09;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Notes, in the case of the Company, or the Note Guarantee, in the case
of a Guarantor; and
(b) (1) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other
than the Company or a Restricted Subsidiary thereof and (2) any sale
or other transfer of any such Indebtedness to a Person that is not
either the Company or a Restricted Subsidiary thereof; shall be
deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be, that
was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the ordinary
course of business for the purpose of fixing, hedging or swapping interest
rate, commodity price or foreign currency exchange rate risk (or to reverse
or amend any such agreements previously made for such purposes), and not
for speculative purposes, and that do not increase the Indebtedness of the
obligor outstanding at any time other than as a result of fluctuations in
interest rates, commodity prices or foreign currency exchange rates or by
reason of fees, indemnities and compensation payable thereunder;
(viii) the guarantee by the Company or any Restricted Subsidiary of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by this Section 4.09; provided that, in the
case of a guarantee of any Restricted Subsidiary that is not a Guarantor,
such Restricted Subsidiary complies with Section 4.17 hereof;
(ix) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the
form of additional Indebtedness with the same terms, and the payment of
dividends on Disqualified Stock or preferred stock in the form of
additional shares of the same class of Disqualified Stock or preferred
stock will not be deemed to be an incurrence of Indebtedness or an issuance
of
57
Disqualified Stock or preferred stock for purposes of this Section 4.09;
provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued;
(x) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company that was not permitted by this clause (x);
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including, without limitation, letters of credit in respect of workers'
compensation claims or self-insurance, or other Indebtedness with respect
to reimbursement type obligations regarding workers' compensation claims or
self-insurance; provided, however, that, upon the drawing of such letters
of credit or the incurrence of such Indebtedness, such obligations are
reimbursed within 30 days following such drawing or incurrence;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from agreements of the Company or such
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or Capital Stock of
the Company or a Restricted Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such
acquisition; provided that:
(a) that Indebtedness is not reflected on the balance sheet of
the Company or any Restricted Subsidiary (contingent obligations
referred to in a footnote or footnotes to financial statements and not
otherwise reflected on the balance sheet will not be deemed to be
reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that
Indebtedness shall at no time exceed the gross proceeds including
non-cash proceeds (the fair market value of those non-cash proceeds
being measured at the time received and without giving effect to any
subsequent changes in value) actually received by the Company and/or
that Restricted Subsidiary in connection with that disposition;
(xiii) the issuance of Disqualified Stock or preferred stock by any of
the Company's Restricted Subsidiaries issued to the Company or another
Restricted Subsidiary; provided that (i) any subsequent issuance or
transfer of any Equity Securities that results in such Restricted
Subsidiary, such Disqualified Stock or preferred stock being held by a
person other than the Company or a Restricted Subsidiary thereof and (ii)
any sale or other transfer of any such shares of Disqualified Stock or
preferred stock to a Person that is not either the Company or another
Restricted Subsidiary thereof shall be
58
deemed, in each case, to constitute an issuance of such shares of
Disqualified Stock or preferred stock that was not permitted by this clause
(xiii);
(xiv) the incurrence by the Company or any of its Restricted
Subsidiaries of obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or such Restricted Subsidiary
in the ordinary course of business;
(xv) the incurrence by the Company or any Guarantor of Indebtedness in
an aggregate principal amount (or accreted value, as applicable) at any
time outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (xv), not to exceed $30 million;
(xvi) the incurrence by the Foreign Restricted Subsidiaries of the
Company of Indebtedness in an aggregate principal amount at any one time
outstanding (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Restricted Subsidiaries
under any credit facility entered into in connection therewith) not to
exceed the greater of (x) $20 million or (y) the amount of the Foreign
Borrowing Base as of the date of such incurrence;
(xvii) the incurrence of any Indebtedness by a Receivables Subsidiary
that is not recourse to the Company or any other Restricted Subsidiary of
the Company (other than Standard Securitization Undertakings) incurred in
connection with a Qualified Receivables Transaction; and
(xviii) contingent liabilities arising out of endorsements of checks
and other negotiable instruments for deposit or collection in the ordinary
course of business.
For purposes of determining compliance with this Section 4.09, in the
event that any proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xviii) above, or
is entitled to be incurred pursuant to the first paragraph of this Section 4.09,
the Company will be permitted to classify such item of Indebtedness on the date
of its incurrence, and from time to time may reclassify, in any manner that
complies with this Section 4.09 at such time. Indebtedness under the Credit
Agreement and Senior Unsecured Term Loan Agreement on the date hereof shall be
deemed to have been incurred on the date hereof in reliance on the exception
provided by clause (i) of the definition of Permitted Debt.
SECTION 4.10. Asset Sales. The Company will not, and will not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of;
(ii) such fair market value is determined by the Company's Board of Directors
and evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and (iii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of Cash, Cash Equivalents or Replacement Assets or a
59
combination thereof. For purposes of this provision, each of the following shall
be deemed to be cash:
(a) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by
their terms subordinated to the Notes or any Note Guarantee) that are
assumed by the transferee of any such assets and, in the case of
liabilities other than Non-Recourse Debt, where the Company and all
Restricted Subsidiaries are released from any further liability in
connection therewith; and
(b) any securities, notes or other obligations received by the Company
or any such Restricted Subsidiary from such transferee that are within 180
days of receipt thereof converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received in that
conversion).
For purposes of clause (iii) above, any liabilities of the Company or
any Restricted Subsidiary that are not assumed by the transferee of such assets
in respect of which the Company and all Restricted Subsidiaries are not released
from any future liabilities in connection therewith shall not be considered
consideration.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Permitted Business;
(3) to acquire other assets, including investments in property, or to
make capital expenditures, that, in either case, are used or useful in a
Permitted Business; or
(4) any combination of the foregoing.
Pending the final application of any such Net Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited hereunder.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will make
an Asset Sale Offer to all Holders of Notes and Additional Notes, if any, and
all holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth herein with respect to offers to purchase
with the proceeds of sales of assets to purchase the maximum principal amount of
Notes and Additional Notes, if any, and such other pari passu Indebtedness that
maybe purchased out of the Excess Proceeds. The offer price in any Asset Sale
Offer will be equal to 100% of principal amount plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase, and will be payable in
cash. If any Excess Proceeds remain after
60
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and such other pari passu Indebtedness tendered into
such Asset Sale Offer exceeds the amount of Excess Proceeds, the Notes and such
other pari passu Indebtedness to be purchased shall be purchased on a pro rata
basis based on the principal amount of Notes and Additional Notes and such other
pari passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
SECTION 4.11. Transactions with Affiliates. The Company will not, and
will not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate on or after the date hereof (each, an
"Affiliate Transaction"), unless: (i) such Affiliate Transaction is on terms
that are no less favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person; and (ii) the
Company delivers to the Trustee: (a) with respect to any Affiliate Transaction
or series of related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
this Section 4.11 and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors; and (b) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $15.0 million, an opinion as to
the fairness to the Company or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing. No outside director or
non-management director shall be deemed not to be a "disinterested director" by
reason of his receipt of reasonable and customary directors' fees or the
participation in reasonable and customary directors' stock grant, stock option
or stock warrant plans, or such other form of director remuneration as is
reasonable and customary.
