Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1993
______________________
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
__________________ __________________
Commission File No. 0-7570,
______
Delaware Canandaigua Wine Company, Inc. and its 16-0716709
subsidiaries
New York Batavia Wine Cellars, Inc. 16-1222994
Delaware Bisceglia Brothers Wine Co. 94-2248544
California California Products Company 94-0360780
New York Guild Wineries & Distilleries, Inc. 16-1401046
South Carolina Tenner Brothers, Inc. 57-0474561
New York Widmer's Wine Cellars, Inc. 16-1184188
Delaware Barton Incorporated 36-3500366
Delaware Barton Brands, Ltd. 36-3185921
Maryland Barton Beers, Ltd. 36-2855879
Connecticut Barton Brands of California, Inc. 06-1048198
Georgia Barton Brands of Georgia, Inc. 58-1215938
New York Barton Distillers Import Corp. 13-1794441
Delaware Barton Financial Corporation 51-0311795
Wisoncsin Stevens Point Beverage Co. 39-0638900
New York Monarch Wine Company, Limited Partnership 36-3547524
Illinois Barton Management, Inc. 36-3539106
New York Vintners International Company, Inc. 16-1443663
_____________ _______________________________________ __________
(State or other (Exact Name of registrant as specified (I.R.S.
incorporation or in its charter) Employer
organization) Identification
Number)
116 Buffalo Street, Canandaigua, New York 14424
___________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (716)394-7900
_____________
Former Name, Former Adress and Former Fiscal Year, if Changed Since
Last Report
Indicate by check whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant wasrequired to file such reports), and (2) has been subject to
such filing requirements for the past 90 days Yes X No
The number of shares outstanding of each of the classes of common
stock of Canandaigua Wine Company, Inc. as of January 5, 1994 is
set forth below (all of the registrants, other than Canandaigua Wine Company,
Inc. are direct or indirect wholly owned subsidiaries of Canandaigua
Wine Company, Inc.).
Class Number of Shares
Outstanding
Class A Common Stock,
Par Value $.01 Per Share 12,548,946
Class B Convertible Common Stock,
Par Value $.01 Per Share 3,399,451
<PAGE>
Part 1 - Financial Information
Item 1. Financial Statements
CANANDAIGUA WINE COMPANY, INC. AND SUBSIDIARIES
<TABLE>
Consolidated Balance Sheets
<CAPTION>
November 30,
1993 August 31,
(Unaudited) 1993
____________ ___________
Assets
______
<S> <C> <C>
Current Assets:
Cash and equivalents $ 3,495,415 $ 3,717,782
Accounts receivable 123,405,262 75,908,946
Inventories 249,383,577 147,165,267
Prepaid expenses and other current assets 14,910,606 17,262,919
____________ ____________
Total Current Assets $391,194,860 $244,054,914
Property, Plant and Equipment, at cost, less
accumulated depreciation 159,422,486 78,600,281
Other Assets 33,611,988 32,527,291
____________ ____________
Total Assets $584,229,334 $355,182,486
____________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 12,091,368 $ 11,828,000
Notes Payable - banks 70,500,000 9,000,000
Accounts payable - trade 45,945,977 41,288,481
Federal and state income taxes 3,060,278 950,509
Federal and state excise taxes 13,433,764 11,194,941
Accrued salaries, bonuses and commissions 4,931,962 4,276,960
Other accrued liabilities 34,636,310 16,499,606
Deferred income taxes 1,763,241 1,763,241
____________ ____________
Total Current Liabilities $186,362,900 $ 96,801,738
Long-Term Debt, less current portion $179,207,008 $108,303,233
____________ ____________
Deferred Income Taxes $ 20,629,329 $ 20,629,329
____________ ____________
Other Long-Term Liabilities $ 3,304,046 $ 3,344,414
____________ ____________
Stockholders' Equity
Class A Common Stock, $.01 par value -
Authorized 60,000,000 shares;
Issued, 13,789,197 at November 30, 1993
and 10,543,645 at August 31, 1993 $ 137,892 $ 105,439
Class B Convertible Common Stock, $.01 par value
Authorized 20,000,000 shares;
Issued, 4,059,176 at November 30, 1993
and 4,068,576 at August 31, 1993 40,592 40,685
Additional paid-in capital 110,138,649 47,201,942
Retained earnings 92,178,537 86,525,325
___________ ___________
202,495,670 133,873,391
___________ ___________
Less Treasury Stock
Class A Common Stock, 1,274,251 shares at
November 30, 1993 and
August 31, 1993, at cost (5,563,096) (5,563,096)
Class B Convertible Common Stock, 625,725
shares at November 30, 1993 and
August 31, 1993, at cost (2,206,523) (2,206,523)
____________ ___________
Total Stockholders' Equity $194,726,051 $126,103,772
____________ ____________
Total Liabilities and Stockholders' Equity $584,229,334 $355,182,486
____________ ____________
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
CANANDAIGUA WINE COMPANY, INC. AND SUBSIDIARIES
_______________________________________________
<TABLE>
Consolidated Statements of Income and Retained Earnings
<CAPTION>
Three Month Period Ended
November 30,
1993 1992
(Unaudited) (Unaudited)
___________ ___________
<S> <C> <C>
GROSS SALES $213,954,227 $88,161,077
Less excise taxes ( 59,469,612) (17,052,320)
____________ __________
Net sales $154,484,615 $71,108,757
COST OF PRODUCT SOLD (109,829,181) (49,571,752)
___________ __________
Gross profit on sales $ 44,655,434 $21,537,005
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES (31,647,516) (14,321,643)
__________ __________
Operating income $ 13,007,918 $ 7,215,362
INTEREST INCOME 38,025 103,948
INTEREST EXPENSE (3,853,823) (1,506,906)
_________ _________
Income before provision for $ 9,192,120 $ 5,812,404
income taxes
PROVISION FOR FEDERAL AND STATE (3,538,908) (2,208,700)
_________ _________
INCOME TAXES
NET INCOME $ 5,653,212 $ 3,603,704
RETAINED EARNINGS, BEGINNING 86,525,325 $70,921,273
__________ ___________
RETAINED EARNINGS, ENDING $ 92,178,537 $74,524,977
____________ ___________
NET INCOME PER COMMON AND
EQUIVALENT SHARE:
Primary $.40 $.31
____ ____
Fully Diluted $.37 $.28
____ ____
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Primary 14,033,381 11,759,996
__________ __________
Fully Diluted 16,252,297 15,053,081
__________ __________
Dividend per share NONE NONE
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
CANANDAIGUA WINE COMPANY, INC. AND SUBSIDIARIES
<TABLE>
Consolidated Statements of Cash Flows
<CAPTION>
For Period Ended
November 30,
1993 1992
(Unaudited) (Unaudited)
___________ ___________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 5,653,212 $ 3,603,704
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation of property, plant and equipment 2,293,707 1,534,344
Amortization of intangible assets 843,803 536,386
Gain on sale of equipment 0 (184,968)
Accrued interest on converted debentures 682,141 0
Change in assets and liabilities, net of
effects from purchase of businesses:
Accounts receivable (27,318,546) (10,806,728)
Inventories (9,686,568) (16,311,778)
Prepaid expenses 2,745,709 2,302,017
Accounts payable (28,607,858) (17,155,173)
Accrued Federal and state income taxes 2,109,769 2,181,771
Accrued Federal and state excise taxes 1,181,345 (126,975)
Accrued salaries and commissions 655,002 72,165
Other accrued liabilities 1,015,733 132,618
Other (43,705) (212,535)
____________ ____________
Total adjustments $(54,129,468) $ (38,038,856)
____________ _____________
Net cash used by operating activities $(48,476,256) $ (34,435,152)
____________ _____________
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net of minor disposals
(1,525,590) (2,210,774)
Acquisition costs for purchase of business-net of cash acquired
3,200 0
Proceeds from sale of equipment 0 649,000
___________ ______________
Net cash used by investing activities $ (1,522,390)$ (1,561,774)
___________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds of short-term borrowings $ 50,181,358 $ 35,000,000
Principal payments of long-term debt (402,120) (14,832)
Proceeds of employee stock appreciation & purchase plan 0 50,274
Fractional shares paid for debenture conversions (2,959) 0
____________ ______________
Net cash provided by financing activities $ 49,776,279 $ 30,035,442
____________ ______________
NET DECREASE IN CASH AND CASH INVESTMENTS $ (222,367)$ (961,484)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,717,782 2,193,543
___________________________
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,495,415 $ 1,232,059
___________________________
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 2,594,162 $ 1,506,906
___________________________
Income taxes $ 1,429,140 $ 26,929
___________________________
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Fair value of assets acquired $199,493,954
Liabilities assumed (52,661,669)
___________
Consideration paid $146,832,285
Less - amounts borrowed (142,622,285)
Less - issuance of Class A Common Stock options (4,210,000)
__________
Net cash paid for acquisition $ 0
_
Issuance of Class A Common Stock for conversion
of debentures $ 58,960,000
Write off unamortized deferred
financing costs on debentures (1,568,719)
Write off unpaid accrued interest on debentures
through conversion date 1,370,743
_________
Total addition to Stockholders' Equity
from Conversion $58,762,024
___________
</TABLE?
The accompanying notes to consolidated financial statements are an integral part of these
statements.
<PAGE>
CANANDAIGUA WINE COMPANY, INC. AND SUBSIDIARIES
_______________________________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1993
1) MANAGEMENT REPRESENTATIONS:
The condensed consolidated financial statements included
herein have been prepared by the Company, without audit, pursuant
to the rules and regulations of the Securities and Exchange
Commission applicable to quarterly reporting on Form 10-Q and
reflect, in the opinion of the Company, all adjustments necessary
to present fairly the financial information for Canandaigua Wine
Company, Inc. and its consolidated subsidiaries. All such
adjustments are of a normal recurring nature. Certain information
and footnote disclosures normally included in financial
statements, prepared in accordance with generally accepted
accounting principles, have been condensed or omitted as
permitted by such rules and regulations. These consolidated
financial statements should be read in conjunction with the
consolidated financial statements and related notes, included in
the Company's Annual Report on Form 10-K, for the fiscal year
ended August 31, 1993.
2) INVENTORIES:
Inventories are valued at the lower of cost (computed in
accordance with the last-in, first-out (LIFO) or first-in, first-
out (FIFO) methods) or market. The percentage of inventories
valued using the LIFO method is 95%, 88%, and 96% at November 30,
1993, August 31, 1993, and November 30, 1992, respectively.
Replacement cost of the inventories determined on a FIFO basis
approximated $249,439,000, $146,421,000, and $108,992,000 at
November 30, 1993, August 31, 1993, and November 30,
1992, respectively. At November 30, 1993, August 31, 1993 and
November 30, 1992, the net realizable value of the Company's
inventories was in excess of $249,383,577, $147,165,267, and
$109,006,179, respectively.
Elements of cost include materials, labor and overhead and
consist of the following:
</TABLE>
<TABLE>
<CAPTION>
November 30, August 31, November 30,
____________ __________ ____________
1993 1993 1992
____ ____ ____
<S> <C> <C> <C>
Raw materials $37,076,076 $31,683,657 $40,417,572
and supplies
Wines, whiskey 158,739,578 73,400,765 53,012,924
and spirits in
process
Finished case 53,567,923 42,080,845 15,575,683
__________ __________ __________
goods
$249,383,577 $147,165,267 $109,006,179
___________ ___________ ___________
</TABLE>
3) PROPERTY, PLANT AND EQUIPMENT:
The major components of property, plant and equipment for
the Company are as follows:
<TABLE>
<CAPTION>
November 30, August 31,
____________ __________
1993 1993
____ ____
<S> <C> <C>
Land $11,676,195 $4,305,648
Buildings and 60,633,394 30,135,151
improvements
Machinery and 135,563,360 91,161,305
equipment
Motor vehicles 2,517,429 2,553,585
Construction 2,955,793 2,074,570
in progress
____________ ___________
$213,346,171 $130,230,259
Less (53,923,685) (51,629,978)_
accumulated
depreciation
_____________ ____________
$159,422,486 $78,600,281
____________ ___________
</TABLE>
4) VINTNERS ACQUISITION:
On October 15, 1993, the Company acquired substantially all
of the tangible and intangible assets of Vintners International
Company, Inc. ("Vintners") other than cash and the Hammondsport
Winery (the "Vintners Assets"), and assumed certain current
liabilities associated with the ongoing business, for an
aggregate purchase price of $148.9 million (the "Cash
Consideration"), subject to adjustment based upon the
determination of the Final Net Current Asset Amount (as defined
below), and paid $8,961,000 of direct acquisition and financing
costs. In addition, at closing the Company delivered options (the
"Options") to Vintners and Household Commercial of California,
Inc., one of Vintners' Lenders, to purchase an aggregate of
500,000 shares (the "Option Shares") of the Company's Class A
Common Stock, at an exercise price per share of $18.25, which are
exercisable at any time until October 15, 1996. These options
have been recorded at $8.42 per share, based upon an independent
appraisal and $4,210,000 has been reflected as a component of
additional paid-in-capital.
Vintners was the United States' fifth largest supplier of
wine with two of the country's most highly recognized brands,
Paul Masson and Taylor California Cellars. The Vintners' assets
include the Gonzales Winery in Gonzales, California; the Paul
Masson wineries in Madera and Soledad, California; and the
Hammondsport Winery in Hammondsport, New York which the Company
is leasing for a period of 18 months from the date of the
Vintners Acquisition.
The Cash Consideration was funded by the Company pursuant to
(i) approximately $12.6 million of Revolving Loans under the Credit
Facility of which $11.2 million funded the cash consideration and
$1.4 million funded the payment of direct aquisition costs; (ii) an
accrued liability of approximately $7.7 million for the holdback
described below and (iii) the $130.0 million Subordinated Bank
Loan. See "Description of Long-Term Debt" under Note 5.
At closing the Company held back from the Cash
Consideration approximately 10% of the then
estimated net current assets of Vintners purchased by the
Company, and deposited an additional $2.8 million of the Cash
Consideration into an escrow to be held until October 15, 1995.
If the amount of the net current assets as determined after the
closing (the "Final Net Current Asset Amount") is greater than
90% and less than 100% of the amount of net current assets
estimated at closing (the "Estimated Net Current Asset Amount"),
then the Company shall pay into the established escrow an amount
equal to the Final Net Current Asset Amount less 90% of the
Estimated Net Current Asset Amount. If the Final Net Current
Asset Amount is greater than the Estimated Net Current Asset
Amount, then, in addition to the payment described above, the
Company shall pay an amount equal to such excess, plus interest
from the closing, to Vintners. If the Final Net Current Asset
Amount is less than 90% of the Estimated Net Current Asset
Amount, then the Company shall be paid such deficiency out of the
escrow account.
The acquisition was accounted for using the purchase method;
accordingly, Vintners assets were recorded at fair market value
at the date of acquisition. The fair market value of the net
assets acquired approximated the aggregate purchase price. The
accompanying consolidated financial statements reflect the
results of operations of Vintners since October 15, 1993.
The following table presents unaudited pro forma results of
operations as if the Vintners acquisition occurred at the
beginning of the quarter ended 11/30/93 and as if the acquisitions
of both Vintners and Barton Incorporated ("Barton") occurred at the
beginning of the quarter ended 11/30/92, after giving effect to
certain adjustments for depreciation, amortization of intangibles,
interest expense on the acquisition debt and related income tax
effects. These pro forma results have been prepared for
comparative purposes only and do not purport to be indicative of
what would have occurred had the acquisitions been made at the
beginning of fiscal 1994 and 1993, respectively, or of results
which may occur in the future.
<TABLE>
<CAPTION>
Pro Forma
__________________________________________
November 30, 1993 November 30, 1992
_________________ _________________
<S> <C> <C>
Net Sales $171,747,000 $185,258,000
Income from 12,589,000 21,227,000
Operations
Net Income 4,147,000 9,899,000
Net Income per
Common and
Equivalent Shares:
Primary $0.30 $0.84
Fully Diluted $0.28 $0.70
Weighted Average
Shares Outstanding:
Primary 14,033,381 11,759,996
Fully Diluted 16,252,297 15,053,081
</TABLE>
5) LONG-TERM DEBT:
Long-term debt consists of the following at November 30,
1993:
<TABLE>
<CAPTION>
CURRENT LONG-TERM TOTAL
_______ _________ _____
<S> <C> <C> <C>
Credit Facilities
_________________
SENIOR CREDIT
FACILITY:
Term loan, $6,000,000 $44,000,000 $50,000,000
variable rate,
original proceeds
$50,000,000 due in
installments
through fiscal
1999
SUBORDINATED BANK
LOAN:
Term Loan, - 130,000,000 130,000,000
graduating rate at
9.25% at November
30, 1993, matures
in 2003
Capitalized Lease
_________________
Agreements
__________
Capitalized 313,868 327,535 641,403
equipment leases
at interest rates
ranging from 8.9%
to 18%, due in
monthly
installments
through fiscal
1997
INDUSTRIAL
DEVELOPMENT
AGENCIES:
7 1/4% 1975 issue, 100,000 - 100,000
original proceeds
$2,000,000, due in
annual
installments of
$100,000 through
fiscal 1994
7 1/2% 1980 issue, 118,500 592,500 711,000
original proceeds
$2,370,000, due in
annual
installments of
$118,500 through
fiscal 1999
Other Long-Term
_______________
Debt
____
Loans payable - 5% - 966,973 966,973
secured by cash
surrender value of
officer's life
insurance policies
Notes payable at 5,239,000 3,000,000 8,239,000
1% below prime
rate to prime
rate, due in
yearly
installments
through fiscal
1995
Promissory note at 320,000 320,000 640,000
prime rate due in
equal yearly
installments
through September
30, 1995 __________ ___________ __________
$12,091,368 $179,207,008 $191,298,376
___________ ____________ ____________
</TABLE>
DESCRIPTION OF LONG-TERM DEBT
SENIOR CREDIT FACILITY
On October 15, 1993 the Company amended the Senior Credit
Facility (the "Credit Facility") in connection with the
acquisition of substantially and of the assets of Vintners.
The Credit Facility consists of: (i) a $50.0 million Term
Loan; (ii) Revolving Loans in an aggregate principal amount,
together with the aggregate amount of all undrawn or drawn
letters of credit ("Revolving Letters of Credit"), not to exceed
$95.0 million; and (iii) a standby irrevocable letter of credit of
$28.2 million. The Banks have been given security interests in
substantially all of the assets of the Company and its
subsidiaries and each of the Company's principal operating
subsidiaries has guaranteed, jointly and severally, the Company's
obligations under the Credit Facility.
The Revolving Loans and the Term Loan, at the Company's
option, can be either a Base Rate Loan or a Eurodollar Loan. A
Base Rate Loan bears interest at the rate per annum equal to (i)
the higher of (1) Federal Funds Rate for such day plus 1/2 of 1%,
or (2) the Chase Bank prime commercial lending rate, plus (ii)
0.375% (subject to adjustment). A Eurodollar Loan bears interest
at London Interbank Offered Rate plus 1.625% (subject to
adjustment).
As of November 30, 1993, the $50.0 million Term Loan was
outstanding, which was a Eurodollar Loan that bears interest at
4.95% per annum. As of November 30, 1993, $70.5 million was
outstanding under the Revolving Loans and $21.5 million was
available to be drawn down by the Company. The Revolving Loans
are required to be prepaid in such amounts that the aggregate
amount of Revolving Loans outstanding, together with the drawn
and undrawn Revolving Letters of Credit, will not exceed the
Borrowing Base. The Borrowing Base means the sum of 70% of the
amount of certain eligible receivables plus 40% of the value of
certain eligible inventory. In addition, the Revolving Loans are
required to be prepaid in such amounts that, for a period of 30
consecutive days during the last two fiscal quarters of each
fiscal year, the aggregate amount of Revolving Loans outstanding,
together with drawn and undrawn Revolving Letters of Credit, will
not exceed $35.0 million. The Revolving Loans mature on June 15,
1999.
The Company is subject to certain restrictive covenants
including those relating to additional liens, additional
indebtedness, the sale of assets, the payment of dividends,
transactions with affiliates, certain investments and certain
other fundamental changes and making capital expenditures that
exceed specified levels. The Company is also required to
maintain the following financial covenants above specified
levels: indebtedness to tangible net worth; tangible net worth;
fixed charges ratio; operating cash flow to interest expense; and
current ratio.