The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:
(1) any consulting or employment agreement or arrangement entered into
by the Company or any of its Restricted Subsidiaries approved by a majority
of the disinterested members of the Board of Directors of the Company;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
61
(3) payment of reasonable directors fees to directors of the Company
and the Parent and the provision of customary indemnification to directors
and officers of the Company and the Parent;
(4) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company;
(5) any tax sharing agreement or arrangement and payments pursuant
thereto among the Company and its Subsidiaries and any other Person with
which the Company or its Subsidiaries is required or permitted to file a
consolidated, combined or unitary tax return or with which the Company or
any of its Restricted Subsidiaries is or could be part of a consolidated,
combined or unitary group for tax purposes in amounts not otherwise
prohibited by this Indenture;
(6) Restricted Payments that are permitted by the provisions of
Section 4.07 or any Permitted Investment;
(7) the payment (directly or through the Parent) of annual management,
consulting, monitoring and advising fees and related expenses to the Equity
Sponsor and its Affiliates pursuant to a management agreement entered into
in connection with the Mergers pursuant to the Merger Agreement and as
described under the caption "Certain Relationships and Related Transactions
- Management Agreement" in the Offering Memorandum;
(8) payments by the Company or any of its Restricted Subsidiaries to
the Equity Sponsor and its Affiliates for any financial advisory,
financing, underwriting or placement services or in respect of other
investment banking activities, including, without limitation, in connection
with acquisitions or divestitures, which payments are approved by the
majority of the Board of Directors of the Company in good faith and are in
an amount not to exceed the greater of (i) $1.0 million or (ii) 1.25% of
the aggregate transaction value (including enterprise value in connection
with acquisitions or divestitures) (or portion thereof) in respect of which
such services are rendered;
(9) loans to employees of the Company that are approved in good faith
by a majority of the Board of Directors of the Company in an amount not to
exceed $3.0 million outstanding at any time and advances and expense
reimbursements to employees in the ordinary course of business;
(10) agreements (and payments relating thereto) pursuant to the Merger
Agreement and as otherwise described in the Offering Memorandum, as the
same may be amended, modified or replaced from time to time, so long as any
amendment, modification or replacement is not materially less favorable to
the Company and its Restricted Subsidiaries than the agreements described
in the Offering Memorandum and in effect on the date hereof,
(11) transactions with a joint venture engaged in a Permitted
Business; provided that all the outstanding ownership interests of such
joint venture are owned only
62
by the Company, its Restricted Subsidiaries and Persons who are not
Affiliates of the Company; and
(12) transactions between a Receivables Subsidiary and any Person in
which the Receivables Subsidiary has an Investment.
SECTION 4.12. Liens. The Company will not, and will not permit any of
its Restricted Subsidiaries to, create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind securing Indebtedness
(other than Permitted Liens) upon any of their property or assets, now owned or
hereafter acquired, unless all payments due under this Indenture and the Notes
are secured on an equal and ratable basis with the obligations so secured (or,
in the case of subordinated Indebtedness, prior or senior thereto, with the same
relative priority as the Notes shall have with respect to such subordinated
Indebtedness) until such time as such obligations are no longer secured by a
Lien.
SECTION 4.13. Corporate Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
SECTION 4.14. Offer to Repurchase upon Change of Control. (a) Upon the
occurrence of a Change of Control, each Holder of Notes shall have the right to
require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and stating (1) that the
Change of Control Offer is being made pursuant to this Section 4.14 and that all
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"); (3)
that any Note not tendered will continue to accrue interest; (4) that, unless
the Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the
63
close of business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Notes delivered for purchase,
and a statement that such Holder is withdrawing his election to have the Notes
purchased; and (7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Indenture relating to such
Change of Control Offer, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
described in this Indenture by virtue thereof.
(b) By 12:00 p.m. (noon) Eastern Time on the Change of Control Payment
Date, the Company shall, to the extent lawful, (1) accept for payment all Notes
or portions thereof properly tendered pursuant to the Change of Control Offer,
(2) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered, and (3) deliver
or cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to each Holder of Notes so tendered the Change of Control Payment for such
Notes, and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered, if any; provided that each
such new Note shall be in a principal amount of $1,000 or an integral multiple
thereof. Prior to compliance with this Section 4.14, but in any event within 90
days following a Change of Control, the Company will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of Notes
required by this Section 4.14. The Company shall publicly announce the results
of the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.14, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.14 and Section 3.09 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer. A
Change in Control Offer may be made in advance of a Change of Control,
conditional upon such Change of Control, if a definitive agreement is in place
for the Change of Control at the time of making of the Change of Control Offer.
Notes repurchased pursuant to a Change of Control Offer will be retired and
cancelled.
SECTION 4.15. Limitation on Other Senior Subordinated Debt. The
Company shall not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is by its terms contractually subordinate or
junior in right of payment to any Senior Debt of the Company and senior in right
of payment to the Notes. No Guarantor will incur, create, issue,
64
assume, guarantee or otherwise become liable for any Indebtedness that is
contractually subordinate or junior in right of payment to the Senior Debt of
such Guarantor and senior in right of payment to such Guarantor's Note
Guarantee.
SECTION 4.16. [Reserved].
SECTION 4.17. Limitation on Issuances of Guarantees of Indebtedness.
(a) The Company will not permit any of its Restricted Subsidiaries, directly or
indirectly, to Guarantee or pledge any assets to secure the payment of any other
Indebtedness of the Company or any other Restricted Subsidiary (other than a
Guarantee or pledge by a Foreign Restricted Subsidiary securing the payment of
Indebtedness of another Foreign Restricted Subsidiary) unless either (1) such
Restricted Subsidiary is a Guarantor or (2) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture providing for the
Guarantee of the payment of the Notes by such Restricted Subsidiary, which
Guarantee shall be senior to or pari passu with such Subsidiary's Guarantee of
or pledge to secure such other Indebtedness, unless such other Indebtedness is
Senior Debt, in which case the Guarantee of the Notes may be subordinated to the
Guarantee of such Senior Debt to the same extent as the Notes are subordinated
to such Senior Debt.
(b) Notwithstanding clause (a) of this Section 4.17, any Note
Guarantee will provide by its terms that it will be automatically and
unconditionally released and discharged pursuant to Section 11.06.
SECTION 4.18. Additional Guarantees. If the Company or any of its
Restricted Subsidiaries acquires or creates another Domestic Subsidiary (other
than a Receivables Subsidiary) on or after the date hereof, then the newly
acquired or created Domestic Subsidiary (other than an Immaterial Subsidiary)
must become a Guarantor and execute a supplemental indenture in the form of
Exhibit E hereto providing for the Guarantee of the payment of the Notes by such
Domestic Subsidiary on the same basis as the Guarantors on the date hereof and
deliver an Opinion of Counsel to the Trustee within 20 Business Days of the date
on which it was acquired or created.
SECTION 4.19. Business Activities. The Company will not, and will not
permit any Restricted Subsidiary to, engage in any business other than Permitted
Businesses.
SECTION 4.20. Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if that designation would not cause a Default;
provided that in no event shall (i) there be any Unrestricted Subsidiaries on or
immediately following the date hereof and (ii) the business currently operated
by the Egg Products Division be transferred to or held by an Unrestricted
Subsidiary. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary so designated
(after giving effect to any sale of Equity Interests of such Subsidiary in
connection with such designation) will be deemed to be a Restricted Investment
made as of the time of such designation and will either reduce the amount
available for Restricted Payments pursuant to the first paragraph of Section
4.07 or reduce the amount available for future Permitted Investments under one
or more clauses of the definition of
65
"Permitted Investments". That designation will only be permitted if such
Investment would be permitted at that time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that such designation shall be deemed to
be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (1) such Indebtedness is permitted under
Section 4.09 hereof, calculated on a pro forma basis as if such designation had
occurred at the beginning of the four quarter reference period; and (2) no
Default or Event of Default would be in existence following such designation.
ARTICLE 5
SUCCESSORS
SECTION 5.01. Merger Consolidation, or Sale of Assets. The Company
will not, directly or indirectly, consolidate or merge with or into another
Person (whether or not the Company is the surviving corporation), and the
Company will not, and will not cause or permit any Restricted Subsidiary to,
sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company and its Restricted Subsidiaries taken
as a whole, in one or more related transactions, to another Person (including by
way of consolidation or merger), unless:
(1) either: (a) the Company or such Restricted Subsidiary, as the case
may be, is the surviving corporation; or (b) the Person formed by or
surviving any such consolidation or merger (if other than the Company or
such Restricted Subsidiary) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made is a corporation,
partnership or limited liability company organized or existing under the
laws of the United States, any state thereof or the District of Columbia;
provided, that in the case such Person is a limited liability company or a
partnership, a co-obligor of the Notes is a corporation;
(2) the Person formed by or surviving any such consolidation or merger
(if other than the Company or such Restricted Subsidiary) or the Person to
which such sale, assignment, transfer, conveyance or other disposition
shall have been made assumes all the obligations of the Company or such
Restricted Subsidiary (if such Restricted Subsidiary is a Guarantor), as
the case may be, under the Notes, the Indenture and the Registration Rights
Agreement pursuant to agreements reasonably satisfactory to the Trustee;
(3) immediately after such transaction and any related financing
transactions, no Default or Event of Default exists; and
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made,
will, on the date of such transaction after giving pro forma effect thereto
and any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period be
66
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09, or if not, the Fixed Charge Coverage Ratio on such basis is
higher than the Fixed Charge Coverage Ratio immediately prior to such
transactions.