The Company is required to maintain in effect until June 29,
1995 interest rate swap, cap or collar agreements or other
similar arrangements (each, an "Interest Rate Protection
Agreement") which protect the Company against three-month London
Interbank Offered Rates exceeding 7.5% per annum in an amount at
least equal to $25.0 million.
SUBORDINATED BANK LOAN
The Company borrowed $130.0 million under a Subordinated
Bank Loan Agreement provided in connection with the Vintners
Acquisition (the "Subordinated Bank Loan") pursuant to an
agreement among the Company, its principal operating subsidiaries
and the banks identified therein. On December 27, 1993 the
Company repaid the Subordinated Bank Loan from the proceeds of
the Senior Subordinated Notes (See Note 7 "Subsequent Events -
Issuance of Senior Subordinated Notes") together with borrowings
under the Revolving Loans. As of November 30,
1993 the interest rate on the Subordinated Bank Loan was 9.25%
per annum.
CONVERTIBLE SUBORDINATED DEBENTURES
On October 18, 1993, the Company called its Convertible
Debentures for redemption on November 19, 1993 at a redemption
price of 102.1% plus accrued interest. During the period
September 1, 1993 through November 19, 1993, debentures in an
aggregate principal amount of $58,960,000 were converted to
3,235,882 shares of the Company's Class A Common Stock at a price
of $18.22 per share. An aggregate principal amount of
approximately $63,000 was redeemed. Interest was accrued on the
debentures until the date of conversion but was forfeited by the
bondholders upon conversion. Accrued interest in an amount of
approximately $1,370,000 was recorded as an addition to
additional paid-in-capital.
At the redemption date, the capitalized debenture issuance
costs of approximately $2,246,000 net of accumulated amortization
of approximately $677,000 were recorded as a reduction of
additional paid-in-capital.
6. COMMITMENTS AND CONTINGENCIES:
In connection with the acquisition of Vintners, the Company
has assumed Vintners' purchase and crush contracts with certain
growers and suppliers. Under the grape purchase contracts, the
Company is committed to purchase all grape production yielded
from a specified number of acres for a period of time ranging up
to five years. The actual tonnage of grapes that must be
purchased by the Company will vary each year depending on certain
factors, including weather, time of harvest, and the agricultural
practices and location of the growers and suppliers under
contract.
The grapes purchased under these contracts are generally
priced at market value as determined by either the prior year's
(or an average of the three most recent prior years) Grape Crop
Report issued by the California Department of Food and
Agriculture or on prices as reported by the Federal State Market
News Service. Some contracts include a minimum
base price per ton that the Company must pay. The Company
purchased $364,600 of grapes under these contracts during the
period October 15, 1993 through November 30, 1993. Based on
current and anticipated future yields and prices, the Company
estimates that purchases in the following amounts will be
required under these contracts during the remainder of fiscal
1994 and for the subsequent four fiscal years:
Remainder of 1994 $8,099,400
Year 1995 $26,648,000
Year 1996 $18,179,000
Year 1997 $5,665,000
Year 1998 $1,895,000
For contracts extending beyond 1998, it is not feasible to
estimate the amounts to be paid. However, none of the contracts
with terms extending beyond 1998 are at prices in excess of
market value, as defined above, and all of the contracts
extending beyond 1998 are for quantities and varieties less than
the anticipated future requirements of the business.
The Company has assumed Vintners' grape crush contract
obligations with another winery under which the Company is
obligated to pay $600,000 for crushing and processing of a
specified tonnage at a fixed price per ton during fiscal 1995.
The Company has also assumed the lease obligations of
Vintners, including the lease obligation with the owner of
certain warehouse facilities no longer used by the Company.
Under the terms of the agreement, the Company's lease obligation
is reduced by the amount of rentals received from a new lessee of
the facilities. The Company has accrued the estimated lease
obligations in excess of the amount of rentals to be received
from the new lessee.
At November 30, 1993, aggregate minimum rental commitments
under various non cancelable operating lease agreements assumed
from Vintners for the remainder of fiscal 1994 and thereafter are
as follows:
Remainder of 1994 $623,937
Year 1995 132,300
Year 1996 89,498
Year 1997 77,518
Year 1998 75,505
Thereafter 75,505
7. SUBSEQUENT EVENTS - ISSUANCE OF SENIOR SUBORDINATED NOTES
On December 27, 1993 the Company issued $130,000,000 of
unsecured Senior Subordinated Notes (the "Notes") due 2003 at a
rate of 8.75% per annum. The net proceeds from the sale of the Notes,
together with additional borrowings under the
Revolving Loans, were used to repay in full the Subordinated Bank
Loan (as described in the Long-Term Debt footnote) incurred to
finance the Vintners Acquisition. Interest on the Notes will be
payable semiannually on June 15 and December 15 of each year.
The Notes are redeemable at the option of the Company, in whole
or in part, or or after December 15, 1998. The Notes are
unsecured and subordinated to the prior payment in full of all
senior indebtedness of the Company, which includes the Credit
Facility and, the Notes are guaranteed, on a senior subordinated
basis, by substantially all of the Company's operating subsidiaries.
The indenture relating to the Notes contains certain
covenants, including, but not limited to, (i) limitation on
indebtedness; (ii) limitation on restricted payments; (ii)
limitation on transactions with affiliates; (iv) limitation on
senior subordinated indebtedness; (v) limitation on liens; (vi)
limitation on sale of assets; (vii) limitation on issuances of
guarantees of and pledges for indebtedness; (viii) restriction on
transfer of assets; (ix) limitation on subsidiary capital stock;
(x) limitation on the creation of any restriction on the ability
of the Company's subsidiaries to make distributions and other
payments; and (xi) restrictions on mergers, consolidations and
the transfer of all or substantially all of the assets of the
Company to another person. The limitation on indebtedness
covenant is governed by a rolling four quarter fixed charge
coverage ratio.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS OF THE COMPANY
The Company has realized significant growth in sales and
profitability over the last two fiscal years primarily as a
result of acquisitions. The Company acquired substantially all
of the assets of Guild Wineries and Distilleries on October 1,
1991, all of the outstanding capital stock of Barton Incorporated
("Barton") on June 29, 1993 ("Barton Acquisition") and
substantially all of the assets of Vintners International
Company, Inc. ("Vintners") on October 15, 1993 ("Vintners
Acquisition"). Management expects the Barton Acquisition and
Vintners Acquisition to have a substantial impact on future
results of the Company's operations. The Company's results of
operations for the quarter ended November 30, 1993 include the
results of operations of Barton for the complete period and
include the results of the operations of Vintners' assets from
October 15, 1993, the date of the Vintners Acquisition.
The following table sets forth, for the periods indicated,
certain items in the Company's consolidated statements of income
expressed as percentage of net sales:
QUARTER ENDED
NOVEMBER 30,
1993 1992
Net sales . . . . . . . . . . . . . . 100.0% 100.0%
Cost of product sold . . . . . . . . 71.1 69.7
_____ _____
Gross profit . . . . . . . . . . . 28.9 30.3
Selling, general and administrative expenses 20.5 20.1
_____ _____
Operating income . . . . . . . . . 8.4 10.2
Interest expense, net . . . . . . . . 2.5 2.0
_____ _____
Income before provision for income taxes 5.9 8.2
Provision for federal and state income taxes 2.2 3.1
_____ _____
Net income . . . . . . . . . . . . 3.7% 5.1%
_____ _____
First Quarter Ended November 30, 1993 ("First Quarter 1994")
Compared to First Quarter Ended November 30, 1992 ("First Quarter
1993")
NET SALES
Net sales for the Company's First Quarter 1994 increased to
$154.5 million from $71.1 million for First Quarter 1993, an
increase of $83.4 million, or approximately 117%. This increase
resulted from the inclusion of $66.3 million of Barton's net
sales during First Quarter 1994 and $22.2 million of net sales of
Vintners' products from October 15, 1993, the date of the
Vintners' Acquisition.
WINE
Net sales and unit volume of the Company's branded wine
products declined 6.4% and 9.7%, respectively, as compared to the
same period a year ago. Net sales of the Company's branded
products declined less than unit volume due to higher prices of
certain brands and a favorable change in product mix. This
decrease was principally a result of a decline in net sales and
unit volume of the Company's dessert wine brands, and lower sales
of branded wine products acquired from Vintners due to a
reduction in shipments during the first two week transitional
period after the Vintners Acquisition.
Net sales and unit volume of the Company's varietal table
wine brands for First Quarter 1994 increased 16.2% and 19.3%,
respectively, reflecting increases in sales of most of the
Company's varietal table wine brands as compared to the same
period a year ago. Net sales and unit volume of the Company's
generic table wine brands for the same period were down 11.3%
and 10.9%, respectively, principally due to a reduction in
shipments of generic table wine brands acquired from Vintners
during the first two-week transition period after the Vintners
Acquisition. Net sales and unit volume of sparkling wine brands
were up 2.3% and essentially flat, respectively. Net sales and
unit volume of the Company's dessert wine brands were down
approximately 22.7% and 23.4%, respectively, in First Quarter
1994 versus the same period a year ago. The Company's net sales
and unit volume of dessert wine brands have declined over the
last three years. These declines can be attributed to a general
decline in dessert wine consumption in the United States. During
First Quarter 1994, net sales of branded dessert wines
constituted less than 10% of the Company's overall net sales.
For purposes of computing the comparative data for the
Company's branded wine products set forth above, sales of branded
wine products acquired from Vintners have been included in First
Quarter 1994 from October 15, 1993 (the date of the Vintners
Acquisition) through November 30, 1993, and for the same period
during First Quarter 1993 prior to the Vintners Acquisition.
IMPORTED BEER
Net sales and unit volume of the Company's beer brands for
First Quarter 1994 increased by approximately 16.5% and 13.3%,
respectively, when compared to Barton's net sales and unit volume
for the same period a year ago, which was prior to the Barton
Acquisition. These increases resulted primarily from increased
sales of the Company's Corona Extra brand and other Mexican beer
brands, and increased sales of its St. Pauli Girl brand. The
Company's agreement to distribute Corona Extra and its other
Mexican beer brands expires in December 1994. The Company has
commenced negotiations to renew this contract and expects to
enter into a new contract in 1994. The failure to renew this
agreement would have a material adverse impact on the Company's
business.
SPIRITS
Net sales and unit volume of the Company's spirits case
goods for First Quarter 1994 were down 2.6% and up slightly,
respectively, as compared to Barton's net sales and unit volume
for the same period a year ago. This decrease in net sales was
primarily due to lower net sales of the Company's aged whiskey
brands, which was offset in large part by increased net sales of
the Company's liqueur brands. The Company also had increased net
sales of its vodka and tequila brands.
GROSS PROFIT
Gross profit increased to $44.7 million in First Quarter
1994 from $21.5 million in First Quarter 1993, an increase of
$23.2 million, or 107%. This increase in gross profit resulted
from the inclusion of Barton's and Vintners' operations into the
Company's. Gross profit as a percentage of net sales decreased
to 28.9% in First Quarter 1994 from 30.3% in First Quarter 1993.
The Company's gross margin decreased primarily as a result of the
inclusion of Barton's and Vintners' operations into the Company.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased to
$31.6 million in First Quarter 1994 from $14.3 million in First
Quarter 1993, an increase of $17.3 million, or 121%. This
increase resulted from the inclusion of Barton's and Vintners'
selling, general and administrative expenses into the Company's
and higher advertising and promotional spending on brands of the
Company owned prior to the Barton and Vintners Acquisitions.
INTEREST EXPENSE, NET
Interest expense, net increased to $3.8 million in First
Quarter 1994 from $1.4 million First Quarter 1993, an increase of
$2.4 million. This increase principally resulted from financing
activities related to the Vintners Acquisition and Barton
Acquisition.
NET INCOME
Net income increased to $5.7 million in First Quarter 1994
from $3.6 million in First Quarter 1993, an increase of $2.1
million, or 57%. This increase resulted primarily from the
inclusion of the operations of Barton and Vintners into the
Company's.
FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
The Company's principal use of cash in its operating
activities is for purchasing and carrying inventory of raw
materials and finished goods. The Company's primary source of
liquidity has historically been cash flow from operations, except
during the annual fall grape harvest when the Company has relied
on short-term borrowings. The annual grape crush normally begins
in August and runs through November. The Company generally
begins purchasing grapes in August with payments for such grapes
beginning to come due in September. The Company's short-term
borrowings to support such purchases generally reach their
highest levels in November or December. Historically, the
Company has used cash flow from operations to repay its short-
term borrowings. The Company believes that as a result of the
Vintners Acquisition, and to a lesser extent, the Barton
Acquisition, it will have increased short-term borrowing needs.
A description of the Company's credit facility and other
indebtedness is provided in Note 5 to the Company's financial
statements in Part 1 of this report.
WORKING CAPITAL REQUIREMENTS
As of November 30, 1993 the Company's Current Assets and
Liabilities increased from August 31, 1993 due in large part to
the Vintners Acquisition. Net of the effect of the Vintners
Acquisition, Current Assets increased principally as a result of
normal seasonal trends and an increase in inventory due primarily
to the purchase of grapes from the 1993 harvest. Current
Liabilities similarly increased due primarily to an increase in
short-term borrowings to fund grape purchases and accounts
payable from the 1993 harvest. As of November 30, 1993, $70.5
million was outstanding under the revolving loans under the
Company's credit facility and $21.5 million was available to be
drawn down by the Company.
As part of the consideration for Barton, the Company agreed
to make payments to the former stockholders of Barton ("Barton
Stockholders") of up to an aggregate of $57.3 million which are
payable to the Barton Stockholders over a three-year period upon
the satisfaction of certain performance goals. The first payment
of $4.0 million was paid to the Barton Stockholders on December
31, 1993. The remaining payments are as follows: up to $28.3
million is to be made on December 30, 1994; up to $10.0 million
is to be made on November 30, 1995; and up to $15.0 million is to
be made on November 29, 1996. Such payment obligations are
secured in part by a $28.2 million letter of credit issued under
the Company's credit facility and are subject to acceleration in
certain events.
As part of the acquisition of Vintners, the Company held
back from the Cash Consideration approximately 10% of the then
estimated net current assets of Vintners purchased by the Company.
Final determination of the net current asset amount is expected to
occur prior to the end of the Company's 1994 fiscal year. If the
finally determined net current asset amount exceeds the closing
estimate, $8.4 million plus such excess will be paid by the Company.
If the finally determined net current asset amount is less than
the closing estimate, $8.4 million minus the deficiency will be paid
by the Company. See Note 5 to the Company's financial
statements in Part 1 of this report. The Company expects that the
amount to be paid will not exceed $7.7 million. Such amount will
be depositied into an escrow account established to reimburse the
Company for any indemnification claims arising out of the Vintners
Acquisition.
Other major payments expected during fiscal 1994 include a
$5.1 million cash payment to Hiram Walker & Sons, Inc. for the
extension of licenses to use the Ten High, Crystal Palace and
certain other spirits brands. Capital expenditures for property,
plant and equipment during fiscal 1994 are not expected to vary
materially from amounts expended in fiscal 1993.
The Company believes that cash flow from operations will
provide sufficient funds to meet all of its anticipated short and
long-term debt service obligations and the major cash
requirements described above. The Company is not aware of any
potential impairment to its liquidity and believes that the
revolving loans available under its credit facility and cash flow
from operations will provide adequate resources to satisfy its
working capital, liquidity and anticipated capital expenditure
requirements for at least the next four fiscal quarters.
FINANCING ACTIVITIES
During the quarter ended November 30, 1993, the Company
completed the acquisition of Vintners. The cash portion of the
purchase price was funded by revolving loans associated with the
1993 harvest and a $130 million subordinated bank loan (the
"Subordinated Bank Loan"). On December 27, 1993, the public
offering and sale of the Company's 8.75% Senior Subordinated
Notes (the "Notes") was completed, the proceeds of which,
together with additional borrowings under the Company's credit
facility, were used to repay in full the Subordinated Bank Loan.
A description of the Notes is set forth in Note 7 to the
Company's financial statements in Part 1 of this report. Such
description is qualified in its entirety by reference to the
complete text of the Indenture covering the Notes, a copy of which
is filed with this report.
In addition, the Company called its 7% Convertible
Subordinated Debentures Due 2011 for redemption on November 19,
1993. Prior to such redemption substantially all of the
convertible debentures were converted into shares of the
Company's Class A Common Stock.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Index to Exhibits located on Page of this
_____
Report.
(b) The following Current Reports on Form 8-K and Form 8-
K/A were filed with the Securities and Exchange
Commission during the quarter ended November 30, 1993:
1. Form 8-K dated September 15, 1993. This Form 8-K
reported information under Item 5 (Other Events).
2. Form 8-K dated October 15, 1993. This Form 8-K
reported information under Item 2 (Acquisition or
Disposition of Assets), Item 5 (Other Events) and
Item 7 (Financial Statements, Pro Forma Financial
Information and Exhibits). The following
financial statements were filed with this Form 8-
K:
The balance sheets of Vintners International
Company, Inc. as of July 31, 1993 and 1992, the
related statements of operations, stockholders'
equity (net capital deficiency), and cash flows
for each of the three years in the period ended
July 31, 1993, and the report of Ernst & Young,
independent auditors, thereon, together with the
notes thereto.
3. Form 8-K/A dated October 15, 1993 (Amendment No.
1). This Form 8-K/A amended the Form 8-K dated
October 15, 1993 and reported information under
Item 7 (Financial Statements, Pro Forma Financial
Information and Exhibits). The following
financial statements were filed with this Form 8-
K/A:
The balance sheets of Vintners International
Company, Inc. as of July 31, 1993 and 1992, the
related statements of operations, stockholders'
equity (net capital deficiency), and cash flows
for each of the three years in the period ended
July 31, 1993, and the report of Ernst & Young,
independent auditors, thereon, together with the
notes thereto.
Unaudited Pro Forma Condensed Consolidated Balance
Sheet as of May 31, 1993 and the notes thereto and
unaudited Pro Forma Condensed Consolidated
Statements of Income for the year ended August 31,
1992 and the nine months ended May 31, 1993 and
the notes thereto.
In addition to the above-referenced Current Reports on
Form 8-K and Form 8-K/A, during December 1993 the Company
filed Form 8-K/A dated October 15, 1993 (Amendment No. 2).
This Form 8-K/A amended the Form 8-K dated October 15, 1993
and reported information under Item 7 (Financial Statements,
Pro Forma Financial Information and Exhibits). This Form 8-
K/A did not amend any financial statements previously filed;
the sole purpose for filing this Form 8-K/A was to include a
Consent of Ernst & Young, Independent Auditors.
<PAGE>
INDEX TO EXHIBITS
(2) Plan of acquisition, reorganization, arrangement,
liquidation or succession.
(a) Asset Sale Agreement between Vintners International
Company, Inc. and Canandaigua Wine Company, Inc. dated
September 14, 1993 (including a list briefly
identifying the contents of all omitted exhibits and
schedules thereto), is incorporated herein by reference
to Exhibit 2(a) to the Company's Current Report on Form
8-K, dated October 15, 1993.
(b) Amendment dated as of October 14, 1993 to Asset Sale
Agreement dated as of September 14, 1993 by and between
Vintners International Company, Inc. and Canandaigua
Wine Company, Inc., is incorporated herein by reference
to Exhibit 2(b) to the Company's Current Report on Form
8-K, dated October 15, 1993.
(c) Amendment No. 1 dated as of October 15, 1993 to
Amendment and Restatement dated as of June 29, 1993
among Canandaigua Wine Company, Inc., its Subsidiaries
and certain banks for which The Chase Manhattan Bank
(National Association) acts as agent (including a list
briefly identifying the contents of all omitted
exhibits and schedules thereto), is incorporated herein
by reference to Exhibit 2(c) to the Company's Current
Report on Form 8-K, dated October 15, 1993.
(d) Senior Subordinated Loan Agreement dated as of October
15, 1993 among Canandaigua Wine Company, Inc., its
Subsidiaries and certain banks for which The Chase
Manhattan Bank (National Association) acts as agent
(including a list briefly identifying the contents of
all omitted exhibits and schedules thereto), is
incorporated herein by reference to Exhibit 2(d) to the
Companys' Current Report on Form 8-K, dated October 15,
1993.