In addition, neither the Company nor any Restricted Subsidiary may,
directly or indirectly, lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person. This Section
5.01 will not apply to (i) a sale, assignment, transfer, conveyance or other
disposition of assets between or among the Company and any of its Restricted
Subsidiaries or (ii) the Mergers on the terms set forth in the Merger Agreement
and as described in the Offering Memorandum.
SECTION 5.02. Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, assignment, transfer, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation,
merger, sale, conveyance or other disposition, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided, however, that the predecessor Company shall not
be relieved from the obligation to pay the principal of and interest on the
Notes except in the case of a sale of all of the Company's assets that meets the
requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. Each of the following is an "Event of
Default":
(a) default in the payment when due of interest on, or Liquidated
Damages with respect to, the Notes (whether or not permitted by Article 10
hereof) and such default continues for a period of 30 days;
(b) default in payment when due of the principal of or premium, if
any, on the Notes (whether or not permitted by Article 10 hereof);
(c) failure by the Company to comply with the provisions of Sections
4.10, 4.14 and 5.01 hereof;
(d) failure by the Company or any of its Restricted Subsidiaries for
45 days after notice from the Trustee or holders of at least 25% in
principal amount of the Notes, including Additional Notes, if any, then
outstanding, to comply with any of its other covenants or agreements in
this Indenture;
67
(e) default by the Company or any Restricted Subsidiary under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the
date hereof, if that default (i) is caused by a failure to make any payment
when due at final maturity any such Indebtedness of (a "Payment Default")
or (ii) results in the acceleration of such Indebtedness prior to its
express maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $15 million or more.
(f) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $15.0 million, which judgments
are not paid, discharged or stayed for a period of 60 days after such
judgments have become final and non appealable and in the event such
judgment is covered by insurance, an enforcement proceeding has been
commenced by any creditor upon such judgment or decree that is not promptly
stayed;
(g) except as permitted by this Indenture, any Note Guarantee of a
Guarantor (other than an Immaterial Guarantor) shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor (other than an
Immaterial Guarantor), or any Person acting on behalf of any Guarantor
(other than an Immaterial Guarantor), shall deny or disaffirm its
obligations under its Note Guarantee;
(h) any Guarantor, the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary pursuant to or within
the meaning of Bankruptcy Law:
(1) commences a voluntary case; or
(2) consents to entry of an order for relief against it in an
involuntary case; or
(3) consents to the appointment of a custodian of it or for all
or substantially all of its property; or
(4) makes a general assignment for the benefit of its creditors;
or
(5) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(1) is for relief against any Guarantor, the Company or any of
its Subsidiaries that is a Significant Subsidiary or any group of
Restricted
68
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary in an involuntary case;
(2) appoints a custodian of any Guarantor, the Company or any of
its Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all of the property
of any Guarantor, the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary; or
(3) orders the liquidation of any Guarantor, the Company or any
of its Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days; or
In the event of a declaration of acceleration of the Notes because an
Event of Default has occurred and is continuing as a result of the acceleration
of any Indebtedness described in clause (e) of the preceding paragraph, the
declaration of acceleration of the Notes shall be automatically annulled if the
holders of any Indebtedness described in clause (e) of the preceding paragraph
have rescinded the declaration of acceleration in respect of such Indebtedness
within 30 days of the date of such declaration and if (i) the annulment of the
acceleration of Notes would not conflict with any judgment or decree of a court
of competent jurisdiction and (ii) all existing Events of Default, except
nonpayment of principal or interest on the Notes that became due solely because
of the acceleration of the Notes have been cured or waived.
SECTION 6.02. Acceleration. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the principal, premium, if any,
accrued interest and Liquidated Damages, if any, of the Notes to be due and
payable by notice in writing to the Company and (if from the Holders) the
Trustee specifying the respective Event of Default and it is a "notice of
acceleration", and upon receipt of such notice the same shall become due and
payable upon the first to occur of an acceleration under any issue of then
outstanding Designated Senior Debt; or (2) five Business Days after receipt by
the Company and each Representative of holders of Designated Senior Debt then
outstanding of such notice of acceleration, unless all Events of Default
specified in their respective notices of acceleration shall have been cured
within said five Business Day period. Notwithstanding the foregoing, in the case
of an Event of Default described in clause (h) or (i) of Section 6.01, with
respect to the Company or any Significant Subsidiary (or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary),
all outstanding Notes will become due and payable immediately without further
action or notice.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
69
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults. Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by notice
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium and Liquidated Damages, if any, or interest on, the Notes (including in
connection with an offer to purchase) (provided, however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes may rescind
an acceleration and its consequences, including any related payment default that
resulted from such acceleration). The Company shall deliver to the Trustee an
Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder and under the Notes, respectively. This
Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture
and the Notes, as permitted by the TIA. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.05. Control by Majority. Subject to Section 2.09, holders of
a majority in principal amount of the then outstanding Notes may direct in
writing the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of Holders of Notes not taking part in such direction, and the
Trustee shall have the right to decline to follow any such direction, if the
Trustee, being advised by counsel, determines that such action so directed may
not be lawfully taken or if the Trustee, in good faith shall by a Responsible
Officer, determine that the proceedings so directed may involve the Trustee in
personal liability; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction. In the
event the Trustee takes any action or follows any direction pursuant to this
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against any loss or expense caused by taking such action
or following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.
SECTION 6.06. Limitation on Suits. A Holder of a Note may pursue a
remedy with respect to this Indenture, the Notes or the Note Guarantees only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
70
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium and Liquidated Damages, if
any, and interest on the Note, on or after the respective due dates expressed in
the Note (including in connection with an offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01 (a) or (b) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, premium and
Liquidated Damages, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other securities or property
payable or deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be
71
secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant
to this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit
by Holders of more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in its exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
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(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations or
other facts purported to be stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money or
assets held in trust by the Trustee need not be segregated from other funds or
assets except to the extent required by law.
SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively rely
upon any document (whether in its original or facsimile form) believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require (other than in connection with the Exchange Offer
contemplated by
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Section 2.06(f) unless required by the TIA) an Officers' Certificate or an
Opinion of Counsel or both. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such Officers' Certificate
or Opinion of Counsel. The Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Trustee shall not be deemed to have knowledge of any Default
or Event of Default except (i) any Event of Default occurring pursuant to
Section 6.01(a) or 6.01(b) or (ii) any Event of Default of which the Trustee
shall have received written notification or otherwise obtained actual knowledge.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to the Holders of the Notes
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a notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest or Liquidated Damages on any Note, the Trustee may
withhold the notice if and so long as the board of directors, the executive
committee or a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. Reports by Trustee to the Holders of the Notes. Within
60 days after each September 1 beginning with the September 1 following the date
of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA (S) 313(a) (but if no event described in TIA (S)
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of the
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA (S) 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any
securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel and
any taxes or other expenses incurred by a trust created pursuant to Section 8.04
hereof.
The Company shall indemnify the Trustee and its agents against any and
all losses, liabilities, claims, damages or expenses (including compensation,
fees, disbursements and expenses of Trustee's agents and counsel) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense is judicially determined to have been caused by to its own negligence or
bad faith. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
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To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture. The Trustee's right to receive payment of any
amounts due under this Section 7.07 shall not be subordinated to any other
liability or Indebtedness of the Company.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to
the extent applicable.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition at the expense of the Company any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification. There shall at all times
be a Trustee hereunder that is a corporation organized and doing business under
the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 310(b)(1) any indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee is subject to TIA (S)311(a), excluding any creditor relationship listed
in TIA (S)311(b). A Trustee who has resigned or been removed shall be subject to
TIA (S)311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or Section 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8
SECTION 8.02. Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.02 hereof of the option applicable to this Section
8.02, the Company shall, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be deemed to have been discharged from its obligations
with respect to all outstanding Notes and all obligations of
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the Guarantors shall be deemed to have been discharged with respect to their
obligations under the Subsidiary Guarantees on the date the conditions set forth
below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company and the Guarantors shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding Notes
and Subsidiary Guarantees, respectively, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, interest and Liquidated Damages,
if any, on such Notes when such payments are due, (b) the Company's and the
Guarantor's obligations with respect to such Notes under Article 2 and Section
4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith and (d)
this Article 8. Subject to compliance with this Article 8, the Company may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
SECTION 8.03. Covenant Defeasance. Upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Company
and each of the Guarantors shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from their respective obligations
under the covenants set forth in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.14, 4.15, 4.17, 4.18, 4.19 and 4.20 hereof with respect to the outstanding
Notes on and after the date the conditions set forth in Section 8.04 are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(c) through 6.01(g)
hereof shall not constitute Events of Default.