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES.
(a) Indenture dated as of December 27, 1993 among
Canandaigua Wine Company, Inc., its Subsidiaries and
Chemical Bank is included herein as Exhibit 4.1 at page
___ of this Report.
(10) Material Contracts
(a) The Canandaigua Wine Company, Inc. Stock Option and
Stock Appreciation Right Plan (filed as Appendix B of
the Canandaigua Wine Company, Inc. Definitive Proxy
Statement dated December 23, 1987 and incorporated
herein by reference).
(b) Amendment No. 1 to the Canandaigua Wine Company, Inc.
Stock Option and Stock Appreciation Right Plan (filed
as Exhibit 10.1 to the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1992 and
incorporated herein by reference).
(c) Amendment No. 2 to the Canandaigua Wine Company, Inc.
Stock Option and Stock Appreciation Right Plan (filed
as Exhibit 28 to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended November 30, 1992 and
incorporated herein by reference).
(d) Amendment No. 3 to the Canandaigua Wine Company, Inc.
Stock Option and Stock Appreciation Right Plan (filed
as Exhibit 10.4 to the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1993 and
incorporated herein by reference).
(e) Amendment No. 4 to the Canandaigua Wine Company, Inc.
Stock Option and Stock Appreciation Right Plan is set
forth in Exhibit 10.1 on page of this Report.
___
(f) Employment Agreement between Barton Incorporated and
Ellis M. Goodman dated as of October 1, 1991 as amended
by Amendment to Employment Agreement between Barton
Incorporated and Ellis M. Goodman dated as of June 29,
1993 (filed as Exhibit 10.5 to the Company's Annual
Report on Form 10-K for the fiscal year ended August
31, 1993 and incorporated herein by reference).
(g) Barton Incorporated Management Incentive Plan (filed as
Exhibit 10.6 to the Company's Annual Report on Form 10-
K for the fiscal year ended August 31, 1993 and
incorporated herein by reference).
(h) Ellis M. Goodman Split Dollar Insurance Agreement
(filed as Exhibit 10.7 to the Company's Annual Report
on Form 10-K for the fiscal year ended August 31, 1993
and incorporated herein by reference).
(i) Barton Brands, Ltd. Deferred Compensation Plan (filed
as Exhibit 10.8 to the Company's Annual Report on Form
10-K for the fiscal year ended August 31, 1993 and
incorporated herein by reference).
(j) Marvin Sands Split Dollar Insurance Agreement (filed as
Exhibit 10.9 to the Company's Annual Report on Form 10-
K for the fiscal year ended August 31, 1993 and
incorporated herein by reference).
(k) Amendment and Restatement dated as of June 29, 1993 of
Credit Agreement among Canandaigua Wine Company Inc.,
its Subsidiaries and certain banks for which The Chase
Manhattan Bank (National Association) acts as agent
(filed as Exhibit 2(b) to the Company's Current Report
on Form 8-K dated June 29, 1993 and incorporated herein
by reference).
(l) Amendment No. 1 dated as of October 15, 1993 to
Amendment and Restatement dated as of June 29, 1993 of
Credit Agreement among Canandaigua Wine Company, Inc.,
its Subsidiaries and certain banks for which The Chase
Manhattan Bank (National Association) acts as agent
(filed as Exhibit 2(c) to the Company's Current Report
on Form 8-K dated October 15, 1993 and incorporated
herein by reference).
(m) Senior Subordinated Loan Agreement dated as of October
15, 1993 among Canandaigua Wine Company, Inc., its
Subsidiaries and certain banks for which The Chase
Manhattan Bank (National Association) acts as Agent
(filed as Exhibit 2(d) to the Company's Current Report
on Form 8-K dated October 15, 1993 and incorporated
herein by reference).
(11) Statement re computation of per share earnings.
Computation of per share earnings is set forth in Exhibit 11
on page of this Report.
___
(15) Letter re unaudited interim financial information.
Not applicable.
(18) Letter re change in accounting principles.
Not applicable.
(19) Report furnished to security holders.
Not applicable.
(22) PUBLISHED REPORT REGARDING MATTERS SUBMITTED TO A VOTE
OF SECURITY HOLDERS.
Not applicable.
(23) Consents of experts and counsel.
Not applicable.
(24) Power of Attorney.
Not applicable.
(27) Financial Data Schedule.
Not applicable.
(99) Additional Exhibits.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CANANDAIGUA WINE COMPANY, INC.
Dated: January 13, 1994 By: s/Richard Sands
________________________________
Richard Sands, President and
Chief Executive Officer
Dated: January 13, 1994 By: s/Lynn K. Fetterman
___________________________________
Lynn K. Fetterman, Senior Vice President, Chief
Financial Officer and Secretary (Principal
Financial Officer and Principal Accounting
Officer)
SUBSIDIARIES
Batavia Wine Cellars, Inc.
Dated: January 13, 1994 By: s/Richard Sands
____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Lynn K. Fetterman
_____________________________________
Lynn K. Fetterman, Secretary and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
Bisceglia Brothers Wine Co.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Lynn K. Fetterman
_____________________________________
Lynn K. Fetterman, Secretary (Principal
Financial Officer and Principal Accounting
Officer)
California Products Company
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Lynn K. Fetterman
_____________________________________
Lynn K. Fetterman, Secretary (Principal
Financial Officer and Principal Accounting
Officer)
Guild Wineries & Distilleries, Inc.
Dated: January 13, 1994 By: s/Chris Kalabokes
_____________________________________
Chris Kalabokes, Chief Executive Officer
Dated: January 13, 1994 By: s/Lynn K. Fetterman
_____________________________________
Lynn K. Fetterman, Secretary and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
Tenner Brothers, Inc.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Lynn K. Fetterman
_____________________________________
Lynn K. Fetterman, Secretary (Principal
Financial Officer and Principal Accounting
Officer)
Widmer's Wine Cellars, Inc.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Lynn K. Fetterman
_____________________________________
Lynn K. Fetterman, Secretary (Principal
Financial Officer and Principal Accounting
Officer)
Barton Incorporated
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Raymond E. Powers
_____________________________________
Raymond E. Powers, Vice President (Principal
Financial Officer and Principal Accounting
Officer)
Barton Brands, Ltd.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Raymond E. Powers
_____________________________________
Raymond E. Powers, Senior Vice President-
Finance (Principal Financial Officer and
Principal Accounting Officer)
Barton Beers, Ltd.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Norman R. Goldstein
_____________________________________
Norman R. Goldstein, Treasurer (Principal
Financial Officer and Principal Accounting
Officer)
Barton Brands of California, Inc.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Norman R. Goldstein
_____________________________________
Norman R. Goldstein, Treasurer (Principal
Financial Officer and Principal Accounting
Officer)
Barton Brands of Georgia, Inc.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Norman R. Goldstein
_____________________________________
Norman R. Goldstein, Treasurer (Principal
Financial Officer and Principal Accounting
Officer)
Barton Distillers Import Corp.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Norman R. Goldstein
_____________________________________
Norman R. Goldstein, Treasurer (Principal
Financial Officer and Principal Accounting
Officer)
Barton Financial Corporation
Dated: January 13, 1994 By: s/Norman R. Goldstein
_____________________________________
Norman R. Goldstein, President and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
Stevens Point Beverage Co.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Norman R. Goldstein
_____________________________________
Norman R. Goldstein, Treasurer (Principal
Financial Officer and Principal Accounting
Officer)
Monarch Wine Company, Limited Partnership
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President Barton
Management, Inc., General Partner
Dated: January 13, 1994 By: s/Norman R. Goldstein
_____________________________________
Norman R. Goldstein, Vice Presidnt and
Treasurer, Barton Management, Inc., General
Partner (Principal Financial Officer and
Principal Accounting Officer)
Barton Management, Inc.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, Vice President
Dated: January 13, 1994 By: s/Norman R. Goldstein
_____________________________________
Norman R. Goldstein, Vice President and
Treasurer (Principal Financial Officer and
Principal Accounting Officer)
Vintners International Company, Inc.
Dated: January 13, 1994 By: s/Richard Sands
_____________________________________
Richard Sands, President
Dated: January 13 , 1994 By: s/Lynn K. Fetterman
_____________________________________
Lynn K. Fetterman, Secretary and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
(2) Plan of acquisition, reorganization,
arrangement, liquidation or succession.
(a) Asset Sale Agreement between Vintners
International Company, Inc. and Canandaigua
Wine Company, Inc. dated September 14, 1993
(including a list briefly identifying the
contents of all omitted exhibits and schedules
thereto), is incorporated herein by reference
to Exhibit 2(a) to the Company's Current Report
on Form 8-K, dated October 15, 1993.
(b) Amendment dated as of October 14, 1993 to Asset
Sale Agreement dated as of September 14, 1993
by and between Vintners International Company,
Inc. and Canandaigua Wine Company, Inc., is
incorporated herein by reference to Exhibit
2(b) to the Company's Current Report on Form 8-
K, dated October 15, 1993.
(c) Amendment No. 1 dated as of October 15, 1993 to
Amendment and Restatement dated as of June 29,
1993 among Canandaigua Wine Company, Inc., its
Subsidiaries and certain banks for which The
Chase Manhattan Bank (National Association)
acts as agent (including a list briefly
identifying the contents of all omitted
exhibits and schedules thereto), is
incorporated herein by reference to Exhibit
2(c) to the Company's Current Report on Form 8-
K, dated October 15, 1993.
(d) Senior Subordinated Loan Agreement dated as of
October 15, 1993 among Canandaigua Wine
Company, Inc., its Subsidiaries and certain
banks for which The Chase Manhattan Bank
(National Association) acts as agent (including
a list briefly identifying the contents of all
omitted exhibits and schedules thereto), is
incorporated herein by reference to Exhibit
2(d) to the Companys' Current Report on Form 8-
K, dated October 15, 1993.
(4) Instruments defining the rights of security
holders, including indentures.
(a) Indenture dated as of December 27, 1993 among
Canandaigua Wine Company, Inc., its
Subsidiaries and Chemical Bank is included
herein as Exhibit 4.1 at page ___ of this
Report.
(10) Material Contracts
(a) The Canandaigua Wine Company, Inc. Stock Option
and Stock Appreciation Right Plan (filed as
Appendix B of the Canandaigua Wine Company,
Inc. Definitive Proxy Statement dated December
23, 1987 and incorporated herein by reference).
(b) Amendment No. 1 to the Canandaigua Wine
Company, Inc. Stock Option and Stock
Appreciation Right Plan (filed as Exhibit 10.1
to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1992 and
incorporated herein by reference).
(c) Amendment No. 2 to the Canandaigua Wine
Company, Inc. Stock Option and Stock
Appreciation Right Plan (filed as Exhibit 28 to
the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended November 30, 1992 and
incorporated herein by reference).
(d) Amendment No. 3 to the Canandaigua Wine
Company, Inc. Stock Option and Stock
Appreciation Right Plan (filed as Exhibit 10.4
to the Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1993 and
incorporated herein by reference).
(e) Amendment No. 4 to the Canandaigua Wine
Company, Inc. Stock Option and Stock
Appreciation Right Plan is set forth in Exhibit
10.1 on page of this Report.
(f) Employment Agreement between Barton
Incorporated and Ellis M. Goodman dated as of
October 1, 1991 as amended by Amendment to
Employment Agreement between Barton
Incorporated and Ellis M. Goodman dated as of
June 29, 1993 (filed as Exhibit 10.5 to the
Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1993 and
incorporated herein by reference).
(g) Barton Incorporated Management Incentive Plan
(filed as Exhibit 10.6 to the Company's Annual
Report on Form 10-K for the fiscal year ended
August 31, 1993 and incorporated herein by
reference).
(h) Ellis M. Goodman Split Dollar Insurance
Agreement (filed as Exhibit 10.7 to the
Company's Annual Report on Form 10-K for the
fiscal year ended August 31, 1993 and
incorporated herein by reference).
(i) Barton Brands, Ltd. Deferred Compensation Plan
(filed as Exhibit 10.8 to the Company's Annual
Report on Form 10-K for the fiscal year ended
August 31, 1993 and incorporated herein by
reference).
(j) Marvin Sands Split Dollar Insurance Agreement
(filed as Exhibit 10.9 to the Company's Annual
Report on Form 10-K for the fiscal year ended
August 31, 1993 and incorporated herein by
reference).
(k) Amendment and Restatement dated as of June 29,
1993 of Credit Agreement among Canandaigua Wine
Company Inc., its Subsidiaries and certain
banks for which The Chase Manhattan Bank
(National Association) acts as agent (filed as
Exhibit 2(b) to the Company's Current Report on
Form 8-K dated June 29, 1993 and incorporated
herein by reference).
(l) Amendment No. 1 dated as of October 15, 1993 to
Amendment and Restatement dated as of June 29,
1993 of Credit Agreement among Canandaigua
Wine Company, Inc., its Subsidiaries and
certain banks for which The Chase Manhattan
Bank (National Association) acts as agent
(filed as Exhibit 2(c) to the Company's Current
Report on Form 8-K dated October 15, 1993 and
incorporated herein by reference).
(m) Senior Subordinated Loan Agreement dated as of
October 15, 1993 among Canandaigua Wine
Company, Inc., its Subsidiaries and certain
banks for which The Chase Manhattan Bank
(National Association) acts as Agent (filed as
Exhibit 2(d) to the Company's Current Report on
Form 8-K dated October 15, 1993 and
incorporated herein by reference).
(11) Statement re computation of per share earnings.
Computation of per share earnings is set forth in
Exhibit 11 on page ___ of this Report.
(15) Letter re unaudited interim financial
information.
Not applicable.
(18) Letter re change in accounting principles.
Not applicable.
(19) Report furnished to security holders.
Not applicable.
(22) Published report regarding matters submitted to
a vote of security holders.
Not applicable.
(23) Consents of experts and counsel.
Not applicable.
(24) Power of Attorney.
Not applicable.
(27) Financial Data Schedule.
Not applicable.
(99) Additional Exhibits.
Not applicable.
CANANDAIGUA WINE COMPANY, INC., as Issuer,
The Subsidiaries listed on the signature pages
hereto, as Guarantors
and
CHEMICAL BANK, as Trustee
----------------------------------------------
INDENTURE
Dated as of December 27, 1993
----------------------------------------------
$130,000,000
8 3/4% Senior Subordinated Notes due 2003
<PAGE>
TABLE OF CONTENTS
PAGE
PARTIES ............................................... 1
RECITALS .............................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 101. Definitions............................ 2
Acquired Indebtedness.................. 2
Affiliate.............................. 2
Asset Sale............................. 3
Average Life to Stated Maturity........ 3
Bankruptcy Law......................... 3
Barton Letter of Credit................ 3
Board of Directors..................... 4
Board Resolution....................... 4
Business Day........................... 4
Capital Lease Obligation............... 4
Capital Stock.......................... 4
Cash Equivalents....................... 4
Change of Control...................... 5
Code................................... 6
Commission............................. 6
Company................................ 6
Company Request or Company Order....... 6
Consolidated Fixed Charge
Coverage Ratio....................... 6
Consolidated Income Tax Expense........ 7
Consolidated Interest Expense.......... 7
Consolidated Net Income (Loss)......... 7
Consolidated Net Worth................. 8
Consolidated Non-cash Charges.......... 8
Consolidation.......................... 8
Note: This table of contents shall not, for any purpose, be
deemed to be a part of this Indenture.
PAGE
Corporate Trust Office................. 8
Credit Agreement....................... 8
Default................................ 9
Designated Senior Guarantor
Indebtedness......................... 9
Designated Senior Indebtedness......... 9
Event of Default....................... 9
Exchange Act........................... 9
Fair Market Value...................... 9
Generally Accepted Accounting
Principles or GAAP................... 10
Guarantee.............................. 10
Guaranteed Debt........................ 10
Guarantor.............................. 10
Holder................................. 10
Indebtedness........................... 10
Indenture Obligations.................. 11
Interest Payment Date.................. 12
Interest Rate Agreements............... 12
Investments............................ 12
Lien................................... 12
Maturity............................... 12
Moody's................................ 12
Net Cash Proceeds...................... 12
Non-payment Default.................... 13
Officers' Certificate.................. 13
Opinion of Counsel..................... 13
Opinion of Independent
Counsel.............................. 14
Outstanding............................ 14
Pari Passu Indebtedness................ 15
Paying Agent........................... 15
Payment Default........................ 15
Permitted Guarantor Junior Securities.. 15
Permitted Holders...................... 15
Permitted Investment................... 16
Permitted Junior Securities............ 16
Person................................. 16
Predecessor Security................... 16
PAGE
Preferred Stock........................ 17
Qualified Capital Stock................ 17
Redeemable Capital Stock............... 17
Redemption Date........................ 17
Redemption Price....................... 17
Regular Record Date.................... 17
Responsible Officer.................... 17
Restricted Payment..................... 17
S&P.................................... 17
Sale and Leaseback
Transaction.......................... 18
Securities Act......................... 18
Security Register and
Security Registrar................... 18
Senior Guarantor Indebtedness.......... 18
Senior Indebtedness.................... 19
Special Record Date.................... 19
Stated Maturity........................ 20
Subordinated Indebtedness.............. 20
Subsidiary............................. 20
Temporary Cash Investments............. 20
Trust Indenture Act.................... 20
Trustee................................ 20
Voting Stock........................... 21
Wholly Owned Subsidiary................ 21
Section 102. Other Definitions...................... 21
Section 103. Compliance Certificates and Opinions... 22
Section 104. Form of Documents Delivered to
Trustee.............................. 22
Section 105. Acts of Holders........................ 23
Section 106. Notices, etc., to Trustee, the Company
and any Guarantor.................... 25
Section 107. Notice to Holders; Waiver.............. 25
Section 108. Conflict with Trust Indenture Act...... 26
Section 109. Effect of Headings and Table of
Contents............................. 26
Section 110. Successors and Assigns................. 26
Section 111. Separability Clause.................... 26
Section 1l2. Benefits of Indenture.................. 26
Section 113. GOVERNING LAW.......................... 27
Section 114. Legal Holidays......................... 27
Section 115. Schedules and Exhibits................. 27
Section 116. Counterparts........................... 27
PAGE
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally........................ 27
Section 202. Form of Face of Security............... 28
Section 203. Form of Reverse of Securities.......... 30
Section 204. Form of Trustee's Certificate of
Authentication....................... 33
Section 205. Form of Guarantee of Each of the
Guarantors........................... 33
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms........................ 37
Section 302. Denominations.......................... 37
Section 303. Execution, Authentication, Delivery
and Dating........................... 38
Section 304. Temporary Securities................... 39
Section 305. Registration, Registration of Transfer
and Exchange......................... 40
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities........................... 41
Section 307. Payment of Interest; Interest Rights
Preserved............................ 42
Section 308. Persons Deemed Owners.................. 43
Section 309. Cancellation........................... 44
Section 310. Computation of Interest................ 44
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect
Defeasance or Covenant Defeasance.... 44
Section 402. Defeasance and Discharge............... 45
Section 403. Covenant Defeasance.................... 45
Section 404. Conditions to Defeasance or Covenant
Defeasance........................... 46
Section 405. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions....... 49
Section 406. Reinstatement.......................... 49
PAGE
ARTICLE FIVE
REMEDIES
Section 501. Events of Default...................... 50
Section 502. Acceleration of Maturity; Rescission
and Annulment........................ 53
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee........... 54
Section 504. Trustee May File Proofs of Claim....... 55
Section 505. Trustee May Enforce Claims without
Possession of Securities............. 56
Section 506. Application of Money Collected......... 56
Section 507. Limitation on Suits.................... 57
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and
Interest............................. 58
Section 509. Restoration of Rights and Remedies..... 58
Section 510. Rights and Remedies Cumulative......... 58
Section 511. Delay or Omission Not Waiver........... 58
Section 512. Control by Holders..................... 59
Section 513. Waiver of Past Defaults................ 59
Section 514. Undertaking for Costs.................. 59
Section 515. Waiver of Stay, Extension or Usury
Laws................................. 60
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults..................... 60
Section 602. Certain Rights of Trustee.............. 61
Section 603. Trustee Not Responsible for Recitals,
Dispositions of Securities or
Application of Proceeds Thereof...... 62
Section 604. Trustee and Agents May Hold
Securities; Collections; etc......... 63
Section 605. Money Held in Trust.................... 63
Section 606. Compensation and Indemnification
of Trustee and Its Prior Claim....... 63
Section 607. Conflicting Interests.................. 64
Section 608. Corporate Trustee Required;
Eligibility.......................... 64
Section 609. Resignation and Removal; Appointment
of Successor Trustee................. 65
Section 610. Acceptance of Appointment by
Successor............................ 66
PAGE
Section 611. Merger, Conversion, Amalgamation,
Consolidation or Succession to
Business............................. 67
Section 612. Preferential Collection of Claims
Against Company...................... 68
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders................. 68
Section 702. Disclosure of Names and
Addresses of Holders................. 69
Section 703. Reports by Trustee..................... 69
Section 704. Reports by Company and Guarantors...... 69
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 801. Company or any Guarantor May
Consolidate, etc.,
Only on Certain Terms............... 70
Section 802. Successor Substituted.................. 73
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements
without Consent of Holders........... 73
Section 902. Supplemental Indentures and Agreements
with Consent of Holders.............. 74
Section 903. Execution of Supplemental Indentures
and Agreements....................... 76
Section 904. Effect of Supplemental Indentures...... 76
Section 905. Conformity with Trust Indenture Act.... 76
Section 906. Reference in Securities to
Supplemental Indentures.............. 76
Section 907. Effect on Senior Indebtedness.......... 77
PAGE
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and
Interest............................. 77
Section 1002. Maintenance of Office or Agency........ 77
Section 1003. Money for Security Payments to Be
Held in Trust........................ 78
Section 1004. Corporate Existence.................... 79
Section 1005. Payment of Taxes and Other Claims...... 80
Section 1006. Maintenance of Properties.............. 80
Section 1007. Insurance.............................. 81
Section 1008. Limitation on Indebtedness............. 81
Section 1009. Limitation on Restricted Payments...... 84
Section 1010. Limitation on Transactions with
Affiliates........................... 87
Section 1011. Limitation on Senior Subordinated
Indebtedness......................... 87
Section 1012. Limitation on Liens.................... 88
Section 1013. Limitation on Sale of Assets........... 89
Section 1014. Limitation on Issuances of Guarantees
of and Pledges for Indebtedness...... 94
Section 1015. Restriction on Transfer of Assets...... 96
Section 1016. Purchase of Securities upon a Change
of Control........................... 96
Section 1017. Limitation on Subsidiary Capital.......