SECTION 8.04. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either Section 8.02
or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
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(i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as shall be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium
and Liquidated Damages, if any, and interest on the outstanding Notes on
the stated maturity or on the applicable redemption date, as the case may
be, and the Company must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(ii) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling
or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case, to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of
the outstanding Notes shall not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and shall be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred;
(iii) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and shall be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit);
(v) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under any material
agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries is bound,
including the Credit Agreement and the Senior Unsecured Term Loan
Agreement;
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Notes over any other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others; and
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent, including, without limitation, the conditions set forth in this
Section 8.04, provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
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SECTION 8.05. Deposited Money and Cash Equivalents to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and non-callable Cash Equivalents (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable Cash
Equivalents deposited pursuant to Section 8.04(i) hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Cash Equivalents held by it as provided
in Section 8.05 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.05(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, interest, or Liquidated Damages,
if any, on any Note and remaining unclaimed for two years after such principal,
and premium, if any, interest, or Liquidated Damages, if any, has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
shall be repaid to the Company.
SECTION 8.07. Reinstatement. If the Trustee or Paying Agent is unable
to apply any United States dollars or non-callable Government Securities in
accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or
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8.03 hereof, as the case may be; provided, however, that, if the Company makes
any payment of principal of, premium, if any, or interest on any Note following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. Without Consent of Holders of Notes. Notwithstanding
Section 9.02 of this Indenture, without the consent of any Holder of Notes, the
Company, the Guarantors and the Trustee may amend or supplement this Indenture
or the Notes:
(a) to cure any ambiguity, defect, error or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Notes in the case of a merger or consolidation or
sale of all or substantially all of the assets of the Company or of such
Guarantor;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect in any
material respect the legal rights under this Indenture of any such Holder;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act;
(f) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof;
(g) to add Guarantors with respect to Notes or to secure the Notes;
(h) to comply with the rules of any applicable securities depositary;
(i) to provide for a successor trustee in accordance with the terms of
this Indenture or to otherwise comply with any requirement of this
Indenture; or
(j) to conform the text of this Indenture or the Notes to any
provision of the "Description of Notes" section of the Offering Memorandum
to the extent that such provision was intended to be a verbatim recitation
of text of such section.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02(b) hereof stating that such amended or supplemental Indenture complies with
this Section 9.01, the Trustee shall join with the Company in the execution of
any amended or supplemental Indenture authorized or
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permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. With Consent of Holders of Notes. Except as provided
below in this Section 9.02, the Company and the Trustee may amend or supplement
this Indenture (including Sections 3.09, 4.10 and 4.14 hereof) and the Notes
with the consent of the Holders of at least a majority in principal amount of
the Notes (including Additional Notes, if any) then outstanding voting as a
single class (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, the Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default or compliance with any provision of this Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes (including Additional Notes, if any) voting as a single
class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, the Notes). Without the consent of at least
75% in aggregate principal amount of the Notes then outstanding (including
Additional Notes, if any) voting as a single class (including consents obtained
in connection with a purchase of, or tender offer or exchange offer for, the
Notes), no waiver or amendment to this Indenture may make any change in the
provisions of Article 10 hereof that adversely affects the rights of any Holder
of Notes. Furthermore, neither Article 8, Article 10 nor Section 11.02 shall be
amended or modified without the consent of the Administrative Agent under the
Credit Agreement. Section 2.08 hereof shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02(b) hereof stating that
any such amended or supplemental Indenture complies with this Section 9.02, the
Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.
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Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Notes (including Additional Notes, if any)
then outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
nonconsenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions, or waive any payment, with respect to the
redemption of the Notes, except with respect to Sections 3.09, 4.10 and
4.14 hereof;
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes (including Additional
Notes, if any) by the Holders of at least a majority in aggregate principal
amount of the Notes and a waiver of the payment default that resulted from
such acceleration);
(e) make any Note payable in money other than U. S. dollars;
(f) make any change in the provisions of this Indenture relating to
waivers of (i) past Defaults or (ii) the rights of the Holders of the Notes
to receive payments of principal of or premium, if any, or interest or
Liquidated Damages, if any, on the Notes;
(g) make any change in Section 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions; or
(h) release any Guarantor from any of its obligations under its Note
Guarantee of these Notes or this Indenture, except in accordance with the
terms of this Indenture.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Notes shall be set forth in a amended or
supplemental Indenture that complies with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note is
a continuing consent by such Holder of a Note and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder of a Note or subsequent Holder of a Note may revoke the consent
as to its Note if the Trustee receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
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SECTION 9.05. Notation on or Exchange of Notes. The Trustee may place
an appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee to Sign Amendments, etc. The Trustee shall sign
any amended or supplemental Indenture authorized pursuant to this Article 9 if
the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment
or supplemental Indenture until the Board of Directors approves it. In executing
any amended or supplemental indenture, the Trustee shall be entitled to receive
and (subject to Section 7.01 hereof) shall be fully protected in relying upon,
in addition to the documents required by Section 13.04 hereof, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's rights, duties or immunities
under this Indenture or otherwise. In signing any amendment, supplement or
waiver, the Trustee shall be entitled to receive an indemnity reasonably
satisfactory to it.
SECTION 9.07. Payments for Consent. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, pay or
cause to be paid any consideration to or for the benefit of any Holder of Notes
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to be paid and is paid to all Holders of the Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement to Subordinate. The Company agrees, and each
Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes
is subordinated in right of payment, to the extent and in the manner provided in
this Article 10, to the prior payment in full in cash and Cash Equivalents of
all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt.
SECTION 10.02. Liquidation; Dissolution; Bankruptcy. The holders of
Senior Debt of the Company will be entitled to receive payment in full in cash
and Cash Equivalents of all Obligations due in respect of Senior Debt of the
Company (including interest after the commencement of any bankruptcy proceeding
at the rate specified in the applicable Senior Debt of the Company) before the
Holders of Notes will be entitled to receive any payment with respect to the
Notes, and until all Obligations with respect to Senior Debt of the Company are
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paid in full in cash or Cash Equivalents, any distribution, to which the Holder
would be entitled shall be made to the holders of such Senior Debt (except that
Holders of Notes may receive and retain Permitted Junior Securities and payments
made from the trust pursuant to Article 8 hereof), in the event of any
distribution to creditors of the Company: (i) in a liquidation or dissolution of
the Company; (ii) in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property; (iii) in an
assignment by the Company for the benefit of its creditors; or (iv) in any
marshaling of the Company's assets and liabilities.
SECTION 10.03. Default on Designated Senior Debt. The Company may not
make any payment in respect of the Notes (except in Permitted Junior Securities
or from the trust pursuant to Article 8 hereof).
(a) In the event of and during the continuation beyond any applicable
grace period of any default in the payment of principal of, interest or
premium, if any, on any Designated Senior Debt, or any Obligation owing
from time to time under or in respect of Senior Debt, or in the event that
any event of default (other than a payment default) with respect to any
Designated Senior Debt shall have occurred and be continuing and shall have
resulted in such Designated Senior Debt becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable; or
(b) If any event of default other than as described in clause (a)
above with respect to any Designated Senior Debt shall have occurred and be
continuing permitting the holders of such Designated Senior Debt or the
holders of any series thereof (or their Representative or Representatives)
to declare such Designated Senior Debt due and payable prior to the date on
which it would otherwise have become due and payable;
(1) in case of any payment or nonpayment default specified in
clause (a), unless and until such default shall have been cured or
waived in writing in accordance with the instruments governing such
Designated Senior Debt or such acceleration shall have been rescinded
or annulled, or
(2) in case of any nonpayment event of default specified in
clause (b), during the period (a "Payment Blockage Period") commencing
on the date the Company or the Trustee receives written notice (a
"Payment Blockage Notice") of such event of default from a
Representative of the holders of such Designated Senior Debt (which
notice shall be binding on the Trustee and the Holders of Notes as to
the occurrence of such a nonpayment event of default) and ending on
the earlier of:
(A) 179 days after such date; and
(B) the date, if any, on which such Designated Senior Debt
to which such default relates is paid in full in cash or such
default is cured or waived in writing in accordance with the
instruments governing such Designated Senior Debt by the holders
of such Designated Senior Debt; and
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(C) the date the Trustee receives notice from the
representative rescinding the Payment Blockage Notice.
(c) No new Payment Blockage Notice may be delivered to the Company or
the Trustee that would start a new Payment Blockage Period unless and
until: (i) 360 days have elapsed since the delivery of the immediately
prior Payment Blockage Notice that started a Payment Blockage Period; and
(ii) all scheduled payments of principal, interest and premium and
Liquidated Damages, if any, on the Notes that have come due have been paid
in full in cash. No nonpayment event of default which existed or was
continuing with respect to the Designated Senior Debt on the date of
delivery of any Payment Blockage Notice to the Trustee shall be or be made
the basis for the commencement of any subsequent Payment Blockage Period
unless such event of default is cured or waived for a period of not less
than 90 consecutive days.
SECTION 10.04. Acceleration of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company and the
Trustee shall promptly notify holders of Senior Debt of the acceleration.
SECTION 10.05. When Distribution Must Be Paid Over. In the event that
the Trustee or any Holder receives any payment of any Obligations with respect
to the Notes (except in Permitted Junior Securities or from the trust pursuant
to Article 8 hereof) at a time when (i) the payment is prohibited by Article 10,
and (ii) the Trustee or such Holder, as applicable, has actual knowledge that
such payment is prohibited by Article 10 hereof (provided that such actual
knowledge shall not be required in the case of any payment default on Designated
Senior Debt of the Company) such payment shall be held by the Trustee or such
Holder, as applicable, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request of the holder of such Senior Debt or
upon any payment default on any Designated Senior Debt, to the holders of Senior
Debt as their interests may appear or their Representative under this Indenture
or other agreement (if any) pursuant to which Senior Debt may have been issued,
as their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.06. Notice by the Company. The Company shall promptly
notify the Trustee and the Paying Agent in writing of any facts known to the
Company that would cause a payment of any Obligations with respect to the Notes
to violate this Article 10, but
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failure to give such notice shall not affect the subordination of the Notes to
the Senior Debt as provided in this Article 10.
SECTION 10.07. Subrogation. After all Senior Debt is paid in full and
until the Notes are paid in full, Holders of Notes shall be subrogated (equally
and ratably with all other Indebtedness pari passu with the Notes) to the rights
of holders of Senior Debt to receive distributions applicable to Senior Debt to
the extent that distributions otherwise payable to the Holders of Notes have
been applied to the payment of Senior Debt. A distribution made under this
Article 10 to holders of Senior Debt that otherwise would have been made to
Holders of Notes is not, as between the Company and Holders, a payment by the
Company on the Notes.
SECTION 10.08. Relative Rights. This Article 10 defines the relative
rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture
shall:
(a) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(b) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior Debt;
or
(c) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 10.09. Subordination May Not Be Impaired by the Company. No
right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
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SECTION 10.11. Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article 10 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
the Trustee shall have received at its Corporate Trust Office at least five
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to violate
this Article 10. Only the Company or a Representative may give the notice.
Nothing in this Article 10 shall impair the claims of, or payments to, the
Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 10.12. Authorization to Effect Subordination. Each Holder of
Notes, by the Holder's acceptance thereof, authorizes and directs the Trustee on
such Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 10, and appoints the
Trustee to act as such Holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in Section 6.09 hereof at least 30
days before the expiration of the time to file such claim, the lenders under the
Credit Agreement are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
ARTICLE 11
NOTE GUARANTEES
SECTION 11.01. Guarantee. Subject to this Article 11 each of the
Guarantors hereby, jointly and severally, unconditionally, as primary obligor
and not merely as surety (such guarantee to be referred to herein as the "Note
Guarantee"), guarantees to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, irrespective of
the validity and enforceability of this Indenture, the Notes or the obligations
of the Company hereunder or thereunder, that: (a) the principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes will be promptly paid
in full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes, if any, if
lawful (subject in all cases to any applicable grace period provided herein),
and all other obligations of the Company to the Holders or the Trustee hereunder
or thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this
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Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Subject to Section 6.06 hereof, each
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenant that this Note Guarantee shall not be discharged
except by complete performance of the obligations contained in the Notes and
this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Note Guarantee. The Guarantors shall have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Note Guarantee.
SECTION 11.02. Subordination of Note Guarantee. The Obligations of
each Guarantor under its Note Guarantee pursuant to this Article 11 shall be
junior and subordinated to the Guarantee of any Senior Debt of such Guarantor on
the same basis as the Notes are junior and subordinated to Senior Debt of the
Company. For the purposes of the foregoing sentence, the Trustee and the Holders
shall have the right to receive and/or retain payments by any of the Guarantors
only at such times as they may receive and/or retain payments in respect of the
Notes pursuant to this Indenture, including Article Ten hereof.
SECTION 11.03. Limitation on Guarantor Liability. Each Guarantor, and
by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Note Guarantee.
To effectuate the foregoing intention, the Trustee, the Holders and the
Guarantors hereby irrevocably agree that the obligations of such Guarantor will,
after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
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obligations of such other Guarantor under this Article Eleven, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
SECTION 11.04. Execution and Delivery of Note Guarantee. Each
Guarantor hereby agrees that its execution and delivery of this Indenture or any
supplemental indentures pursuant to Section 4.18 hereof shall evidence its Note
Guarantee set forth in Section 11.01 without the need for any further notation
on the Notes.
Each of the Guarantors hereby agrees that its Note Guarantee set forth
in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation relating to such Note Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or
any supplemental indenture, entered into pursuant to Section 4.18 or otherwise,
no longer holds that office at the time the Trustee authenticates such Notes or
at any time thereafter, such Guarantor's Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Note Guarantee set forth
in this Indenture on behalf of the Guarantor.
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.18 hereof,
the Company shall cause such Subsidiaries to execute supplemental indentures to
this Indenture in accordance with Section 4.18 hereof and this Article 11, to
the extent applicable.
SECTION 11.05. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06, a Guarantor may not sell or
otherwise dispose of all or substantially all of its assets, or consolidate with
or merge with or into (whether or not such Guarantor is the surviving Person)
another Person unless:
(a) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(b) either:
(i) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such
consolidation or merger is a corporation, partnership or limited
liability company, organized or existing under (i) the laws of the
United States, any state thereof or the District of Columbia or (ii)
the laws of the same jurisdiction as that Guarantor and, in each case,
assumes all the obligations of that Guarantor under this Indenture,
its Note Guarantee and the Registration Rights Agreement pursuant to a
supplemental indenture satisfactory to the Trustee; or
(ii) such sale or other disposition complies with Section 4.10,
including the application of the Net Proceeds therefrom.
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In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by a Guarantor,
such successor Person shall succeed to and be substituted for a Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
SECTION 11.06. Releases Following Sale of Assets. Any Guarantor will
be released and relieved of any obligations under its Note Guarantee, (i) in
connection with any sale or other disposition of all or substantially all of the
assets of that Guarantor (including by way of merger or consolidation) to a
Person that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the sale or other disposition of all or
substantially all of the assets of that Guarantor complies with Section 4.10
hereof, including the application of the Net Proceeds therefrom; (ii) in
connection with any sale of all of the Capital Stock of a Guarantor to a Person
that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the sale of all such Capital Stock of
that Guarantor complies with Section 4.10 hereof, including the application of
the Net Proceeds therefrom; (iii) if the Company properly designates any
Restricted Subsidiary that is a Guarantor (other than the Egg Products Division)
as an Unrestricted Subsidiary in accordance with the terms hereof; or (iv) in
connection with any sale of Capital Stock of a Guarantor (other than the Egg
Products Division) to a Person that results in the Guarantor no longer being a
Subsidiary of the Company, if the sale of such Capital Stock of that Guarantor
complies with Section 4.10, including the application of the Net Proceeds
therefrom. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article Eleven.
SECTION 11.07. Severability. In case any provision of this Note
Guarantee shall be invalid, illegal or unenforceable, that portion of such
provision that is not invalid, illegal
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or unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
ARTICLE 12
SATISFACTION AND DISCHARGE
SECTION 12.01. Satisfaction and Discharge. (a) Subject to the
provisions of Sections 12.04 and 12.05, this Indenture shall be discharged and
shall cease to be of further effect as to all Notes issued hereunder, when the
Company or any Guarantor have paid or caused to be paid all sums payable by it
under the Indenture and either:
(1) all Notes that have been authenticated (except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose payment
money has theretofore been deposited in trust and thereafter repaid to the
Company) have been delivered to the Trustee for cancellation; or
(2) (i) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise or shall become due and payable within
one year, including as a result of a redemption notice properly given
pursuant to the Indenture, and the Company or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as shall be sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the Notes not
delivered to the Trustee for cancellation for principal, premium, accrued
interest and Liquidated Damages, if any, to the date of maturity or
redemption; (ii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit shall not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; and (iii) the Company has delivered irrevocable
instructions to the Trustee under this Indenture to apply the deposited
money toward the payment of the Notes at maturity or the redemption date,
as the case may be.