Stock................................ 100
Section 1018. Limitation on Dividends and Other
Payment Restrictions Affecting
Subsidiaries......................... 100
Section 1019. Provision of Financial Statements...... 101
Section 1020. Statement by Officers as to Default.... 102
Section 1021. Waiver of Certain Covenants............ 102
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption................... 103
Section 1102. Applicability of Article............... 103
Section 1103. Election to Redeem; Notice to Trustee.. 103
Section 1104. Selection by Trustee of Securities to
Be Redeemed.......................... 103
Section 1105. Notice of Redemption................... 104
Section 1106. Deposit of Redemption Price............ 105
Section 1107. Securities Payable on Redemption Date.. 105
Section 1108. Securities Redeemed or Purchased
in Part.............................. 105
PAGE
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
Section 1201. Securities Subordinate to
Senior Indebtedness.................. 106
Section 1202. Payment Over of Proceeds Upon
Dissolution, etc..................... 106
Section 1203. Suspension of Payment When Senior
Indebtedness in Default.............. 108
Section 1204. Payment Permitted if No Default........ 110
Section 1205. Subrogation to Rights of Holders of
Senior Indebtedness.................. 110
Section 1206. Provisions Solely to Define
Relative Rights...................... 110
Section 1207. Trustee to Effectuate Subordination.... 111
Section 1208. No Waiver of Subordination Provisions.. 111
Section 1209. Notice to Trustee...................... 112
Section 1210. Reliance on Judicial Order or
Certificate of Liquidating Agent..... 113
Section 1211. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation
of Trustee's Rights.................. 114
Section 1212. Article Applicable to Paying Agents.... 114
Section 1213. No Suspension of Remedies.............. 114
Section 1214. Trustee's Relation to Senior
Indebtedness......................... 114
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 1301. Satisfaction and Discharge of
Indenture............................ 115
Section 1302. Application of Trust Money............. 116
ARTICLE FOURTEEN
GUARANTEES
Section 1401. Guarantors' Guarantee.................. 117
Section 1402. Continuing Guarantee; No Right of
Set-Off; Independent Obligation...... 117
Section 1403. Guarantee Absolute..................... 118
Section 1404. Right to Demand Full Performance....... 121
Section 1405. Waivers................................ 121
PAGE
____
Section 1406. The Guarantors Remain
Obligated in Event the Company Is
No Longer Obligated to Discharge
Indenture Obligations................ 122
Section 1407. Fraudulent Conveyance, Subrogation..... 122
Section 1408. Guarantee Is in Addition to Other
Security............................. 123
Section 1409. Release of Security Interests.......... 123
Section 1410. No Bar to Further Actions.............. 123
Section 1411. Failure to Exercise Rights Shall Not
Operate as a Waiver; No Suspension
of Remedies.......................... 123
Section 1412. Trustee's Duties; Notice to Trustee.... 124
Section 1413. Successors and Assigns................. 124
Section 1414. Release of Guarantee................... 124
Section 1415. Execution of Guarantee................. 125
Section 1416. Guarantee Subordinate to Senior
Guarantor Indebtedness............... 125
Section 1417. Payment Over of Proceeds Upon
Dissolution of the Guarantor, etc.... 126
Section 1418. Default on Senior Guarantor
Indebtedness......................... 128
Section 1419. Payment Permitted by Each of the
Guarantors if No Default............. 128
Section 1420. Subrogation to Rights of Holders of
Senior Guarantor Indebtedness........ 128
Section 1421. Provisions Solely to Define Relative
Rights............................... 129
Section 1422. Trustee to Effectuate Subordination.... 129
Section 1423. No Waiver of Subordination Provisions.. 130
Section 1424. Notice to Trustee by Each of the
Guarantors........................... 131
Section 1425. Reliance on Judicial Order or
Certificate of Liquidating Agent..... 132
Section 1426. Rights of Trustee as a Holder of Senior
Guarantor Indebtedness; Preservation
of Trustee's Rights.................. 132
Section 1427. Article Applicable to Paying Agents.... 132
Section 1428. No Suspension of Remedies.............. 133
Section 1429. Trustee's Relation to Senior
Guarantor Indebtedness............... 133
PAGE
TESTIMONIUM ........................................... 134
SIGNATURES AND SEALS .................................. 134
ACKNOWLEDGMENTS
SCHEDULE I Permitted Indebtedness
SCHEDULE II List of Dividend Restrictions
EXHIBIT A Form of Intercompany Note
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of December 27, 1993
Trust Indenture Indenture
Act Section Section
310(a)(1) ........................ 608
(a)(2) ........................ 608
(b) ........................ 607, 609
311(a) ........................ 612
312(c) ........................ 702
313(a) ........................ 703
(c) ........................ 703, 704
314(a) ........................ 704
(a)(4) ........................ 1020
(c)(1) ........................ 103
(c)(2) ........................ 103
(e) ........................ 103
315(b) ........................ 601
316(a)(last
sentence) ........................ 101 ("Outstanding")
(a)(1)(A) ........................ 502, 512
(a)(1)(B) ........................ 513
(b) ........................ 508
(c) ........................ 105
317(a)(1) ........................ 503
(a)(2) ........................ 504
(b) ........................ 1003
318(a) ........................ 108
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of this
Indenture.
<PAGE>
INDENTURE, dated as of December 27, 1993, among
CANANDAIGUA WINE COMPANY, INC., a Delaware corporation (the
"Company"), the Subsidiaries listed on the signature pages
hereto ("Guarantors"), and CHEMICAL BANK, a New York
corporation as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an
issue of 8 3/4% Senior Subordinated Notes due 2003 (the
"Securities"), of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company
has duly authorized the execution and delivery of this
Indenture and the Securities;
Each Guarantor has duly authorized the issuance of
a guarantee (the "Guarantees") of the Securities, of
substantially the tenor hereinafter set forth, and to
provide therefor, each Guarantor has duly authorized the
execution and delivery of this Indenture and the Guarantee;
This Indenture is subject to, and shall be governed
by, the provisions of the Trust Indenture Act that are
required to be part of and to govern indentures qualified
under the Trust Indenture Act;
All acts and things necessary have been done to
make (i) the Securities, when duly issued and executed by
the Company and authenticated and delivered hereunder, the
valid obligations of the Company, (ii) the Guarantees, when
executed by each of the Guarantors and delivered hereunder,
the valid obligation of each of the Guarantors subject to
applicable principles of bankruptcy, creditors' rights and
fraudulent conveyance and (iii) this Indenture a valid
agreement of the Company and each of the Guarantors in
accordance with the terms of this Indenture;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities
as follows:
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. DEFINITIONS.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article, and include the
plural as well as the singular;
(b) all other terms used herein which are defined
in the Trust Indenture Act, either directly or by reference
therein, have the meanings assigned to them therein;
(c) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
GAAP;
(d) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or other
subdivision;
(e) all references to $, US$, dollars or United
States dollars shall refer to the lawful currency of the
United States of America; and
(f) all references herein to particular Sections
or Articles refer to this Indenture unless otherwise so
indicated.
Certain terms used principally in Article Four are
defined in Article Four.
"Acquired Indebtedness" means Indebtedness of a
Person (i) existing at the time such Person becomes a
Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Indebtedness shall be deemed to be
incurred on the date of the related acquisition of assets
from any Person or the date the acquired Person becomes a
Subsidiary.
"Affiliate" means, with respect to any specified
Person, (i) any other Person directly or indirectly
controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) any other
Person that owns, directly or indirectly, 5% or more of
such Person's Capital Stock or any officer or director of
any such Person or other Person or, with respect to any
natural Person, any person having a relationship with such
Person by blood, marriage or adoption not more remote than
first cousin or (iii) any other Person 10% or more of the
voting Capital Stock of which are benefically owned or held
directly or indirectly by such specified Person. For the
purposes of this definition, "control" when used with
respect to any specified Person means the power to direct
the management and policies of such Person directly or
indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance,
transfer, lease or other disposition (including, without
limitation, by way of merger, consolidation or Sale and
Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related
transactions, of (i) any Capital Stock of any Subsidiary;
(ii) all or substantially all of the properties and assets
of any division or line of business of the Company or its
Subsidiaries; or (iii) any other properties or assets of the
Company or any Subsidiary, other than in the ordinary course
of business. For the purposes of this definition, the term
"Asset Sale" shall not include (x) any transfer of
properties and assets (A) that is governed by Section 801(a)
or (B) that is of the Company to any Wholly Owned
Subsidiary, or of any Subsidiary to the Company or any
Wholly Owned Subsidiary in accordance with the terms of this
Indenture or (y) transfers of properties and assets in any
given fiscal year with an aggregate Fair Market Value of
less than $1,000,000.
"Average Life to Stated Maturity" means, as of the
date of determination with respect to any Indebtedness, the
quotient obtained by dividing (i) the sum of the products of
(a) the number of years from the date of determination to
the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of
each such principal payment by (ii) the sum of all such
principal payments.
"Bankruptcy Law" means Title 11, United States
Bankruptcy Code of 1978, as amended, or any similar United
States Federal or State law relating to bankruptcy,
insolvency, receivership, winding-up, liquidation,
reorganization or relief of debtors or any amendment to,
succession to or change in any such law.
"Barton Letter of Credit" means the "Barton Letter
of Credit" issued to American National Bank and Trust
Company of Chicago, as escrowee, under the Credit Agreement.
"Board of Directors" means the board of directors
of the Company or any Guarantor, as the case may be, or any
duly authorized committee of such board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company or any Guarantor, as the case may be, to have been
duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions or trust companies in The City of New
York or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law,
regulation or executive order to close.
"Capital Lease Obligation" means any obligations of
the Company and its Subsidiaries on a Consolidated basis
under any capital lease of real or personal property which,
in accordance with GAAP, has been recorded as a capitalized
lease obligation.
"Capital Stock" of any Person means any and all
shares, interests, participations or other equivalents
(however designated) of such Person's capital stock.
"Cash Equivalents" means, (i) any evidence of
Indebtedness of a Person, other than the Company or its
Subsidiaries, with a maturity of one year or less from the
date of acquisition issued or directly and fully guaranteed
or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED, that the full faith and
credit of the United States of America is pledged in support
thereof); (ii) certificates of deposit or acceptances with a
maturity of one year or less from the date of acquisition of
any financial institution that is a member of the Federal
Reserve System having combined capital and surplus and
undivided profits of not less than $500,000,000;
(iii) commercial paper with a maturity of one year or less
from the date of acquisition issued by a corporation that is
not an Affiliate of the Company organized under the laws of
any state of the United States or the District of Columbia
and rated A-1 (or higher) according to S&P or P-1 (or
higher) according to Moody's or at least an equivalent
rating category of another nationally recognized securities
rating agency; (iv) any money market deposit accounts issued
or offered by a domestic commercial bank having capital and
surplus in excess of $500,000,000; and (v) repurchase
agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally
guaranteed by the government of the United States of America
or issued by any agency thereof and backed by the full faith
and credit of the United States of America, in each case
maturing within one year from the date of acquisition;
PROVIDED that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of
Depository Institutions With Securities Dealers and Others,
as adopted by the Comptroller of the Currency on October 31,
1985.
"Change of Control" means the occurrence of any of
the following events: (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange
Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed
to have beneficial ownership of all shares that such Person
has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of more than 30% of the voting power of the
total outstanding Voting Stock of the Company voting as one
class, PROVIDED that the Permitted Holders "beneficially
own" (as so defined) a percentage of Voting Stock having a
lesser percentage of the voting power than such other Person
and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company;
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors
whose election to such Board or whose nomination for
election by the shareholders of the Company, was approved by
a vote of 66 2/3% of the directors then still in office who
were either directors at the beginning of such period or
whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of
such Board of Directors then in office; (iii) the Company
consolidates with or merges with or into any Person or
conveys, transfers or leases all or substantially all of its
assets to any Person, or any corporation consolidates with
or merges into or with the Company, in any such event
pursuant to a transaction in which the outstanding Voting
Stock of the Company is changed into or exchanged for cash,
securities or other property, other than any such
transaction where the outstanding Voting Stock of the
Company is not changed or exchanged at all (except to the
extent necessary to reflect a change in the jurisdiction of
incorporation of the Company) or where (A) the outstanding
Voting Stock of the Company is changed into or exchanged for
(x) Voting Stock of the surviving corporation which is not
Redeemable Capital Stock or (y) cash, securities and other
property (other than Capital Stock of the surviving
corporation) in an amount which could be paid by the Company
as a Restricted Payment in accordance with Section 1009 (and
such amount shall be treated as a Restricted Payment subject
to the provisions described under Section 1009) and (B) no
"person" or "group" other than Permitted Holders owns
immediately after such transaction, directly or indirectly,
more than the greater of (1) 30% of the voting power of the
total outstanding Voting Stock of the surviving corporation
voting as one class and (2) the percentage of such voting
power of the surviving corporation held, directly or
indirectly, by Permitted Holders immediately after such
transaction; or (iv) the Company is liquidated or dissolved
or adopts a plan of liquidation or dissolution other than in
a transaction which complies with the provisions described
under Article Eight.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Exchange Act, or if at any time after the execution of
this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such
time.
"Company" means Canandaigua Wine Company, Inc., a
corporation incorporated under the laws of Delaware, until a
successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a
written request or order signed in the name of the Company
by any one of its Chairman of the Board, its Vice-Chairman,
its President, its Chief Operating Officer or a Vice
President (regardless of Vice Presidential designation), and
by any one of its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Fixed Charge Coverage Ratio" of the
Company means, for any period, the ratio of (a) the sum of
Consolidated Net Income (Loss), Consolidated Interest
Expense, Consolidated Income Tax Expense and Consolidated
Non-cash Charges deducted in computing Consolidated Net
Income (Loss) in each case, for such period, of the Company
and its Subsidiaries on a Consolidated basis, all determined
in accordance with GAAP to (b) the sum of Consolidated
Interest Expense for such period and cash and non-cash
dividends paid on any Preferred Stock of the Company during
such period; PROVIDED that (i) in making such computation,
the Consolidated Interest Expense attributable to interest
on any Indebtedness computed on a PRO FORMA basis and
(A) bearing a floating interest rate, shall be computed as
if the rate in effect on the date of computation had been
the applicable rate for the entire period and (B) which was
not outstanding during the period for which the computation
is being made but which bears, at the option of the Company,
a fixed or floating rate of interest, shall be computed by
applying at the option of the Company, either the fixed or
floating rate and (ii) in making such computation, the
Consolidated Interest Expense of the Company attributable to
interest on any Indebtedness under a revolving credit
facility computed on a PRO FORMA basis shall be computed
based upon the average daily balance of such Indebtedness
during the applicable period.
"Consolidated Income Tax Expense" means for any
period, as applied to the Company, the provision for
federal, state, local and foreign income taxes of the
Company and its Consolidated Subsidiaries for such period as
determined in accordance with GAAP on a Consolidated basis.
"Consolidated Interest Expense" of the Company
means, without duplication, for any period, the sum of
(a) the interest expense of the Company and its Consolidated
Subsidiaries for such period, on a Consolidated basis,
including, without limitation, (i) amortization of debt
discount, (ii) the net cost under interest rate contracts
(including amortization of discounts), (iii) the interest
portion of any deferred payment obligation and (iv) accrued
interest, plus (b) (i) the interest component of the Capital
Lease Obligations paid, accrued and/or scheduled to be paid
or accrued by the Company during such period and (ii) all
capitalized interest of the Company and its Consolidated
Subsidiaries, in each case as determined in accordance with
GAAP on a Consolidated basis.
"Consolidated Net Income (Loss)" of the Company
means, for any period, the Consolidated net income (or loss)
of the Company and its Consolidated Subsidiaries for such
period as determined in accordance with GAAP on a
Consolidated basis, adjusted, to the extent included in
calculating such net income (loss), by excluding, without
duplication, (i) all extraordinary gains or losses (less all
fees and expenses relating thereto), (ii) the portion of net
income (or loss) of the Company and its Consolidated
Subsidiaries allocable to minority interests in
unconsolidated Persons to the extent that cash dividends or
distributions have not actually been received by the Company
or one of its Consolidated Subsidiaries, (iii) net income
(or loss) of any Person combined with the Company or any of
its Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of
combination, (iv) any gain or loss, net of taxes, realized
upon the termination of any employee pension benefit plan,
(v) net gains (but not losses) (less all fees and expenses
relating thereto) in respect of dispositions of assets other
than in the ordinary course of business, or (vi) the net
income of any Subsidiary to the extent that the declaration
of dividends or similar distributions by that Subsidiary of
that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute,
rule or governmental regulations applicable to that
Subsidiary or its stockholders.
"Consolidated Net Worth" of any Person means the
Consolidated stockholders' equity (excluding Redeemable
Capital Stock) of such Person and its subsidiaries, as
determined in accordance with GAAP on a Consolidated basis.
"Consolidated Non-cash Charges" of the Company
means, for any period, the aggregate depreciation,
amortization and other non-cash charges of the Company and
its Consolidated subsidiaries for such period, as determined
in accordance with GAAP (excluding any non-cash charge which
requires an accrual or reserve for cash charges for any
future period).
"Consolidation" means, with respect to any Person,
the consolidation of the accounts of such Person and each of
its subsidiaries if and to the extent the accounts of such
Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance
with GAAP. The term "Consolidated" shall have a similar
meaning.
"Corporate Trust Office" means the office of the
Trustee or an affiliate or agent thereof at which at any
particular time the corporate trust business for the
purposes of this Indenture shall be principally
administered, which office at the date of execution of this
Indenture is located at 450 West 33rd Street, 15th Floor,
New York, New York.