(b) The Company shall deliver an Officers' Certificate and an Opinion
of Counsel to the Trustee stating that all conditions precedent to satisfaction
and discharge have been satisfied.
(c) Notwithstanding the above, the Trustee shall pay to the Company
from time to time upon its request any cash or Government Securities held by it
as provided in this section which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
delivered to the Trustee, are in excess of the amount thereof that would then be
required to be deposited to effect a satisfaction and discharge under this
Article 12.
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SECTION 12.02. Deposited Money and Government Securities to Be Held in
Trust. Subject to Section 12.03 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 12.02, the
"Trustee") pursuant to Section 12.01 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, interest, and
Liquidated Damages, if any, but such money be segregated from other funds except
to the extent required by law.
SECTION 12.03. Repayment to the Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, interest, or Liquidated Damages,
if any, on any Note and remaining unclaimed for two years after such principal,
premium, if any, interest, or Liquidated Damages, if any, has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times or The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall be
repaid to the Company.
SECTION 12.04. Survival. In the event that the Company makes (or
causes to be made) an irrevocable deposit with the Trustee for the benefit of
the Holders pursuant to Section 12.01(a)(2) hereof, prior to the date of
maturity or redemption, as the case may be, the following provisions of the
Indenture shall survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, premium, if any, interest and Liquidated
Damages, if any, on such Notes when such payments are due from the trust;
(2) the Company's obligations with respect to such Notes under Article
2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith; and
(4) this Article 12.
SECTION 12.05. Reinstatement. If the Trustee or Paying Agent is unable
to apply any Government Securities in accordance with Section 12.02 hereof, as
the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture
93
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 12.01(a)(2) hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 12.02
hereof; provided, however, that, if the Company makes any payment of principal
of, premium, if any, interest and Liquidated Damages, if any, on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls. This Indenture is subject
to the provisions of the TIA that are required to be a part of this Indenture,
and shall, to the extent applicable, be governed by such provisions. If any
provision of this Indenture modifies any TIA provision that may be so modified,
such TIA provision shall be deemed to apply to this Indenture as so modified. If
any provision of this Indenture excludes any TIA provision that may be so
excluded, such TIA provision shall be excluded from this Indenture.
The provisions of TIA (S)(S)310 through 317 that impose duties on any
Person (including the provisions automatically deemed included unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
SECTION 13.02. Notices. Any notice or communication by the Company,
any Guarantor or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address
If to the Company and/or any Guarantor:
Michael Foods, Inc.
301 Carlson Parkway
Suite 400
Minnetonka, Minnesota 55305
Telecopier No.: (952) 258-4000
Attention: John D. Reedy, Executive Vice President
and Chief Financial Officer
94
With a copy to:
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, New York 10153
Telecopier No.: (212) 310-8007
Attention: Todd C. Chandler
If to the Trustee:
Wells Fargo Bank Minnesota, National Association
Corporate Trust Services
213 Court Street
Suite 703
Middletown, Connecticut 06457
Telecopier No.: (860) 704-6219
Attention: Joseph O'Donnell
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 13.03. Communication by Holders of Notes with Other Holders of
Notes. Holders may communicate pursuant to TIA (S)312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA
(S)312(c).
95
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture (other than in connection with the Exchange Offer
contemplated by Section 2.06(e) or under Section 2.02 hereof unless required by
the TIA), the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied;
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied; and
(c) where applicable, a certificate or opinion by an independent
certified public accountant satisfactory to the Trustee that complies with
TIA Section 314(c).
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S) 314(e) and shall
include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 13.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
SECTION 13.07. No Personal Liability of Directors, Officers, Employees
and Stockholders. No director, officer, employee, incorporator or stockholder of
the Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Notes, the Exchange
Notes, the Note Guarantees, this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. Such waiver may not be
effective to waive
96
liabilities under the federal securities laws and it is the view of the SEC that
such a waiver is against public policy.
SECTION 13.08. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 13.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
All agreements of each Guarantor in this Indenture shall bind its successors,
except as otherwise provided in Section 11.05.
SECTION 13.10. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors. All agreements of each Guarantor in
this Indenture shall bind its successors, except as otherwise provided in
Section 11.05.
SECTION 13.11. Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 13.12. Counterpart Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
SECTION 13.13. Table of Contents, Headings, etc. The Table of
Contents, Cross-Reference Table and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[Signatures on following page]
97
SIGNATURES
Dated as of November 20, 2003
Very truly yours,
MICHAEL FOODS, INC.
By: /s/ Gregg A. Ostrander
--------------------------------
Name: Gregg A. Ostrander
Title: Chief Executive Officer
and President
CRYSTAL FARMS REFRIGERATED
DISTRIBUTION COMPANY
By: /s/ James D. Clarkson
--------------------------------
Name: James D. Clarkson
Title: President
NORTHERN STAR CO.
By: /s/ James D. Clarkson
--------------------------------
Name: James D. Clarkson
Title: President
98
KMS DAIRY, INC.
By: /s/ James D. Clarkson
--------------------------------
Name: James D. Clarkson
Title: President
M. G. WALDBAUM COMPANY
By: /s/ Bill L. Goucher
--------------------------------
Name: Bill L. Goucher
Title: President
PAPETTI ELECTROHEATING CORPORATION
By: /s/ Bill L. Goucher
--------------------------------
Name: Bill L. Goucher
Title: President
PAPETTI'S HYGRADE EGG PRODUCTS, INC.
By: /s/ Bill L. Goucher
--------------------------------
Name: Bill L. Goucher
Title: President
99
CASA TRUCKING, INC.
By: /s/ Gregg A. Ostrander
--------------------------------
Name: Gregg A. Ostrander
Title: Chief Executive Officer
and President
WISCO FARM COOPERATIVE
By: /s/ John D. Reedy
--------------------------------
Name: John D. Reedy
Title: Vice President-Finance
WFC, INC.
By: /s/ John D. Reedy
--------------------------------
Name: John D. Reedy
Title: Vice President-Finance
FARM FRESH FOODS, INC.
By: /s/ James D. Clarkson
--------------------------------
Name: James D. Clarkson
Title: President
100
MICHAEL FOODS OF DELAWARE, INC.
By: /s/ Gregg A. Ostrander
--------------------------------
Name: Gregg A. Ostrander
Title: Chief Executive Officer
and President
MINNESOTA PRODUCTS, INC.
By: /s/ James D. Clarkson
--------------------------------
Name: James D. Clarkson
Title: President
101
WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Robert L. Reynolds
--------------------------------
Name: Robert L. Reynolds
Title: Vice President
102
EXHIBIT A
FORM OF NOTE
[Face of Note]
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THIS NOTE AND ANY GUARANTEES OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY GUARANTEES OF THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE AND ANY GUARANTEES OF THIS NOTE)
(THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E)
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-2
CUSIP [144A 594079AB1]
[REG S U59325AA5]
ISIN [REG S USU59325AA54]
MICHAEL FOODS, INC.
8% Senior Subordinated Notes due 2013
No. $
--- --------------
MICHAEL FOODS, INC.promises to pay to CEDE & Co., or registered
assigns, the principal sum of DOLLARS on November 15, 2013.
----------
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Initial Payment Date: May 15, 2004
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.
[SIGNATURE PAGE FOLLOWS]
A-3
Dated: November 20, 2003
Michael Foods, Inc.
By:
--------------------------------
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:
------------------------------------
(Authorized Signatory)
A-4
[Reverse Side of Note]
MICHAEL FOODS, INC.