"Credit Agreement" means the Credit Agreement,
dated as of June 29, 1993, between the Company, the
Subsidiaries of the Company identified on the signature
pages thereof under the caption "Subsidiary Guarantors," the
lenders named therein and The Chase Manhattan Bank, N.A., as
agent, including any ancillary documents executed in
connection therewith, as such agreement may be amended,
renewed, extended, substituted, refinanced, restructured,
replaced, supplemented or otherwise modified from time to
time (including, without limitation, any successive
renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other
modifications of the foregoing). For all purposes under
this Indenture, "Credit Agreement" shall include any
amendments, renewals, extensions, substitutions,
refinancings, restructurings, replacements, supplements or
any other modifications that increase the principal amount
of the Indebtedness or the commitments to lend thereunder
and have been made in compliance with Section 1008; PROVIDED
that, for purposes of the definition of "Permitted
Indebtedness," no such increase may result in the principal
amount of Indebtedness of the Company under the Credit
Agreement exceeding the amount permitted by Section
1008(b)(i).
"Default" means any event which is, or after notice
or passage of time or both would be, an Event of Default.
"Designated Senior Guarantor Indebtedness" means
(i) all Senior Guarantor Indebtedness which guarantees
Indebtedness under the Credit Agreement and (ii) any other
Senior Guarantor Indebtedness which is incurred pursuant to
an agreement (or series of related agreements)
simultaneously entered into providing for Indebtedness, or
commitments to lend, of at least $30,000,000 at the time of
determination and is specifically designated in the
instrument evidencing such Senior Guarantor Indebtedness or
the agreement under which such Senior Guarantor Indebtedness
arises as "Designated Senior Guarantor Indebtedness" by the
Guarantor which is the obligor under the Senior Guarantor
Indebtedness.
"Designated Senior Indebtedness" means (i) all
Senior Indebtedness under the Credit Agreement and (ii) any
other Senior Indebtedness which is incurred pursuant to an
agreement (or series of related agreements) simultaneously
entered into providing for Indebtedness, or commitments to
lend, of at least $30,000,000 at the time of determination
and is specifically designated in the instrument evidencing
such Senior Indebtedness or the agreement under which such
Senior Indebtedness arises as "Designated Senior
Indebtedness" by the Company.
"Event of Default" has the meaning specified in
Section 501.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Fair Market Value" means, with respect to any
asset or property, the sale value that would be obtained in
an arm's-length transaction between an informed and willing
seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"GAAP" or "Generally Accepted Accounting
Principles" means generally accepted accounting principles
in the United States, consistently applied, which are in
effect on the date of this Indenture.
"Guarantee" means the guarantee by any Guarantor of
the Company's Indenture Obligations pursuant to a guarantee
given in accordance with this Indenture, including the
Guarantees by the Guarantors included in Article Fourteen of
this Indenture and any Guarantee delivered pursuant to
Section 1014.
"Guaranteed Debt" of any Person means, without
duplication, all Indebtedness of any other Person referred
to in the definition of Indebtedness contained in this
Section guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly
by such Person through an agreement (i) to pay or purchase
such Indebtedness or to advance or supply funds for the
payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase
or sell services, primarily for the purpose of enabling the
debtor to make payment of such Indebtedness or to assure the
holder of such Indebtedness against loss, (iii) to supply
funds to, or in any other manner invest in, the debtor
(including any agreement to pay for property or services
without requiring that such property be received or such
services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the
net worth, solvency or other financial condition of the
debtor or (v) otherwise to assure a creditor against loss;
PROVIDED that the term "guarantee" shall not include
endorsements for collection or deposit, in either case in
the ordinary course of business.
"Guarantor" means the Subsidiaries listed on the
signature pages hereto as guarantors or any other guarantor
of the Indenture Obligations.
"Holder" means a Person in whose name a Security is
registered in the Security Register.
"Indebtedness" means, with respect to any Person,
without duplication, (i) all indebtedness of such Person for
borrowed money or for the deferred purchase price of
property or services, excluding any trade payables and other
accrued current liabilities arising in the ordinary course
of business, but including, without limitation, all
obligations, contingent or otherwise, of such Person in
connection with any letters of credit issued under letter of
credit facilities, acceptance facilities or other similar
facilities and in connection with any agreement to
purchase, redeem, exchange, convert or otherwise acquire for
value any Capital Stock of such Person, or any warrants,
rights or options to acquire such Capital Stock, now or
hereafter outstanding, (ii) all obligations of such Person
evidenced by bonds, notes, debentures or other similar
instruments, (iii) all indebtedness created or arising under
any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to
repossession or sale of such property), but excluding trade
payables arising in the ordinary course of business,
(iv) all obligations under Interest Rate Agreements of such
Person, (v) all Capital Lease Obligations of such Person,
(vi) all Indebtedness referred to in clauses (i) through (v)
above of other Persons and all dividends of other Persons,
the payment of which is secured by (or for which the holder
of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien, upon or with respect
to property (including, without limitation, accounts and
contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of
such Indebtedness, (vii) all Guaranteed Debt of such Person,
(viii) all Redeemable Capital Stock valued at the greater of
its voluntary or involuntary maximum fixed repurchase price
plus accrued and unpaid dividends, and (ix) any amendment,
supplement, modification, deferral, renewal, extension,
refunding or refinancing of any liability of the types
referred to in clauses (i) through (viii) above. For
purposes hereof, the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the
terms of such Redeemable Capital Stock as if such Redeemable
Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured
by, the Fair Market Value of such Redeemable Capital Stock,
such Fair Market Value to be determined in good faith by the
board of directors of the issuer of such Redeemable Capital
Stock.
"Indenture Obligations" means the obligations of
the Company and any other obligor under this Indenture or
under the Securities, including any Guarantor, to pay
principal of, premium, if any, and interest when due and
payable, and all other amounts due or to become due under or
in connection with this Indenture, the Securities and the
performance of all other obligations to the Trustee and the
Holders under this Indenture and the Securities, according
to the terms hereof and thereof.
"Interest Payment Date" means the Stated Maturity
of an installment of interest on the Securities.
"Interest Rate Agreements" means one or more of the
following agreements which shall be entered into by one or
more financial institutions: interest rate protection
agreements (including, without limitation, interest rate
swaps, caps, floors, collars and similar agreements) and/or
other types of interest rate hedging agreements from time to
time.
"Investments" means, with respect to any Person,
directly or indirectly, any advance, loan (including
guarantees), or other extension of credit or capital
contribution to (by means of any transfer of cash or other
property to others or any payment for property or services
for the account or use of others), or any purchase,
acquisition or ownership by such Person of any Capital
Stock, bonds, notes, debentures or other securities issued
or owned by, any other Person and all other items that would
be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien
(statutory or otherwise), privilege, security interest,
hypothecation or other encumbrance upon or with respect to
any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Maturity" when used with respect to any Security
means the date on which the principal of such Security
becomes due and payable as therein provided or as provided
in this Indenture, whether at Stated Maturity, the Offer
Date or the Redemption Date and whether by declaration of
acceleration, Offer in respect of Excess Proceeds, Change of
Control, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. or
any successor rating agency.
"Net Cash Proceeds" means (a) with respect to any
Asset Sale by any Person, the proceeds thereof in the form
of cash or Temporary Cash Investments including payments in
respect of deferred payment obligations when received in the
form of, or stock or other assets when disposed of for, cash
or Temporary Cash Investments (except to the extent that
such obligations are financed or sold with recourse to the
Company or any Subsidiary) net of (i) brokerage commissions
and other actual fees and expenses (including fees and
expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes payable as a
result of such Asset Sale, (iii) payments made to retire
Indebtedness where payment of such Indebtedness is secured
by the assets or properties the subject of such Asset Sale,
(iv) amounts required to be paid to any Person (other than
the Company or any Subsidiary) owning a beneficial interest
in the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by the Company or any Subsidiary, as
the case may be, as a reserve, in accordance with GAAP,
against any liabilities associated with such Asset Sale and
retained by the Company or any Subsidiary, as the case may
be, after such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities
under any indemnification obligations associated with such
Asset Sale, all as reflected in an Officers' Certificate
delivered to the Trustee and (b) with respect to any
issuance or sale of Capital Stock or options, warrants or
rights to purchase Capital Stock, or debt securities or
Capital Stock that have been converted into or exchanged for
Capital Stock, as referred to under Section 1009, the
proceeds of such issuance or sale in the form of cash or
Temporary Cash Investments, including payments in respect of
deferred payment obligations when received in the form of,
or stock or other assets when disposed for, cash or
Temporary Cash Investments (except to the extent that such
obligations are financed or sold with recourse to the
Company or any Subsidiary), net of attorneys' fees,
accountants' fees and brokerage, consultation, underwriting
and other fees and expenses actually incurred in connection
with such issuance or sale and net of taxes paid or payable
as a result thereof.
"Non-payment Default" means any event (other than a
Payment Default) the occurrence of which entitles one or
more Persons to accelerate the maturity of any Designated
Senior Indebtedness.
"Officers' Certificate" means a certificate signed
by the Chairman of the Board, Vice Chairman, the President,
the Chief Operating Officer or a Vice President (regardless
of Vice Presidential designation), and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company or any Guarantor, as the case may
be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company or any
Guarantor, as applicable, unless an Opinion of Independent
Counsel is required pursuant to the terms of this Indenture,
and who shall be acceptable to the Trustee.
"Opinion of Independent Counsel" means a written
opinion of counsel issued by someone who is not an employee
or consultant (other than non-employee legal counsel) of the
Company or any Guarantor and who shall be reasonably
acceptable to the Trustee.
"Outstanding" when used with respect to Securities
means, as of the date of determination, all Securities
theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for whose
payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders; PROVIDED that if
such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor reasonably satisfactory to the Trustee
has been made;
(c) Securities, except to the extent provided in
Sections 402 and 403, with respect to which the Company has
effected defeasance or covenant defeasance as provided in
Article Four; and
(d) Securities in exchange for or in lieu of which
other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the
Trustee proof reasonably satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands
the Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders
of the requisite principal amount of Outstanding Securities
have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the
Company, any Guarantor, or any other obligor upon the
Securities or any Affiliate of the Company, any Guarantor,
or such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the reasonable
satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not
the Company, any Guarantor or any other obligor upon the
Securities or any Affiliate of the Company, any Guarantor or
such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of
the Company or a Guarantor that is PARI PASSU in right of
payment to the Securities or a Guarantee, as the case may
be.
"Paying Agent" means any Person authorized by the
Company to pay the principal, premium, if any, or interest
on any Securities on behalf of the Company.
"Payment Default" means any default in the payment
of principal, premium, if any, or interest, on any
Designated Senior Indebtedness.
"Permitted Guarantor Junior Securities" means, so
long as the effect of any exclusion employing this
definition is not to cause the Guarantee to be treated in
any case or proceeding or similar event described in clauses
(a), (b) or (c) of Section 1417 as part of the same class of
claims as the Senior Guarantor Indebtedness or any class of
claims PARI PASSU with, or senior to, the Senior Guarantor
Indebtedness, for any payment or distribution, debt or
equity securities of any Guarantor or any successor
corporation provided for by a plan of reorganization or
readjustment that are subordinated at least to the same
extent that the Guarantee is subordinated to the payment of
all Senior Guarantor Indebtedness then outstanding; PROVIDED
that (1) if a new corporation results from such
reorganization or readjustment, such corporation assumes any
Senior Guarantor Indebtedness not paid in full in cash or
Cash Equivalents in connection with such reorganizaton or
readjustment and (2) the rights of the holders of such
Senior Guarantor Indebtedness are not, without the consent
of such holders, altered by such reorganization or
readjustment.
"Permitted Holders" means as of the date of
determination (i) Marvin Sands, Richard Sands and Robert
Sands; (ii) family members or the relatives of the Persons
described in clause (i); (iii) any trusts created for the
benefit of the Persons described in clauses (i), (ii) or
(iv) or any trust for the benefit of any such trust; or
(iv) in the event of the incompetence or death of any of the
persons described in clauses (i) and (ii), such Person's
estate, executor, administrator, committee or other
personal representative or beneficiaries, in each case who
at any particular date shall beneficially own or have the
right to acquire, directly or indirectly, Capital Stock of
the Company.
"Permitted Investment" means (i) Investments in any
Wholly Owned Subsidiary or any Person which, as a result of
such Investment, becomes a Wholly Owned Subsidiary;
(ii) Indebtedness of the Company or a Subsidiary described
under clauses (iv) and (v) of the definition of "Permitted
Indebtedness"; (iii) Temporary Cash Investments;
(iv) Investments acquired by the Company or any Subsidiary
in connection with an Asset Sale permitted under Section
1013 to the extent such Investments are non-cash proceeds as
permitted under such covenant; (v) guarantees of
Indebtedness otherwise permitted by the Indenture; and
(vi) Investments in existence on the date of this Indenture.
"Permitted Junior Securities" means, so long as the
effect of any exclusion employing this definition is not to
cause the Securities to be treated in any case or proceeding
or similar event described in clauses (a), (b) or (c) of
Section 1202 as part of the same class of claims as the
Senior Indebtedness or any class of claims PARI PASSU with,
or senior to, the Senior Indebtedness, for any payment or
distribution, debt or equity securities of the Company or
any successor corporation provided for by a plan of
reorganization or readjustment that are subordinated at
least to the same extent that the Securities are
subordinated to the payment of all Senior Indebtedness then
outstanding; PROVIDED that (1) if a new corporation results
from such reorganization or readjustment, such corporation
assumes any Senior Indebtedness not paid in full in cash or
Cash Equivalents in connection with such reorganization or
readjustment and (2) the rights of the holders of such
Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivisions thereof.
"Predecessor Security" of any particular Security
means every previous Security evidencing all or a portion of
the same debt as that evidenced by such particular Security;
and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange
for a mutilated Security or in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as
the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any
Person, any and all shares, interests, participations or
other equivalents (however designated) of such Person's
preferred stock whether now outstanding, or issued after the
date of this Indenture, and including, without limitation,
all classes and series of preferred or preference stock.
"Qualified Capital Stock" of any Person means any
and all Capital Stock of such Person other than Redeemable
Capital Stock.
"Redeemable Capital Stock" means any Capital Stock
that, either by its terms or by the terms of any security
into which it is convertible or exchangeable or otherwise,
is or upon the happening of an event or passage of time
would be, required to be redeemed prior to any Stated
Maturity of the principal of the Securities or is redeemable
at the option of the holder thereof at any time prior to any
such Stated Maturity, or is convertible into or exchangeable
for debt securities at any time prior to any such Stated
Maturity at the option of the holder thereof.
"Redemption Date" when used with respect to any
Security to be redeemed pursuant to any provision in this
Indenture means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price" when used with respect to any
Security to be redeemed pursuant to any provision in this
Indenture means the price at which it is to be redeemed
pursuant to this Indenture.
"Regular Record Date" for the interest payable on
any Interest Payment Date means the 15th day (whether or not
a Business Day) next preceding such Interest Payment Date.
"Responsible Officer" when used with respect to the
Trustee means any officer assigned to the Corporate Trust
Office or the agent of the Trustee appointed hereunder,
including any vice president, assistant vice president,
assistant secretary, or any other officer or assistant
officer of the Trustee or the agent of the Trustee appointed
hereunder to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Payment" has the meaning specified in
Section 1009.
"S&P" means Standard and Poor's Corporation or any
successor rating agency.
"Sale and Leaseback Transaction" means any
transaction or series of related transactions pursuant to
which the Company or a Subsidiary sells or transfers any
property or asset in connection with the leasing, or the
resale against installment payments, of such property or
asset to the seller or transferor.
"Securities Act" means the Securities Act of 1933,
as amended.
"Security Register" and "Security Registrar" have
the respective meanings specified in Section 305.
"Senior Guarantor Indebtedness" means the principal
of, premium, if any, and interest (including interest
accruing after the filing of a petition initiating any
proceeding under any state, federal or foreign bankruptcy
laws whether or not allowable as a claim in such proceeding)
on any Indebtedness of any Guarantor (other than as
otherwise provided in this definition), whether outstanding
on the date of this Indenture or thereafter created,
incurred or assumed, and whether at any time owing, actually
or contingent, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same
or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right
of payment to any Guarantee. Without limiting the
generality of the foregoing, "Senior Guarantor Indebtedness"
shall include the principal of, premium, if any, and
interest (including interest accruing after the filing of a
petition initiating any proceeding under any state, federal
or foreign bankruptcy laws whether or not allowable as a
claim in such proceeding) and all other obligations of every
nature of any Guarantor from time to time owed to the
lenders (or their agent) under the Credit Agreement;
PROVIDED, HOWEVER, that any Indebtedness under any
refinancing, refunding or replacement of the Credit
Agreement shall not constitute Senior Guarantor Indebtedness
to the extent that the Indebtedness thereunder is by its
express terms subordinate to any other Indebtedness of any
Guarantor. Notwithstanding the foregoing, "Senior Guarantor
Indebtedness" shall not include (i) Indebtedness evidenced
by the Guarantees, (ii) Indebtedness that is subordinate or
junior in right of payment to any Indebtedness of any
Guarantor, (iii) Indebtedness which when incurred and
without respect to any election under Section 1111(b) of
Title 11 United States Code, is without recourse to any
Guarantor, (iv) Indebtedness which is represented by
Redeemable Capital Stock, (v) any liability for foreign,
federal, state, local or other taxes owed or owing by any
Guarantor to the extent such liability constitutes
Indebtedness, (vi) Indebtedness of any Guarantor to a
Subsidiary or any other Affiliate of the Company or any of
such Affiliate's subsidiaries, (vii) that portion of any
Indebtedness which at the time of issuance is issued in
violation of this Indenture and (viii) Indebtedness owed by
any Guarantor for compensation to employees or for services.
"Senior Indebtedness" means the principal of,
premium, if any, and interest (including interest accruing
after the filing of a petition initiating any proceeding
under any state, federal or foreign bankruptcy law whether
or not allowable as a claim in such proceeding) on any
Indebtedness of the Company (other than as otherwise
provided in this definition), whether outstanding on the
date of this Indenture or thereafter created, incurred or
assumed, and whether at any time owing, actually or
contingent, unless, in the case of any particular
indebtedness, the instrument creating or evidencing the same
or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right
of payment to the Securities. Without limiting the
generality of the foregoing, "Senior Indebtedness" shall
include (i) the principal of, premium, if any, and interest
(including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or
foreign bankruptcy laws whether or not allowable as a claim
in such proceeding) and all other obligations of every
nature of the Company from time to time owed to the lenders
(or their agent) under the Credit Agreement; PROVIDED,
HOWEVER, that any Indebtedness under any refinancing,
refunding or replacement of the Credit Agreement shall not
constitute Senior Indebtedness to the extent that the
Indebtedness thereunder is by its express terms subordinate
to any other Indebtedness of the Company, and
(ii) Indebtedness under Interest Rate Agreements.
Notwithstanding the foregoing, "Senior Indebtedness" shall
not include (i) Indebtedness evidenced by the Securities,
(ii) Indebtedness that is subordinate or junior in right of
payment to any Indebtedness of the Company,
(iii) Indebtedness which when incurred and without respect
to any election under Section 1111(b) of Title 11 United
States Code, is without recourse to the Company,
(iv) Indebtedness which is represented by Redeemable Capital
Stock, (v) any liability for foreign, federal, state, local
or other taxes owed or owing by the Company to the extent
such liability constitutes Indebtedness, (vi) Indebtedness
of the Company to a Subsidiary or any other Affiliate of the
Company or any of such Affiliate's subsidiaries, (vii) that
portion of any Indebtedness which at the time of issuance is
issued in violation of this Indenture and
(viii) Indebtedness owed by the Company for compensation to
employees or for services.
"Special Record Date" for the payment of any
Defaulted Interest means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity" when used with respect to any
Indebtedness or any installment of interest thereon, means
the dates specified in such Indebtedness as the fixed date
on which the principal of such Indebtedness or such
installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of
the Company or a Guarantor subordinated in right of payment
to the Securities or a Guarantee, as the case may be.
"Subsidiary" means any Person a majority of the
equity ownership or the Voting Stock of which is at the time
owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Temporary Cash Investments" means (i) any evidence
of Indebtedness of a Person, other than the Company or its
Subsidiaries, maturing not more than one year after the date
of acquisition, issued by the United States of America, or
an instrumentality or agency thereof and guaranteed fully as
to principal, premium, if any, and interest by the United
States of America, (ii) any certificate of deposit, maturing
not more than one year after the date of acquisition, issued
by, or time deposit of, a commercial banking institution
that is a member of the Federal Reserve System and that has
combined capital and surplus and undivided profits of not
less than $500,000,000, whose debt has a rating, at the time
as of which any investment therein is made, of "P-1" (or
higher) according to Moody's Investors Service, Inc.
("Moody's") or any successor rating agency or "A-1" (or
higher) according to Standard and Poor's Corporation ("S&P")
or any successor rating agency, (iii) commercial paper,
maturing not more than one year after the date of
acquisition, issued by a corporation (other than an
Affiliate or Subsidiary of the Company) organized and
existing under the laws of the United States of America with
a rating, at the time as of which any investment therein is
made, of "P-1" (or higher) according to Moody's or "A-1" (or
higher) according to S&P and (iv) any money market deposit
accounts issued or offered by a domestic commercial bank
having capital and surplus in excess of $500,000,000.
"Trust Indenture Act" means the Trust Indenture Act
of 1939, as amended.
"Trustee" means, except as set forth in Section 405
hereof, the Person named as the "Trustee" in the first
paragraph of this instrument, until a successor trustee
shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter "Trustee" shall mean such
successor trustee.
"Voting Stock" means stock of the class or classes
pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least
a majority of the board of directors, managers or trustees
of a corporation (irrespective of whether or not at the time
stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
"Wholly Owned Subsidiary" means (i) a Subsidiary
all the Capital Stock of which is owned by the Company or
another Wholly Owned Subsidiary and (ii) Monarch Wine
Company, Limited Partnership, so long as the Company owns
directly or indirectly at least 99% of the outstanding
interests in such partnership and is the general partner
thereof.
Section 102. OTHER DEFINITIONS.
Defined in
TERM Section
-----------
"Act" 105
"Change of Control Offer" 1016
"Change of Control Purchase Date" 1016
"Change of Control Purchase Notice" 1016
"Change of Control Purchase Price" 1016
"covenant defeasance" 403
"Defaulted Interest" 307
"defeasance" 402
"Defeasance Redemption Date" 404
"Defeased Securities" 401
"Deficiency" 1013
"Excess Proceeds" 1013
"incur" 1008
"Initial Blockage Period" 1203
"Offer" 1013
"Offer Date" 1013
"Offered Price" 1013
"Pari Passu Debt Amount" 1013
"Pari Passu Offer" 1013
"Payment Blockage Period" 1203
"Permitted Indebtedness" 1008
"Permitted Payment" 1009
"refinancing" 1008
"Required Filing Dates" 1019
"Security" or "Securities" Recitals
"Security Amount" 1013
"Senior Guarantor Representative" 1424
"Senior Representative" 1203
"Surviving Entity" 801
"U.S. Government Obligations" 404
Section 103. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to
the Trustee to take any action under any provision of this
Indenture, the Company and any Guarantor (if applicable) and
any other obligor on the Securities (if applicable) shall
furnish to the Trustee an Officers' Certificate in a form
and substance reasonably acceptable to the Trustee stating
that all conditions precedent, if any, provided for in this
Indenture (including any covenants compliance with which
constitutes a condition precedent) relating to the proposed
action have been complied with, and an Opinion of Counsel in
a form and substance reasonably acceptable to the Trustee
stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with,
except that, in the case of any such application or request
as to which the furnishing of such documents, certificates
or opinions is specifically required by any provision of
this Indenture relating to such particular application or
request, no additional certificate or opinion need be
furnished.
Every certificate or Opinion of Counsel with
respect to compliance with a condition or covenant provided
for in this Indenture shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(c) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been
complied with.
Section 104. FORM OF DOCUMENTS DELIVERED TO
TRUSTEE.
In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the
Company, any Guarantor or other obligor on the Securities
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel,
unless such officer has actual knowledge that the
certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based
are erroneous. Any such certificate or opinion may be
based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer
or officers of the Company, any Guarantor or other obligor
on the Securities stating that the information with respect
to such factual matters is in the possession of the Company,
any Guarantor or other obligor on the Securities, unless
such counsel has actual knowledge that the certificate or
opinion or representations with respect to such matters are
erroneous. Opinions of Counsel required to be delivered to
the Trustee may have qualifications customary for opinions
of the type required and counsel delivering such Opinions of
Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the
type required, including certificates certifying as to
matters of fact, including that various financial covenants
have been complied with.
Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be
consolidated and form one instrument.
Section 105. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an
agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and
conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section. The fact and date
of the execution by any Person of any such intrument or
writing may be proved in any reasonable manner which the
Trustee deems sufficient.
(b) The ownership of Securities shall be proved by
the Security Register.
(c) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any
Security shall bind every future Holder of the same Security
or the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof, in
respect of anything done, suffered or omitted to be done by
the Trustee, any Paying Agent or the Company or any
Guarantor in reliance thereon, whether or not notation of
such action is made upon such Security.
(d) If the Company shall solicit from the Holders
any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may, at its
option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of such Holders entitled
to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall
have no obligation to do so. Notwithstanding Trust
Indenture Act Section 316(c), any such record date shall be
the record date specified in or pursuant to such Board
Resolution, which shall be a date not more than 30 days
prior to the first solicitation of Holders generally in
connection therewith and no later than the date such
solicitation is completed.
If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or
other Act may be given before or after such record date, but
only the Holders of record at the close of business on such
record date shall be deemed to be Holders for purposes of
determining whether Holders of the requisite proportion of
Securities then Outstanding have authorized or agreed or
consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for this purpose
the Securities then Outstanding shall be computed as of such
record date; PROVIDED that no such request, demand,
authorization, direction, notice, consent, waiver or other
Act by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after
the record date.
Section 106. NOTICES, ETC., TO THE TRUSTEE, THE
COMPANY AND ANY GUARANTOR.
Any request, demand, authorization, direction,
notice, consent, waiver or Act of Holders or other document
provided or permitted by this Indenture to be made upon,
given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or
any Guarantor or any other obligor on the Securities or a
Senior Representative or holder of Senior Indebtedness shall
be sufficient for every purpose hereunder if in writing and
mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust
Department, or at any other address previously furnished in
writing to the Holders, the Company, any Guarantor or any
other obligor on the Securities or a Senior Representative
or holder of Senior Indebtedness by the Trustee; or
(b) the Company or any Guarantor by the Trustee or
any Holder shall be sufficient for every purpose (except as
provided in Section 501(c)) hereunder if in writing and
mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to the Company or such
Guarantor addressed to it at Canandaigua Wine Company, Inc.,
116 Buffalo Street, Canandaigua, New York 14424, Attention:
General Counsel, or at any other address previously
furnished in writing to the Trustee by the Company.
Section 107. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders
of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to each Holder affected by
such event, at his address as it appears in the Security
Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to
other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by
such Holder. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail
service or by reason of any other cause, it shall be
impracticable to mail notice of any event as required by any
provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice.
Section 108. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or
conflicts with any provision of the Trust Indenture Act or
another provision which is required or deemed to be included
in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust
Indenture Act shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture
as so modified or to be excluded, as the case may be.
Section 109. EFFECT OF HEADINGS AND TABLE OF
CONTENTS.
The Article and Section headings herein and the
Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 110. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by
the Company and the Guarantors shall bind their successors
and assigns, whether so expressed or not.
Section 111. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
Section 112. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person (other than the
parties hereto and their successors hereunder, any Paying
Agent, the Holders and the holders of Senior Indebtedness)
any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 113. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF).
Section 114. LEGAL HOLIDAYS.
In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not
be a Business Day, then (notwithstanding any other provision
of this Indenture or of the Securities) payment of interest
or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity
and no interest shall accrue with respect to such payment
for the period from and after such Interest Payment Date,
Redemption Date, Maturity or Stated Maturity, as the case
may be, to the next succeeding Business Day.
Section 115. SCHEDULES AND EXHIBITS.
All schedules and exhibits attached hereto are by
this reference made a part hereof with the same effect as if
herein set forth in full.
Section 116. COUNTERPARTS.
This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
<PAGE>
ARTICLE TWO
SECURITY FORMS
Section 201. FORMS GENERALLY.
The Securities and the Trustee's certificate of
authentication thereon shall be in substantially the forms set
forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or
permitted by the Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange, any organizational document or governing
instrument or applicable law or as may, consistently herewith, be
determined by the officers executing such Securities, as
evidenced by their execution of the Securities. Any portion of
the text of any Security may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the
Security.
The definitive Securities shall be printed, lithographed
or engraved or produced by any combination of these methods or
may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
Section 202. FORM OF FACE OF SECURITY.
(a) The form of the face of the Securities shall be
substantially as follows:
CANANDAIGUA WINE COMPANY, INC.
8 3/4% SENIOR SUBORDINATED NOTE DUE 2003
No. $
__________ ____________
CANANDAIGUA WINE COMPANY, INC., a Delaware corporation
(herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to or registered
_____________
assigns, the principal sum of United States
_______________
dollars on December 15, 2003, at the office or agency of the
Company referred to below, and to pay interest thereon from
December 27, 1993, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for,
semi-annually on June 15 and December 15, in each year,
commencing June 15, 1994 at the rate of 8 3/4% per annum, in
United States dollars, until the principal hereof is paid or duly
provided for.
The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest,
which shall be June 1 or December 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid, or duly provided
for, and interest on such defaulted interest at the interest rate
borne by the Securities, to the extent lawful, shall forthwith
cease to be payable to the Holder on such Regular Record Date,
and may be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such
defaulted interest to be fixed by the Trustee, notice whereof
shall be given to Holders of Securities not less than 10 days
prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
Payment of the principal of, premium, if any, and
interest on this Security will be made at the office or agency of
the Company maintained for that purpose, in such coin or currency
of the United States of America as at the time of payment is
legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that payment of interest may be made at the option of
the Company by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register.
Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
This Security is entitled to the benefits of Guarantees
by each of the Guarantors of the punctual payment when due of the
Indenture Obligations made in favor of the Trustee for the
benefit of the Holders. Reference is hereby made to Article
Fourteen of the Indenture for a statement of the respective
rights, limitations of rights, duties and obligations under the
Guarantees of each of the Guarantors.
Unless the certificate of authentication hereon has been
duly executed by the Trustee referred to on the reverse hereof or
by the authenticating agent appointed as provided in the
Indenture by manual signature, this Security shall not be
entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed by the manual or facsimile
signature of its authorized officers and its corporate seal to be
affixed or reproduced hereon.
Dated: CANANDAIGUA WINE COMPANY, INC.
By:
____________________________
Attest:
[SEAL]
________________________
Secretary
Section 203. FORM OF REVERSE OF SECURITIES.
(a) The form of the reverse of the Securities
shall be substantially as follows:
This Security is one of a duly authorized
issue of Securities of the Company designated as its 8
3/4% Senior Subordinated Notes due 2003 (herein called
the "Securities"), limited (except as otherwise
provided in the Indenture referred to below) in
aggregate principal amount to $130,000,000, issued
under an indenture (herein called the "Indenture")
dated as of December 27, 1993, among the Company, the
Guarantors and Chemical Bank, as trustee (herein called
the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby
made for a statement of the respective rights,
limitations of rights, duties, obligations and
immunities thereunder of the Company, the Guarantors,
the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Indenture contains provisions for
defeasance at any time of (a) the entire Indebtedness
on the Securities or (b) certain restrictive covenants
and related Defaults and Events of Default, in each
case upon compliance with certain conditions set forth
therein.
The Indebtedness evidenced by the Securities
is, to the extent and in the manner provided in the
Indenture, subordinate and subject in right of payment
to the prior payment in full of all Senior Indebtedness
(as defined in the Indenture), whether Outstanding on
the date of the Indenture or thereafter, and this
Security is issued subject to such provisions. Each
Holder of this Security, by accepting the same,
(a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to
effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose; PROVIDED, HOWEVER,
that, subject to Section 406 of the Indenture, the
Indebtedness evidenced by this Security shall cease to
be so subordinate and subject in right of payment upon
any defeasance of this Security referred to in clause
(a) or (b) of the preceding paragraph.
The Securities are subject to redemption at
any time on or after December 15, 1998, at the option
of the Company, in whole or in part, on not less than
30 nor more than 60 days' prior notice by first-class
mail in amounts of $1,000 or an integral multiple of
$1,000 at the following redemption prices (expressed as
a percentage of the principal amount), redeemed during
the 12-month period beginning December 15 of the years
indicated below:
REDEMPTION
YEAR PRICE
1998......................... 104.375%
1999......................... 102.917%
2000......................... 101.458%
and thereafter at 100% of the principal amount, in each
case, together with accrued and unpaid interest, if
any, to the Redemption Date (subject to the right of
Holders of record on Regular Record Dates to receive
interest due on an Interest Payment Date). If less
than all of the Securities are to be redeemed, the
Trustee shall select the Securities or portions thereof
to be redeemed pro rata, by lot or by any other method
the Trustee shall deem fair and reasonable.
Upon the occurrence of a Change of Control,
each Holder may require the Company to repurchase all
or a portion of such Holder's Securities in an amount
of $1,000 or integral multiples of $1,000, at a
purchase price in cash equal to 101% of the principal
amount thereof, together with accrued and unpaid
interest, if any, to the date of repurchase.
Under certain circumstances, in the event the
Net Cash Proceeds received by the Company from any
Asset Sale, which proceeds are not used to prepay
Senior Indebtedness or invested in properties or assets
used in the businesses of the Company or reasonably
related thereto, exceeds a specified amount the Company
will be required to apply such proceeds to the
repayment of the Securities and certain Indebtedness
ranking PARI PASSU to the Securities.
In the case of any redemption or repurchase of
Securities in accordance with the Indenture, interest
installments whose Stated Maturity is on or prior to
the Redemption Date will be payable to the Holders of
such Securities of record as of the close of business
on the relevant Regular Record Date referred to on the
face hereof. Securities (or portions thereof) for
whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear
interest from and after the date of redemption.
In the event of redemption or repurchase of
this Security in accordance with the Indenture in part
only, a new Security or Securities for the unredeemed
portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be
continuing, the principal amount of all the Securities
may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions
(including certain amendments permitted without the
consent of any Holders) as therein provided, the
amendment thereof and the modification of the rights
and obligations of the Company and the rights of the
Holders under the Indenture and the Guarantees at any
time by the Company and the Trustee with the consent of
the Holders of not less than a majority in aggregate
principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in
aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with
certain provisions of the Indenture and the Guarantees
and certain past Defaults under the Indenture and the
Guarantees and their consequences. Any such consent or
waiver by or on behalf of the Holder of this Security
shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any
Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon
this Security.
No reference herein to the Indenture and no
provision of this Security or of the Indenture shall
alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Securities (in
the event such other obligor is obligated to make
payments in respect of the Securities), which is
absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Security at the
times, place, and rate, and in the coin or currency,
herein prescribed, subject to the subordination
provisions of the Indenture.
The Securities are issuable only in registered
form without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein
set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any
registration of transfer or exchange of Securities, but
the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in
connection therewith.
Prior to and at the time of due presentment of
this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or
the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and
neither the Company, the Trustee nor any agent shall be
affected by notice to the contrary.
All terms used in this Security which are
defined in the Indenture and not otherwise defined
herein shall have the meanings assigned to them in the
Indenture.
Section 204. FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in
the within-mentioned Indenture.
Chemical Bank,
As Trustee
By:
___________________________
Authorized Officer
Section 205. FORM OF GUARANTEE OF EACH OF THE
GUARANTORS.
The form of Guarantee shall be set forth on
the Securities substantially as follows:
GUARANTEES
For value received, each of the undersigned
hereby unconditionally guarantees, jointly and
severally, to the holder of this Security the payment
of principal of, premium, if any, and interest on this
Security upon which these Guarantees are endorsed in
the amounts and at the time when due and payable
whether by declaration thereof, or otherwise, and
interest on the overdue principal and interest, if any,
of this Security, if lawful, and the payment or
performance of all other obligations of the Company
under the Indenture or the Securities, to the holder of
this Security and the Trustee, all in accordance with
and subject to the terms and limitations of this
Security and Article Fourteen of the Indenture. These
Guarantees will not become effective until the Trustee
duly executes the certificate of authentication on this
Security.
The Indebtedness evidenced by these Guarantees
are, to the extent and in the manner provided in the
Indenture, subordinate and subject in right of payment
to the prior payment in full of all Senior Guarantor
Indebtedness (as defined in the Indenture), whether
Outstanding on the date of the Indenture or thereafter,
and these Guarantees are issued subject to such
provisions.
Dated:
__________________
[SEAL] BATAVIA WINE CELLARS, INC.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BISCEGLIA BROTHERS WINE CO.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] CALIFORNIA PRODUCTS COMPANY
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] GUILD WINERIES & DISTILLERIES, INC.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] TENNER BROTHERS, INC.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] WIDMER'S WINE CELLARS, INC.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BARTON INCORPORATED
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BARTON BRANDS, LTD.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BARTON BEERS, LTD.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BARTON BRANDS OF CALIFORNIA,
INC.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BARTON BRANDS OF GEORGIA, INC.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BARTON DISTILLERS IMPORT CORP.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BARTON FINANCIAL CORPORATION
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] STEVENS POINT BEVERAGE CO.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] MONARCH WINE COMPANY, LIMITED
PARTNERSHIP
By: BARTON MANAGEMENT, INC.,
as corporate general
partner
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] BARTON MANAGEMENT, INC.
Attest: By
______________________ ____________________________
Authorized Signature
[SEAL] VINTNERS INTERNATIONAL COMPANY,
INC.
Attest: By
______________________ ____________________________
Authorized Signature
<PAGE>
ARTICLE THREE
THE SECURITIES
Section 301. TITLE AND TERMS.
The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture is limited to
$130,000,000 in principal amount of Securities, except for
Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 303, 304, 305, 306, 906, 1013, 1016 or 1108.
The Securities shall be known and designated as the
"8 3/4% Senior Subordinated Notes due 2003" of the Company. The
Stated Maturity of the Securities shall be December 15, 2003, and
the Securities shall each bear interest at the rate of 8 3/4%
from December 27, 1993 or from the most recent Interest Payment
Date to which interest has been paid, as the case may be, payable
on June 15, 1994 and semi-annually thereafter on June 15 and
December 15, in each year, until the principal thereof is paid or
duly provided for.
The principal of, premium, if any, and interest on the
Securities shall be payable at the office or agency of the
Company maintained for such purpose; PROVIDED, HOWEVER, that at
the option of the Company interest may be paid by check mailed to
addresses of the Persons entitled thereto as such addresses shall
appear on the Security Register.
The Securities shall be redeemable as provided in
Article Eleven and in the Securities.
At the election of the Company, the entire Indebtedness
on the Securities or certain of the Company's obligations and
covenants and certain Events of Default thereunder may be
defeased as provided in Article Four.
The Securities shall be subordinated in right of payment
to Senior Indebtedness as provided in Article Twelve.
Section 302. DENOMINATIONS.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 303. EXECUTION, AUTHENTICATION, DELIVERY AND
DATING.
The Securities shall be executed on behalf of the
Company by one of its Chairman of the Board, its President, its
Chief Operating Officer or one of its Vice Presidents under its
corporate seal reproduced thereon attested by its Secretary or
one of its Assistant Secretaries.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver
Securities executed by the Company to the Trustee with Guarantees
endorsed thereon for authentication, together with a Company
Order for the authentication and delivery of such Securities; and
the Trustee in accordance with such Company Order shall
authenticate and deliver such Securities as provided in this
Indenture and not otherwise.
Each Security shall be dated the date of its
authentication.
No Security or Guarantee endorsed thereon shall be
entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual
signature of an authorized officer, and such certificate upon any
Security shall be conclusive evidence, and the only evidence,
that such Security has been duly authenticated and delivered
hereunder.