8% Senior Subordinated Notes due 2013
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Michael Foods, Inc. , a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 8%
per annum from the date hereof until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company shall pay interest and any Liquidated Damages
semi-annually on May 15 and November 15 of each year, or if any such day is not
a Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be May 15, 2004. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest shall be computed on the basis of a
360 [ ] day year of twelve 30 [ ] day months.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the May 1 or November 1
next preceding the Interest Payment Date, even if such Notes are canceled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The Notes
shall be payable as to principal, premium and Liquidated Damages, if any, and
interest at the office or agency of the Company maintained for such purpose
within the City and State of New York, or, at the option of the Company, payment
of interest and Liquidated Damages may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds shall be required with respect
to principal of and interest, premium and Liquidated Damages on, all Global
Notes and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, Wells Fargo Bank Minnesota,
National Association, the Trustee under the Indenture, shall act as Paying Agent
and Registrar.
A-5
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of November 20, 2003 (the "Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Indenture pursuant to which
the Notes are issued provides that an unlimited aggregate principal amount of
Notes may be issued thereunder.
5. Optional Redemption. Except as set forth in this paragraph 5 and
paragraph 6 below, the Notes shall not be redeemable at the Company's option
prior to November 15, 2008. Thereafter, the Company may redeem all or a part of
these Notes, upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on November 15 of the years indicated below:
Year Percentage
---- ----------
2008........................... 104.000%
2009........................... 102.667%
2010........................... 101.334%
2011 and thereafter............ 100.000%
Notwithstanding the foregoing, at any time prior to November 15, 2006, the
Company may on one or more occasions redeem up to 40% of the aggregate principal
amount of Notes originally issued under the Indenture at a redemption price of
108.00% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the redemption date, with the net cash
proceeds of one or more Equity Offerings of the Company (or of the Parent to the
extent such proceeds are contributed to the common equity of the Company);
provided that at least 60% of the aggregate principal amount of Notes remains
outstanding immediately after the occurrence of such redemption (excluding Notes
held by the Company and its Subsidiaries); and such redemption shall occur
within 90 days of the date of the closing of such Equity Offering.
6. Mandatory Redemption. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
7. Repurchase at Option of Holder. Upon the occurrence of a Change of
Control, each Holder of Notes will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase (the "Change of Control Payment").
Within 30 days following any Change of Control, the Company will mail a notice
to each Holder describing the
A-6
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice.
If the Company or a Restricted Subsidiary consummates any Asset Sales,
within 365 days of each date on which the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company will be required to make an offer to all
Holders of Notes (a "Repurchase Offer") to purchase the maximum principal amount
of Notes that may be purchased out of the Excess Proceeds, at an offer price in
cash in an amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase,
in accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes (including any Additional Notes) tendered pursuant
to a Repurchase Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased on a pro rata basis. Holders of Notes that are the subject
of an offer to purchase shall receive a Repurchase Offer from the Company prior
to any related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Notes.
8. Notice of Redemption. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption. Also, the
Company need not exchange or register the transfer of any Notes for a period of
15 days before a selection of Notes to be redeemed.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes and Additional Notes, if any, voting as a single class, and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes and Additional Notes, if any, voting as a single class.
A-7
Without the consent of any Holder of a Note, the Indenture or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation or sale of all or substantially
all of the assets of the Company, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act or to allow any
Subsidiary to guarantee the Notes, to provide for the issuance of Additional
Notes in accordance with the limitations set forth in the Indenture, or to allow
any Guarantor to execute a supplemental indenture to the Indenture with respect
to the Notes.
12. Defaults and Remedies. Events of Default include: (a) default for
30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes (whether or not permitted by Article 10 of the Indenture);
(b) default in payment of the principal of or premium, if any, on the (whether
or not permitted by Article 10 of the Indenture); (c) failure by the Company or
any of its Restricted Subsidiaries to comply with the provisions of Sections
4.10, 4.14 and 5.01 of the Indenture; (d) failure by the Company or any of its
Restricted Subsidiaries for 45 days after notice from the Trustee or holders of
at least 25% in principal amount of the Notes (including Additional Notes, if
any) then outstanding to comply with any of the other agreements in the
Indenture; (e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists, or
is created after the date of the Indenture, if that default: (i) is caused by a
failure to make any payment when due at the final maturity of such Indebtedness
(a "Payment Default"); or (ii) results in the acceleration of such Indebtedness
prior to its express maturity; and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $15.0 million or more; (f) failure by
the Company or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $15.0 million, which judgments are not paid, discharged
or stayed for a period of 60 days after such judgments have become
non-appealable and, in the event such judgment is covered by insurance, an
enforcement proceeding has been commenced by any creditor upon such judgment or
decree that is not properly stayed; (g) except as permitted by the Indenture,
any Note Guarantee of a Guarantor (other than an Immaterial Guarantor) being
held in any judicial proceeding to be unenforceable or invalid or ceasing for
any reason to be in full force and effect or any Guarantor (other than an
Immaterial Guarantor), or any Person acting on behalf of any Guarantor, (other
than an Immaterial Guarantor) shall deny or disaffirm its obligations under its
Note Guarantee; and (h) certain events of bankruptcy or insolvency with respect
to the Company or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary.
In the event of a declaration of acceleration of the Notes because an Event of
Default has occurred and is continuing as a result of the acceleration of any
Indebtedness described in clause (f) above, the declaration of acceleration of
the Notes shall be automatically annulled if the holders of any Indebtedness
described in clause (f) above have rescinded the declaration of acceleration in
respect of such Indebtedness within 30 days of the date of such declaration and
if (i) the
A-8
annulment of the acceleration of Notes would not conflict with any judgment or
decree of a court of competent jurisdiction and (ii) all existing Events of
Default, except nonpayment of principal or interest on the Notes that became due
solely because of the acceleration of the Notes have been cured or waived. If
any Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
principal, premium, if any, accrued interest and Liquidated Damages, if any, of
the Notes to be due and payable immediately. Notwithstanding the foregoing, in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency, with respect to the Company or any Significant Subsidiary (or any
group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary), all outstanding Notes shall become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture, the Notes or the Notes Guarantees except as provided in the
Indenture. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. No director, officer, employee,
incorporator or stockholder of the Company or any of the Guarantors, as such,
shall have any liability for any obligations of the Company or such Guarantor
under the Notes, the Note Guarantees or the Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.
15. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement, dated as of November 20, 2003, between the Company and the parties
named on the signature pages thereof or, in the case of Additional
A-9
Notes, Holders of Restricted Global Notes and Restricted Definitive Notes shall
have the rights set forth in one or more registration rights agreements, if any,
between the Company and the other parties thereto, relating to rights given by
the Company to the purchasers of Additional Notes (collectively, the
"Registration Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Copies of Documents. The Company shall furnish to any Holder upon
written request and without charge a copy of the Indenture and/or the
Registration Rights Agreement. Requests may be made to:
Michael Foods, Inc.
301 Carlson Parkway
Suite 400
Minnetonka, Minnesota 55305
Attention: John D. Reedy
Executive Vice President and
Chief Financial Officer
A-10
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
----------------------------------
(Insert assignee's legal name)
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
---------------------
Your Signature:
--------------------------
(Sign exactly as your name
appears on the face of
this Note)
Signature Guarantee*:
------------------------------
* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
acceptable to the Trustee).
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased:
$
-----------------
Date:
--------------
Your Signature:
--------------------------
(Sign exactly as your name
appears on the face of
this Note)
Tax Identification No.:
------------------
Signature Guarantee*:
------------------------------
* Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
acceptable to the Trustee).
A-12
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Michael Foods, Inc.
301 Carlson Parkway
Suite 400
Minnetonka, Minnesota 55305
Telecopier No.: (952) 258-4000
Wells Fargo Bank Minnesota,
National Association
213 Court Street
Suite 703
Middletown, Connecticut 06457
Telecopier No.: (860) 704-6219
Attention: Corporate Trust Services
Re: 8% Senior Subordinated Notes due 2013
Reference is hereby made to the Indenture, dated as of November 20,
2003 (the "Indenture"), between Michael Foods, Inc., as issuer (the "Company"),
and Wells Fargo Bank Minnesota, National Association, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
, (the "Transferor") owns and proposes to transfer the
---------------
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $ in such Note[s] or interests (the "Transfer"),
----------
to (the "Transferee"), as further specified in Annex A hereto. In
----------
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the 144A
Global Note and/or the Definitive Note and in the Indenture and the Securities
Act.
2. Check if Transferee will take delivery of a beneficial interest in
the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note and/or the Definitive Note and in the Indenture and
the Securities Act.
3. Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Definitive Note pursuant to any provision
of the Securities Act other than Rule 144A or Regulation S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of
the Securities Act other
B-2
than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within the
meaning of Regulation D under the Securities Act and the Transfer complies
with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements
of the exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount of
Notes at the time of transfer of less than $250,000, an Opinion of Counsel
provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed
on the IAI Global Note and/or the Definitive Notes and in the Indenture and
the Securities Act.
4. Check if Transferee will take delivery of a beneficial interest in
an Unrestricted Global Note or of an Unrestricted Definitive Note.
(b) Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(c) Check if Transfer is pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) he restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(d) Check if Transfer is pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to
B-3
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated:
---------------, -----
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP ), or
-----
(ii) Regulation S Global Note (CUSIP ), or
-----
(iii) IAI Global Note (CUSIP ); or
-----
(b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP ), or
-----
(ii) Regulation S Global Note (CUSIP ), or
-----
(iii) IAI Global Note (CUSIP ); or
------
(iv) Unrestricted Global Note (CUSIP ); or
-----
(b) a Restricted Definitive Note; or
(c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Michael Foods, Inc.
301 Carlson Parkway
Suite 400
Minnetonka, Minnesota 55305
Telecopier No.: (952) 258-4000
Wells Fargo Bank Minnesota,
National Association
213 Court Street
Suite 703
Middletown, Connecticut 06457
Telecopier No.: (860) 704-6219
Attention: Corporate Trust Services
Re: 8% Senior Subordinated Notes due 2013
(CUSIP 594079AB1)
Reference is hereby made to the Indenture, dated as of November 20,
2003 (the "Indenture"), between Michael Foods, Inc., as issuer (the "Company")
and Wells Fargo Bank Minnesota, National Association, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
, (the "Owner") owns and proposes to exchange the
----------------
Note[s] or interest in such Note[s] specified herein, in the principal amount
of $ in such Note[s] or interests (the "Exchange"). In connection
-------------
with the Exchange, the Owner hereby certifies that:
5. Exchange of Restricted Definitive Notes or Beneficial Interests in
a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note
(e) Check if Exchange is from Beneficial Interest in a Restricted
Global Note to Beneficial Interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(f) Check if Exchange is from Beneficial Interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(g) Check if Exchange is from Restricted Definitive Note to Beneficial
Interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(h) Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
6. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes
(i) Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
C-2
(j) Check if Exchange is from Restricted Definitive Note to Beneficial
Interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
144A Global Note, Regulation S Global Note, IAI Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Owner]
By:
------------------------------------
Name:
Title:
Dated:
---------------, -----
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Michael Foods, Inc.
301 Carlson Parkway
Suite 400
Minnetonka, Minnesota 55305
Telecopier No.: (952) 258-4000
Wells Fargo Bank Minnesota,
National Association
213 Court Street
Suite 703
Middletown, Connecticut 06457
Telecopier No.: (860) 704-6219
Re: 8% Senior Subordinated Notes due 2013
Reference is hereby made to the Indenture, dated as of November 20,
2003 (the "Indenture"), between Michael Foods, Inc., as issuer (the "Company")
and Wells Fargo Bank Minnesota, National Association, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $ aggregate
----------
principal amount of:
(a) a beneficial interest in a Global Note, or
(b) a Definitive Note,
we confirm that:
7. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
8. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as
defined therein), (C) to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes (or has furnished on its behalf
by a U.S. broker-dealer) to you and to the Company a signed letter substantially
in the form of this letter and, if such transfer is in respect of a principal
amount of Notes, at the time of transfer of less than $250,000, an Opinion of
Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
9. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.
10. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
11. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:
------------------------------------
Name:
Title:
Dated:
---------------, -----
D-2
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO ADD SUBSEQUENT GUARANTORS
This Supplemental Indenture, dated as of (this
----------------
"Supplemental Indenture"), among [NAME OF FUTURE GUARANTOR] (the "New
Guarantor"), Michael Foods, Inc. (together with its successors and assigns, the
"Company"), each other then existing Guarantor under the Indenture referred to
below (the "Guarantors"), and Wells Fargo Minnesota, National Association, as
Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company, the Guarantors and the Trustee have heretofore
executed and delivered an Indenture, dated as of November 20, 2003 (as amended,
supplemented, waived or otherwise modified, the "Indenture"), providing for the
issuance of a principal amount of up to $150,000,000 of 8% Senior Subordinated
Notes due 2013 of the Company;
WHEREAS, Section 4.18 of the Indenture provides that the Company is
required to cause Domestic Subsidiaries that are created or acquired after the
date of the Indenture to execute and deliver to the Trustee a Supplemental
Indenture pursuant to which such Subsidiary will fully and unconditionally
guarantee, on a joint and several basis with the other Guarantors, the full and
prompt payment of the Obligations of the Company under the Notes and the
Indenture on a senior subordinated basis, and the performance of all other
obligations of the Company to the Holders and the Trustee all in accordance with
the terms set forth in Article Eleven of the Indenture;
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the
Company and the Guarantors are authorized to execute and deliver this
Supplemental Indenture to amend the Indenture, without the consent of any
Holder;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the other Guarantors and the Trustee mutually covenant
and agree for the equal and ratable benefit of the Holders of the Notes as
follows:
ARTICLE ONE
DEFINITIONS
Section 1.1 Defined Terms. As used in this Supplemental Indenture,
terms defined in the Indenture or in the preamble or recital hereto are used
herein as therein defined, except that the term "Holders" in this Supplemental
Indenture shall refer to the term "Holders" as defined in the Indenture and the
Trustee acting on behalf or for the benefit of such holders. The words "herein,"
"hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
E-1
ARTICLE TWO
AGREEMENT TO BE BOUND; GUARANTEE
Section 2.1 Agreement to be Bound. The New Guarantor hereby becomes a
party to the Indenture as a Guarantor and as such will have all of the rights
and be subject to all of the obligations and agreements of a Guarantor under the
Indenture. The New Guarantor agrees to be bound by all of the provisions of the
Indenture applicable to a Guarantor and to perform all of the obligations and
agreements of a Guarantor under the Indenture.
Section 2.2 Guarantee. The New Guarantor hereby unconditionally
guarantees, as primary obligor and not merely as surety, jointly and severally
with each other Guarantor, to each Holder of the Notes and the Trustee, the full
and punctual payment when due, whether at maturity, upon redemption or
repurchase, by declaration of acceleration or otherwise, of the obligations
pursuant to Article Eleven of the Indenture and subject to the terms and
conditions of the Indenture.
ARTICLE THREE
MISCELLANEOUS
Section 3.1 Notices. Any notice or communication by the Company, any
Guarantor or the Trustee to the others is duly given if in writing and delivered
in Person or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, to the others' address.
If to the Company and/or any Guarantor:
Michael Foods, Inc.
301 Carlson Parkway
Suite 400
Minnetonka, Minnesota 55305
Telecopier No.: [ ]
---------
Attention: John D. Reedy, Executive Vice President and Chief Financial Officer
With a copy to:
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, New York 10153
Telecopier No.: (212) 310-8007
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If to the Trustee:
Wells Fargo Bank Minnesota, National Association
213 Court Street
Suite 703
Middletown, Connecticut 06457
Telecopier No.: (860) 704-6219
Attention: Joseph O'Donnell
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 3.2 Ratification of Indenture; Supplemental Indenture Part of
Indenture; Trustee's Disclaimer. Except as expressly amended hereby, the
Indenture is in all respects ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and
every Holder of Notes heretofore or hereafter authenticated and delivered shall
be bound hereby. The Trustee makes no representation or warranty as to the
validity or sufficiency of this Supplemental Indenture.
Section 3.3 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE, THE INDENTURE,
THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
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Section 3.4 No Adverse Interpretation of Other Agreements. This
Supplemental Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person (other
than the Indenture). Any such indenture, loan or debt agreement may not be used
to interpret this Supplemental Indenture or the Indenture.
Section 3.5 Successors. All agreements of the New Guarantor in this
Supplemental Indenture shall bind its successors, except as otherwise provided
in Section 11.05 of the Indenture.
Section 3.6 Severability. In case any provision in this Supplemental
Indenture, the Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 3.7 Counterpart Originals. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
Section 3.8 Headings, etc. The Headings of the Articles and Sections
of this Supplemental Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Supplemental Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
as a Guarantor
By:
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Name:
Title:
MICHAEL FOODS, INC.
By:
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Name:
Title:
WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By:
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Name:
Title:
[EACH THEN EXISTING GUARANTOR]
By:
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Name:
Title:
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