In case the Company or any Guarantor, pursuant to
Article Eight, shall be consolidated, merged with or into any
other Person or shall sell, assign, convey, transfer or lease
substantially all of its properties and assets to any Person, and
the successor Person resulting from such consolidation or
surviving such merger, or into which the Company or such
Guarantor shall have been merged, or the Person which shall have
participated in the sale, assignment, conveyance, transfer or
lease as aforesaid, shall have executed an indenture supplemental
hereto with the Trustee pursuant to Article Eight, any of the
Securities authenticated or delivered prior to such
consolidation, merger, sale, assignment, conveyance, transfer or
lease may, from time to time, at the request of the successor
Person, be exchanged for other Securities executed in the name of
the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as
the Securities surrendered for such exchange and of like
principal amount; and the Trustee, upon Company Request of the
successor Person, shall authenticate and deliver Securities as
specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in
any new name of a successor Person pursuant to this Section in
exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the
Holders but without expense to them, shall provide for the
exchange of all Securities at the time Outstanding for Securities
authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent
reasonably acceptable to the Company to authenticate Securities
on behalf of the Trustee. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture
to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any
Security Registrar or Paying Agent to deal with the Company and
its Affiliates.
Section 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the
Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten or otherwise produced, in any
authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such
Securities.
After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive
Securities upon surrender of the temporary Securities at the
office or agency of the Company designated for such purpose
pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations.
Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as
definitive Securities.
Section 305. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.
The Company shall direct the Trustee to keep, so long as
it is the Security Registrar, at the Corporate Trust Office of
the Trustee, or such other office as the Trustee may designate, a
register (the register maintained in such office or in any other
office or agency designated pursuant to Section 1002 being herein
sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as the Security Registrar
may prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee shall
initially be the "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any
Security at the office or agency of the Company designated
pursuant to Section 1002, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities
of the same series of any authorized denomination or
denominations, of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged
for other Securities of any authorized denomination or
denominations, of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities of the same series which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer
or exchange of Securities shall be the valid obligations of the
Company, evidencing the same Indebtedness, and entitled to the
same benefits under this Indenture, as the Securities surrendered
upon such registration of transfer or exchange.
Every Security presented or surrendered for registration
of transfer, or for exchange or redemption shall (if so required
by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made to a Holder for any
registration of transfer or exchange or redemption of Securities,
but the Company may require payment of a sum sufficient to pay
all documentary, stamp or similar issue or transfer taxes or
other governmental charges that may be imposed in connection with
any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 303, 304, 305, 306, 906, 1013,
1016 or 1108 not involving any transfer.
The Company shall not be required (a) to issue, register
the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the mailing
of a notice of redemption of the Securities selected for
redemption under Section 1104 and ending at the close of business
on the day of such mailing, or (b) to register the transfer of or
exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of Securities being redeemed
in part.
Section 306. MUTILATED, DESTROYED, LOST AND STOLEN
SECURITIES.
If (a) any mutilated Security is surrendered to the
Trustee, or (b) the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company, each Guarantor
and the Trustee, such security or indemnity, in each case, as may
be required by them to save each of them harmless, then, in the
absence of notice to the Company, any Guarantor or the Trustee
that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon a Company Request the Trustee
shall authenticate and deliver, in exchange for any such
mutilated Security or in lieu of any such destroyed, lost or
stolen Security, a replacement Security of like tenor and
principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a replacement
Security, pay such Security.
Upon the issuance of any replacement Securities under
this Section, the Company may require the payment of a sum
sufficient to pay all documentary, stamp or similar issue or
transfer taxes or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the
Company and the Guarantors, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
Section 307. PAYMENT OF INTEREST; INTEREST RIGHTS
PRESERVED.
Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security is
registered at the close of business on the Regular Record Date
for such interest payment.
Any interest on any Security which is payable, but is
not punctually paid or duly provided for, on any Interest Payment
Date and interest on such defaulted interest at the then
applicable interest rate borne by the Securities, to the extent
lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the Regular Record Date; and such
Defaulted Interest may be paid by the Company, at its election in
each case, as provided in Subsection (a) or (b) below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities are registered at the close of business on a
Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each
Security and the date (not less than 30 days after such
notice) of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit
of the Persons entitled to such Defaulted Interest as in
this Subsection provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company
in writing of such Special Record Date. In the name and
at the expense of the Company, the Trustee shall cause
notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at
his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities are registered
on such Special Record Date and shall no longer be
payable pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice
as may be required by such exchange, if, after written
notice given by the Company to the Trustee of the
proposed payment pursuant to this Subsection, such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
Section 308. PERSONS DEEMED OWNERS.
The Company, any Guarantor, the Trustee and any agent of
the Company, any Guarantor or the Trustee may treat the Person
in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 307) interest on such
Security and for all other purposes whatsoever, whether or not
such Security is overdue, and neither the Company, any Guarantor,
the Trustee nor any agent of the Company, any Guarantor or the
Trustee shall be affected by notice to the contrary.
Section 309. CANCELLATION.
All Securities surrendered for payment, purchase,
redemption, registration of transfer or exchange shall be
delivered to the Trustee and, if not already cancelled, shall be
promptly cancelled by it. The Company and any Guarantor may at
any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the
Company or such Guarantor may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be
destroyed and certification of their destruction delivered to the
Company unless by a Company Order the Company shall direct that
the cancelled Securities be returned to it. The Trustee shall
provide the Company a list of all Securities that have been
cancelled from time to time as requested by the Company.
Section 310. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.
<PAGE>
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. COMPANY'S OPTION TO EFFECT DEFEASANCE OR
COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution, at
any time, with respect to the Securities, elect to have either
Section 402 or Section 403 be applied to all of the Outstanding
Securities (the "Defeased Securities"), upon compliance with the
conditions set forth below in this Article Four.
Section 402. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 401 of the
option applicable to this Section 402, the Company, each of the
Guarantors and any other obligor upon the Securities, if any,
shall be deemed to have been discharged from its obligations with
respect to the Defeased Securities on the date the conditions set
forth in Section 404 below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the Defeased Securities, which shall
thereafter be deemed to be "Outstanding" only for the purposes of
Section 405 and the other Sections of this Indenture referred to
in (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of
the Company, and, upon written request, shall execute proper
instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Securities to
receive, solely from the trust fund described in Section 404 and
as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such
Securities when such payments are due, (b) the Company's
obligations with respect to such Defeased Securities under
Sections 304, 305, 306, 1002 and 1003, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder,
including, without limitation, the Trustee's rights under Section
606, and (d) this Article Four. Subject to compliance with this
Article Four, the Company may exercise its option under this
Section 402 notwithstanding the prior exercise of its option
under Section 403 with respect to the Securities.
Section 403. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 401 of the
option applicable to this Section 403, the Company and each
Guarantor shall be released from its obligations under any
covenant or provision contained or referred to in Sections 1005
through 1019, inclusive, and the provisions of Article Twelve and
Sections 1416 through 1429 shall not apply, with respect to the
Defeased Securities on and after the date the conditions set
forth in Section 404 below are satisfied (hereinafter, "covenant
defeasance"), and the Defeased Securities shall thereafter be
deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants
and the provisions of Article Twelve and Sections 1416 through
1429, but shall continue to be deemed "Outstanding" for all
other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Defeased Securities,
the Company and each Guarantor may omit to comply with and shall
have no liability in respect of any term, condition or limitation
set forth in any such Section or Article, whether directly or
indirectly, by reason of any reference elsewhere herein to any
such Section or Article or by reason of any reference in any such
Section or Article to any other provision herein or in any other
document and such omission to comply shall not constitute a
Default or an Event of Default under Section 501(c), (d) or (g),
but, except as specified above, the remainder of this Indenture
and such Defeased Securities shall be unaffected thereby.
Section 404. CONDITIONS TO DEFEASANCE OR COVENANT
DEFEASANCE.
The following shall be the conditions to application
of either Section 402 or Section 403 to the Defeased Securities:
(1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 608 who shall agree to
comply with the provisions of this Article Four applicable to it)
as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities,
(a) United States dollars in an amount, or (b) U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms and
with no further reinvestment will provide, not later than one day
before the due date of any payment, money in an amount, or (c) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants or a nationally
recognized investment banking firm expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge the principal of,
premium, if any, and interest on the Defeased Securities on the
Stated Maturity of such principal or installment of principal or
interest (or on any date after December 15, 1998 (such date being
referred to as the "Defeasance Redemption Date") if when
exercising under Section 401 either its option applicable to
Section 402 or its option applicable to Section 403, the Company
shall have delivered to the Trustee an irrevocable notice to
redeem all of the Outstanding Securities on the Defeasance
Redemption Date); PROVIDED that the Trustee shall have been
irrevocably instructed to apply such United States dollars or the
proceeds of such U.S. Government Obligations to said payments
with respect to the Securities; and PROVIDED, FURTHER, that the
United States dollars or U.S. Government Obligations deposited
shall not be subject to the rights of the holders of Senior
Indebtedness and Senior Guarantor Indebtedness pursuant to the
provisions of Article Twelve and Article Fourteen. For this
purpose, "U.S. Government Obligations" means securities that are
(i) direct obligations of the United States of America for the
timely payment of which its full faith and credit is pledged or
(ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any
such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation
held by such custodian for the account of the holder of such
depository receipt, PROVIDED that (except as required by law)
such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such
depository receipt.
(2) In the case of an election under Section 402, the
Company shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States stating that (A) the
Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based
thereon such Opinion of Independent Counsel in the United States
shall confirm that, the holders of the outstanding Securities
will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance had
not occurred.
(3) In the case of an election under Section 403, the
Company shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States to the effect that the
holders of the outstanding Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such
covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not
occurred.
(4) No Default or Event of Default shall have occurred
and be continuing on the date of such deposit or insofar as
subsections 501(h) and (i) are concerned, at any time during the
period ending on the 91st day after the date of deposit.
(5) Such defeasance or covenant defeasance shall not
cause the Trustee for the Securities to have a conflicting
interest with respect to any securities of the Company or any
Guarantor.
(6) Such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default
under, this Indenture or any other material agreement or
instrument to which the Company or any Guarantor is a party or by
which it is bound.
(7) The Company shall have delivered to the Trustee an
Opinion of Independent Counsel to the effect that (A) the trust
funds will not be subject to any rights of holders of Senior
Indebtedness or Senior Guarantor Indebtedness, including, without
limitation, those arising under this Indenture and (B) after the
91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights
generally.
(8) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by
the Company with the intent of preferring the holders of the
Securities or any Guarantee over the other creditors of the
Company or any Guarantor with the intent of defeating, hindering,
delaying or defrauding creditors of the Company, any Guarantor or
others.
(9) No event or condition shall exist that would
prevent the Company from making payments of the principal of,
premium, if any, and interest on the Securities on the date of
such deposit or at any time ending on the 91st day after the date
of such deposit.
(10) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for relating to either the
defeasance under Section 402 or the covenant defeasance under
Section 403 (as the case may be) have been complied with as
contemplated by this Section 404.
Opinions of Counsel required to be delivered under this
Section may have qualifications customary for opinions of the
type required and counsel delivering such Opinions of Counsel may
rely on certificates of the Company or government or other
officials customary for opinions of the type required,
including certificates certifying as to matters of fact,
including that various financial covenants have been complied
with.
Section 405. DEPOSITED MONEY AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of
Section 1003, all United States dollars and U.S. Government
Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee--collectively for purposes
of this Section 405, the "Trustee") pursuant to Section 404 in
respect of the Defeased Securities shall be held in trust and
applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such
money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to Section 404 or
the principal and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account
of the Holders of the Defeased Securities.
Anything in this Article Four to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon Company Request any United States dollars
or U.S. Government Obligations held by it as provided in Section
404 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of
the amount thereof which would then be required to be deposited
to effect defeasance or covenant defeasance.
Section 406. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any
United States dollars or U.S. Government Obligations in
accordance with Section 402 or 403, as the case may be, by
reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and each Guarantor's obligations
under this Indenture and the Securities, and the provisions of
Articles Twelve and Fourteen hereof, shall be revived and
reinstated as though no deposit had occurred pursuant to Section
402 or 403, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such United States dollars
or U.S. Government Obligations in accordance with Section 402 or
403, as the case may be; PROVIDED, HOWEVER, that if the Company
makes any payment to the Trustee or Paying Agent of principal,
premium, if any, or interest on any Security following the
reinstatement of its obligations, the Trustee or Paying Agent
shall promptly pay any such amount to the Holders of the
Securities and the Company shall be subrogated to the rights of
the Holders of such Securities to receive such payment from the
money held by the Trustee or Paying Agent.
<PAGE>
ARTICLE FIVE
REMEDIES
Section 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one
of the following events (whatever the reason for such Event of
Default and whether it shall be occasioned by the provisions of
Article Twelve or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative
or governmental body):
(a) there shall be a default in the payment of any
interest on any Security when it becomes due and payable, and
such default shall continue for a period of 30 days;
(b) there shall be a default in the payment of the
principal of (or premium, if any, on) any Security at its
Maturity (upon acceleration, optional or mandatory redemption,
required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or
breach, of any covenant or agreement of the Company or any
Guarantor under this Indenture (other than a default in the
performance, or breach, of a covenant or agreement which is
specifically dealt with in clauses (a) or (b) or in clauses (ii),
(iii) and (iv) of this clause (c)) and such default or breach
shall continue for a period of 30 days after written notice has
been given, by certified mail, (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the holders of at least
25% in aggregate principal amount of the Outstanding Securities,
specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder;
(ii) there shall be a default in the performance or breach of the
provisions of Article Eight; (iii) the Company shall have failed
to make or consummate an Offer in accordance with the provisions
of Section 1013; or (iv) the Company shall have failed to make or
consummate a Change of Control Offer in accordance with the
provisions of Section 1016;
(d) one or more defaults shall have occurred under any
agreements, indentures or instruments under which the Company,
any Guarantor or any Subsidiary then has outstanding Indebtedness
in excess of $10,000,000 in the aggregate and, if not already
matured at its final maturity in accordance with its terms, such
Indebtedness shall have been accelerated;
(e) any Guarantee shall for any reason cease to be, or
be asserted in writing by any Guarantor or the Company not to be,
in full force and effect and enforceable in accordance with its
terms, except to the extent contemplated by this Indenture and
any such Guarantee;
(f) one or more judgments, orders or decrees for the
payment of money in excess of $5,000,000 either individually or
in the aggregate (net of amounts covered by insurance, bond,
surety or similar instrument), shall be entered against the
Company, any Guarantor, any Subsidiary or any of their respective
properties and shall not be discharged and either (a) any
creditor shall have commenced an enforcement proceeding upon such
judgment, order or decree or (b) there shall have been a period
of 60 consecutive days during which a stay of enforcement of such
judgment or order, by reason of an appeal or otherwise, shall not
be in effect;
(g) any holder or holders of at least $10,000,000 in
aggregate principal amount of Indebtedness of the Company, any
Guarantor or any Subsidiary after a default under such
Indebtedness shall notify the Trustee of the intended sale or
disposition of any assets of the Company, any Guarantor or any
Subsidiary that have been pledged to or for the benefit of such
holder or holders to secure such Indebtedness or shall commence
proceedings, or take any action (including by way of set-off), to
retain in satisfaction of such Indebtedness or to collect on,
seize, dispose of or apply in satisfaction of Indebtedness,
assets of the Company, any Guarantor or any Subsidiary (including
funds on deposit or held pursuant to lock-box and other similar
arrangements);
(h) there shall have been the entry by a court of
competent jurisdiction of (i) a decree or order for relief in
respect of the Company, any Guarantor or any Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy
Law or (ii) a decree or order adjudging the Company, any
Guarantor or any Subsidiary bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company, any Guarantor or any Subsidiary under any
applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company, any Guarantor or any Subsidiary
or of any substantial part of their respective properties, or
ordering the winding up or liquidation of their affairs, and any
such decree or order for relief shall continue to be in effect,
or any such other decree or order shall be unstayed and in
effect, for a period of 60 consecutive days; or
(i) (i) the Company, any Guarantor or any Subsidiary
commences a voluntary case or proceeding under any applicable
Bankruptcy Law or any other case or proceeding to be adjudicated
bankrupt or insolvent, (ii) the Company, any Guarantor or any
Subsidiary consents to the entry of a decree or order for relief
in respect of the Company, any Guarantor or such Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy
Law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, (iii) the Company, any Guarantor or any
Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state
law, (iv) the Company, any Guarantor or any Subsidiary
(1) consents to the filing of such petition or the appointment
of, or taking possession by, a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the
Company, any Guarantor or such Subsidiary or of any substantial
part of their respective properties, (2) makes an assignment for
the benefit of creditors or (3) admits in writing its inability
to pay its debts generally as they become due, or (v) the
Company, any Guarantor or any Subsidiary takes any corporate
action in furtherance of any such actions in this paragraph (i).
The Company shall deliver to the Trustee within five
days after the occurrence thereof, written notice, in the form of
an Officers' Certificate, of any Default, its status and what
action the Company is taking or proposes to take with respect
thereto.
Doc. 3088I
Section 502. ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT.
If an Event of Default (other than an Event of Default
specified in Sections 501(h) and (i)) shall occur and be
continuing, the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Securities Outstanding may, and
the Trustee at the request of the Holders of not less than 25% in
aggregate principal amount of the Securities Outstanding shall,
declare all unpaid principal of, premium, if any, and accrued
interest on all the Securities to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if
given by the Holders of the Securities); PROVIDED that so long as
the Credit Agreement is in effect, such declaration shall not
become effective until the earlier of (a) five Business Days
after receipt of such notice of acceleration from the Holders or
the Trustee by the agent under the Credit Agreement or (b)
acceleration of the Indebtedness under the Credit Agreement.
Thereupon such principal shall become immediately due and
payable, and the Trustee may, at its discretion, proceed to
protect and enforce the rights of the holders of Securities by
appropriate judicial proceeding. If an Event of Default
specified in clause (h) or (i) of Section 501 occurs relating to
the Company, or any Subsidiary and is continuing, then all the
Securities shall IPSO FACTO become and be immediately due and
payable, in an amount equal to the principal amount of the
Securities, together with accrued and unpaid interest, if any, to
the date the Securities become due and payable, without any
declaration or other act on the part of the Trustee or any
Holder. The Trustee or, if notice of acceleration is given by
the Holders, the Holders shall give notice to the agent under the
Credit Agreement of any such acceleration.
At any time after such declaration of acceleration has
been made but before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate
principal amount of the Securities Outstanding, by written notice
to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee
a sum sufficient to pay
(i) all sums paid or advanced by the Trustee under
Section 606 and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel,
(ii) all overdue interest on all Securities, and
(iii) to the extent that payment of such interest
is lawful, interest upon overdue interest at the rate
borne by the Securities;
(b) all Events of Default, other than the non-payment
of principal of the Securities which have become due solely by
such declaration of acceleration, have been cured or waived as
provided in Section 513; and
(c) the rescission will not conflict with any judgment
or decree.
No such rescission shall affect any subsequent Default or impair
any right consequent thereon.
Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE.
The Company and each Guarantor covenant that if
(a) default is made in the payment of any interest on
any Security when such interest becomes due and payable
and such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of
or premium, if any, on any Security at the Stated
Maturity thereof,
the Company and each such Guarantor will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such
Securities, subject to Articles Twelve and Fourteen, the whole
amount then due and payable on such Securities for principal and
premium, if any, and interest, with interest upon the overdue
principal and premium, if any, and, to the extent that payment of
such interest shall be legally enforceable, upon overdue
installments of interest, at the rate borne by the Securities;
and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company or any Guarantor, as the case may be,
fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so
due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any
Guarantor or any other obligor upon the Securities and collect
the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any
Guarantor or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders under this Indenture or the
Guarantees by such appropriate private or judicial proceedings as
the Trustee shall deem most effectual to protect and enforce such
rights, including, seeking recourse against any Guarantor
pursuant to the terms of any Guarantee, whether for the specific
enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein or therein, or to
enforce any other proper remedy, including, without limitation,
seeking recourse against any Guarantor pursuant to the terms of a
Guarantee, or to enforce any other proper remedy, subject however
to Section 512.
Section 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company
or any other obligor, including each Guarantor, upon the
Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether
the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of
principal, and premium, if any, and interest owing and unpaid in
respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(b) subject to Articles Twelve and Fourteen, to collect
and receive any moneys or other property payable or deliverable
on any such claims and to distribute the same;
and any custodian, in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay the Trustee any
amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or
the Securities may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own
name and as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment
has been recovered.
Section 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this
Article or otherwise on behalf of the Holders or the Trustee
pursuant to this Article or through any proceeding or any
arrangement or restructuring in anticipation or in lieu of any
proceeding contemplated by this Article shall be applied, subject
to applicable law, in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such
money on account of principal, premium, if any, or interest, upon
presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee
under Section 606;
SECOND: Subject to Articles Twelve and Fourteen, to the
payment of the amounts then due and unpaid upon the Securities
for principal, premium, if any, and interest, in respect of which
or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to
the amounts due and payable on such Securities for principal,
premium, if any, and interest; and
THIRD: Subject to Articles Twelve and Fourteen, the
balance, if any, to the Person or Persons entitled thereto,
including the Company, provided that all sums due and owing to
the Holders and the Trustee have been paid in full as required by
this Indenture.
Section 507. LIMITATION ON SUITS.
No Holder of any Securities shall have any right to
institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to
the Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in principal
amount of the Outstanding Securities shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
an indemnity satisfactory to the Trustee against the costs,
expenses and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute
any such proceeding; and
(e) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the Outstanding
Securities;
it being understood and intended that no one or more Holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture or any Guarantee to
affect, disturb or prejudice the rights of any other Holders, or
to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture,
except in the manner provided in this Indenture or any Guarantee
and for the equal and ratable benefit of all the Holders.
Section 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture,
but subject to Articles Twelve and Fourteen, the Holder of any
Security shall have the right based on the terms stated herein,
which is absolute and unconditional, to receive payment of the
principal of, premium, if any, and (subject to Section 307)
interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption or
repurchase, on the Redemption Date or the repurchase date) and to
institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder,
subject to Articles Twelve and Fourteen.
Section 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture or
the Guarantees and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the
Trustee or to such Holder, then and in every such case the
Company, each of the Guarantors, any other obligor on the
Securities, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 510. RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to
the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of
any Security to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
Section 512. CONTROL BY HOLDERS.
The Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities shall have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, PROVIDED that
(a) such direction shall not be in conflict with any
rule of law or with this Indenture or any Guarantee, expose the
Trustee to personal liability, or be unduly prejudicial to
Holders not joining therein; and
(b) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction.
Section 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities may on behalf of
the Holders of all the Securities waive any past Default
hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if
any, or interest on any Security; or
(b) in respect of a covenant or a provision hereof
which under Article Nine cannot be modified or amended without
the consent of a higher percentage of the principal amount of the
Outstanding Securities affected.
Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair
any right consequent thereon.
Section 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of
any Security by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of the payment of the principal
of, premium, if any, or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in
the case of redemption, on or after the Redemption Date).
Section 515. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and the Guarantors covenants (to the
extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter
in force, which would prohibit or forgive the Company or any
Guarantor from paying all or any portion of the principal of,
premium, if any, or interest on the Securities contemplated
herein or in the Securities or which may affect the covenants or
the performance of this Indenture; and each of the Company and
the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law
had been enacted.
<PAGE>
ARTICLE SIX
THE TRUSTEE
Section 601. NOTICE OF DEFAULTS.
Within 30 days after the occurrence of any Default, the
Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Security Register, notice of such Default
hereunder known to the Trustee, unless such Default shall have
been cured or waived; PROVIDED, HOWEVER, that, except in the case
of a Default in the payment of the principal of, premium, if any,
or interest on any Security, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of
Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders.
Section 602. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Trust Indenture Act
Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of Indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) the Trustee may consult with counsel and any
written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon in accordance with such advice or Opinion
of Counsel;
(d) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might
be incurred therein or thereby in compliance with such request or
direction;
(e) the Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred
upon it by this Indenture other than any liabilities arising out
of the negligence of the Trustee;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, approval, appraisal, bond,
debenture, note, coupon, security or other paper or document
unless requested in writing to do so by the Holders of not less
than a majority in aggregate principal amount of the Securities
then Outstanding; PROVIDED that, if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation
shall be paid by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Company upon demand;
PROVIDED, FURTHER, the Trustee in its discretion may make such
further inquiry or investigation into such facts or matters as it
may deem fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by
agent or attorney;
(g) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(h) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder; and
(i) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.
Section 603. TRUSTEE NOT RESPONSIBLE FOR RECITALS,
DISPOSITIONS OF SECURITIES OR APPLICATION OF PROCEEDS THEREOF.
The recitals contained herein and in the Securities,
except the Trustee's certificates of authentication, shall be
taken as the statements of the Company, and the Trustee assumes
no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee
represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its
obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied
to the Company are true and accurate subject to the
qualifications set forth therein. The Trustee shall not be
accountable for the use or application by the Company of
Securities or the proceeds thereof.
Section 604. TRUSTEE AND AGENTS MAY HOLD SECURITIES;
COLLECTIONS; ETC.
The Trustee, any Paying Agent, Security Registrar or any
other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities, with the
same rights it would have if it were not the Trustee, Paying
Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with
the Company and receive, collect, hold and retain collections
from the Company with the same rights it would have if it were
not the Trustee, Paying Agent, Security Registrar or such other
agent.
Section 605. MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of
law. Except for funds or securities deposited with the Trustee
pursuant to Article Four, the Trustee may invest all moneys
received by the Trustee, until used or applied as herein
provided, in Temporary Cash Investments in accordance with the
directions of the Company.
Section 606. COMPENSATION AND INDEMNIFICATION OF
TRUSTEE AND ITS PRIOR CLAIM.
The Company covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to,
reasonable compensation for all services rendered by it hereunder
(which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) and the
Company covenants and agrees to pay or reimburse the Trustee and
each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on
behalf of the Trustee in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and
other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence
or bad faith. The Company also covenants and agrees to indemnify
the Trustee and each predecessor Trustee for, and to hold it
harmless against, any loss, liability, tax, assessment or other
governmental charge (other than taxes applicable to the Trustee's
compensation hereunder) or expense incurred without negligence
or bad faith on its part, arising out of or in connection with
the acceptance or administration of this Indenture or the trusts
hereunder and its duties hereunder, including enforcement of this
Section 606 and also including any liability which the Trustee
may incur as a result of failure to withhold, pay or report any
tax, assessment or other governmental charge, and the costs and
expenses of defending itself against or investigating any claim
or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The obligations of the
Company under this Section to compensate and indemnify the
Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute an additional obligation hereunder
and shall survive the satisfaction and discharge of this
Indenture.
As security for the performance of the obligations of
the Company under this Section, the Trustee shall have a lien
prior to the Securities upon all property and funds held or
collected by the Trustee as such, excluding any property or funds
which are held in trust for the holders of Senior Indebtedness
and except funds held in trust for the payment of principal of,
premium, if any, or interest on particular Securities. The
obligations of the Company under this Section shall not be
subordinated to the payment of Senior Indebtedness pursuant to
Article Twelve.
Section 607. CONFLICTING INTERESTS.
The Trustee shall comply with the provisions of Section
310(b) of the Trust Indenture Act.
Section 608. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which
shall be eligible to act as trustee under Trust Indenture Act
Section 310(a)(1) and which shall have a combined capital and
surplus of at least $100,000,000, to the extent there is an
institution eligible and willing to serve. If the Trustee does
not have an office in The City of New York, the Trustee may
appoint an agent in The City of New York reasonably acceptable to
the Company to conduct any activities which the Trustee may be
required under this Indenture to conduct in The City of New York.
If the Trustee does not have an office in The City of New York or
has not appointed an agent in The City of New York, the Trustee
shall be a participant in The Depository Trust Company and FAS
distribution systems. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 609. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR TRUSTEE.
(a) No resignation or removal of the Trustee and no
appointment of a successor trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor trustee under Section 610.
(b) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice
thereof to the Company. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor
trustee by written instrument executed by authority of the Board
of Directors of the Company, a copy of which shall be delivered
to the resigning Trustee and a copy to the successor trustee. If
an instrument of acceptance by a successor trustee shall not have
been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may, or any
Holder who has been a bona fide Holder of a Security for at least
six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper, appoint a
successor trustee.
(c) The Trustee may be removed at any time by an
Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of Trust Indenture Act Section 310(b) after
written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under
Section 608 and shall fail to resign after written
request therefor by the Company or by any such Holder,
or
(3) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or
liquidation,
then, in any case, (i) the Company by a Board Resolution may
remove the Trustee, or (ii) subject to Section 514, the Holder of
any Security who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint
a successor trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor trustee. If, within one year after
such resignation, removal or incapability, or the occurrence of
such vacancy, a successor trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee.
Such successor trustee so appointed shall forthwith upon its
acceptance of such appointment become the successor trustee and
supersede the successor trustee appointed by the Company. If no
successor trustee shall have been so appointed by the Company or
the Holders of the Securities and accepted appointment in the
manner hereinafter provided, the Holder of any Security who has
been a bona fide Holder for at least six months may, subject to
Section 514, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor trustee.
(f) The Company shall give notice of each resignation
and each removal of the Trustee and each appointment of a
successor trustee by mailing written notice of such event by
first-class mail, postage prepaid, to the Holders of Securities
as their names and addresses appear in the Security Register.
Each notice shall include the name of the successor trustee and
the address of its Corporate Trust Office and any agent
hereunder.
Section 610. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee as if
originally named as Trustee hereunder; but, nevertheless, on the
written request of the Company or the successor trustee, upon
payment of its charges then unpaid, such retiring Trustee shall,
pay over to the successor trustee all moneys at the time held by
it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers,
duties and obligations. Upon request of any such successor
trustee, the Company shall execute any and all instruments for
more fully and certainly vesting in and confirming to such
successor trustee all such rights and powers. Any Trustee
ceasing to act shall, nevertheless, retain a prior lien upon all
property or funds held or collected by such Trustee or such
successor trustee to secure any amounts then due such Trustee
pursuant to the provisions of Section 606.
No successor trustee with respect to the Securities
shall accept appointment as provided in this Section 610 unless
at the time of such acceptance such successor trustee shall be
eligible to act as trustee under the provisions of Trust
Indenture Act Section 310(a) and this Article Sixth and shall
have a combined capital and surplus of at least $100,000,000 and
have a Corporate Trust Office or an agent selected in accordance
with Section 608.
Upon acceptance of appointment by any successor trustee
as provided in this Section 610, the Company shall give notice
thereof to the Holders of the Securities, by mailing such notice
to such Holders at their addresses as they shall appear on the
Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with
the notice called for by Section 609. If the Company fails to
give such notice within 10 days after acceptance of appointment
by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 611. MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided such corporation shall be
eligible under Trust Indenture Act Section 310(a) and this
Article Sixth and shall have a combined capital and surplus of at
least $100,000,000 and have a Corporate Trust Office or an agent
selected in accordance with Section 608 without the execution or
filing of any paper or any further act on the part of any of the
parties hereto.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the
Securities shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the
Securities shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name
of any predecessor hereunder or in the name of the successor
trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall
have; PROVIDED that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, amalgamation,
conversion or consolidation.
Section 612. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY.
If and when the Trustee shall be or become a creditor of
the Company (or other obligor under the Securities), the Trustee
shall be subject to the provisions of the Trust Indenture Act
regarding the collection of claims against the Company (or any
such other obligor). A Trustee who has resigned or been removed
shall be subject to the Trust Indenture Act Section 311(a) to the
extent indicated therein.
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND
ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not more than 15 days after each
Regular Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as
of such Regular Record Date; and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Company of any such
request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished;
PROVIDED, HOWEVER, that if and so long as the Trustee shall be
the Security Registrar, no such list need be furnished.
Section 702. DISCLOSURE OF NAMES AND ADDRESSES OF
HOLDERS.
Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the
Company nor the Trustee or any agent of either of them shall be
held accountable by reason of the disclosure of any information
as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from
which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material
pursuant to a request made under Trust Indenture Act Section 312.
Section 703. REPORTS BY TRUSTEE.
Within 60 days after May 15 of each year commencing with
the first May 15 after the first issuance of Securities, the
Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Security Register, as provided in Trust
Indenture Act Section 313(c), a brief report dated as of such
May 15 in accordance with and to the extent required by Trust
Indenture Act Section 313(a).
Section 704. REPORTS BY COMPANY AND GUARANTORS.
The Company, and any Guarantor shall:
(a) file with the Trustee, within 30 days after the
Company or any Guarantor, as the case may be, is required to file
the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company or
any Guarantor may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company, or any Guarantor, as the case may be, is not
required to file information, documents or reports pursuant to
either of said Sections, then it shall file with the Trustee and
the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports
which may be required pursuant to Section 13 of the Exchange Act
in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in
such rules and regulations;
(b) file with the Trustee and the Commission, in
accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents
and reports with respect to compliance by the Company or any
Guarantor, as the case may be, with the conditions and covenants
of this Indenture as may be required from time to time by such
rules and regulations; and
(c) transmit or cause to be transmitted by mail to all
Holders, as their names and addresses appear in the Security
Register, within 30 days after the filing thereof with the
Trustee, in the manner and to the extent provided in Trust
Indenture Act Section 313(c), such summaries of any information,
documents and reports required to by filed by the Company or any
Guarantor, as the case may be, pursuant to Subsections (a) and
(b) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
<PAGE>
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. COMPANY OR ANY GUARANTOR MAY CONSOLIDATE,
ETC., ONLY ON CERTAIN TERMS.
(a) The Company shall not, in a single transaction or
through a series of related transactions, consolidate with or
merge with or into any other Person or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all
of its properties and assets as an entirety to any Person or
group of affiliated Persons, or permit any of its Subsidiaries to
enter into any such transaction or transactions if such
transaction or transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or disposal of all
or substantially all of the properties and assets of the Company
and its Subsidiaries on a Consolidated basis to any other Person
or group of affiliated Persons, unless at the time and after
giving effect thereto:
(i) either (a) the Company shall be the continuing
corporation, or (b) the Person (if other than the
Company) formed by such consolidation or into which the
Company is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition
of all or substantially all of the properties and assets
of the Company and its Subsidiaries on a Consolidated
basis (the "Surviving Entity") shall be a corporation
duly organized and validly existing under the laws of
the United States of America, any state thereof or the
District of Columbia and such Person assumes, by a
supplemental indenture in a form reasonably satisfactory
to the Trustee, all the obligations of the Company under
the Securities and this Indenture, and this Indenture
shall remain in full force and effect;
(ii) immediately before and immediately after
giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such
transaction on a PRO FORMA basis, the Consolidated Net
Worth of the Company (or the Surviving Entity if the
Company is not the continuing obligor under this
Indenture) is equal to or greater than the Consolidated
Net Worth of the Company immediately prior to such
transaction;
(iv) immediately before and immediately after
giving effect to such transaction on a PRO FORMA basis
(on the assumption that the transaction occurred on the
first day of the four-quarter period immediately prior
to the consummation of such transaction with the
appropriate adjustments with respect to the transaction
being included in such PRO FORMA calculation), the
Company (or the Surviving Entity if the Company is not
the continuing obligor under this Indenture) could incur
$1.00 of additional Indebtedness under Section 1008
(other than Permitted Indebtedness);
(v) each Guarantor, if any, unless it is the other
party to the transactions described above, shall have by
supplemental indenture confirmed that its Guarantee
shall apply to such Person's obligations under this
Indenture and the Securities;
(vi) if any of the property or assets of the
Company or any of its Subsidiaries would thereupon
become subject to any Lien, the provisions of Section
1012 are complied with; and
(vii) the Company or the Surviving Entity shall
have delivered, or caused to be delivered, to the
Trustee, in form and substance reasonably satisfactory
to the Trustee, an Officers' Certificate and an Opinion
of Counsel, each to the effect that such consolidation,
merger, transfer, sale, assignment, conveyance, lease or
other transaction and the supplemental indenture in
respect thereto comply with this Indenture and that all
conditions precedent herein provided for relating to
such transaction have been complied with.
(b) Each Guarantor shall not, and the Company will not
permit a Guarantor to, in a single transaction or through a
series of related transactions merge or consolidate with or into
any other corporation (other than the Company or any other
Guarantor) or other entity, or sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of its
properties and assets on a Consolidated basis to any entity
(other than the Company or any other Guarantor) unless at the
time and after giving effect thereto:
(i) either (1) such Guarantor shall be the
continuing corporation or partnership or (2) the entity
(if other than such Guarantor) formed by such
consolidation or into which such Guarantor is merged or
the entity which acquires by sale, assignment,
conveyance, transfer, lease or disposition the
properties and assets of such Guarantor shall be a
corporation duly organized and validly existing under
the laws of the United States, any state thereof or the
District of Columbia and shall expressly assume by an
indenture supplemental hereto, executed and delivered to
the Trustee, in a form reasonably satisfactory to the
Trustee, all the obligations of such Guarantor under its
Guarantee and this Indenture;
(ii) immediately before and immediately after
giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing; and
(iii) such Guarantor shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel in form and substance reasonably satisfactory to
the Trustee, each stating that such consolidation,
merger, sale, assignment, conveyance, transfer, lease or
disposition and such supplemental indenture comply with
this Indenture, and thereafter all obligations of the
predecessor shall terminate.
The provisions of this Section 801(b) shall not apply to any
transaction (including any Asset Sale made in accordance with
Section 1013) with respect to any Guarantor if the Guarantee of
such Guarantor is released in connection with such transaction in
accordance with Section 1014(c) and Section 1414.
Section 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company or
any Guarantor in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company or
such Guarantor, as the case may be, is merged or the successor
Person to which such sale, assignment, conveyance, transfer,
lease or disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company or
such Guarantor, as the case may be, under this Indenture in the
Securities and/or the Guarantees, as the case may be, with the
same effect as if such successor had been named as the Company or
such Guarantor, as the case may be, herein in the Securities
and/or in the Guarantees, as the case may be. When a successor
assumes all the obligations of its predecessor under this
Indenture, the Securities or a Guarantee, as the case may be, the
predecessor shall be released from those obligations; PROVIDED
that in the case of a transfer by lease, the predecessor shall
not be released from the payment of principal and interest on the
Securities or a Guarantee, as the case may be.
<PAGE>
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. SUPPLEMENTAL INDENTURES AND AGREEMENTS
WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the
Guarantors, if any, when authorized by a Board Resolution, and
the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto or agreements or other
instruments with respect to any Guarantee, in form and substance
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company, any Guarantor or any other obligor upon the Securities,
and the assumption by any such successor of the covenants of the
Company or such Guarantor or obligor herein and in the Securities
and in any Guarantee;
(b) to add to the covenants of the Company, any
Guarantor or any other obligor upon the Securities for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company, any Guarantor or any other obligor
upon the Securities, as applicable, herein, in the Securities or
in any Guarantee;
(c) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any
other provision herein, in the Securities or in any Guarantee, or
to make any other provisions with respect to matters or questions
arising under this Indenture, the Securities or any Guarantee;
PROVIDED that, in each case, such provisions shall not adversely
affect the interests of the Holders;
(d) to comply with the requirements of the Commission
in order to effect or maintain the qualification of this
Indenture under the Trust Indenture Act, as contemplated by
Section 905 or otherwise;
(e) to add a Guarantor pursuant to the requirements of
Section 1014;
(f) to evidence and provide the acceptance of the
appointment of a successor trustee hereunder; or
(g) to mortgage, pledge, hypothecate or grant a
security interest in favor of the Trustee for the benefit of the
Holders as additional security for the payment and performance of
the Indenture Obligations, in any property or assets, including
any which are required to be mortgaged, pledged or hypothecated,
or in which a security interest is required to be granted to the
Trustee pursuant to this Indenture or otherwise.
Section 902. SUPPLEMENTAL INDENTURES AND AGREEMENTS
WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding
Securities, by Act of said Holders delivered to the Company, each
Guarantor, if any, and the Trustee, the Company and each
Guarantor (if a party thereto) when authorized by a Board
Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto or agreements or other instruments
with respect to any Guarantee in form and substance satisfactory
to the Trustee, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the
Holders under this Indenture, the Securities or any Guarantee;
PROVIDED, HOWEVER, that no such supplemental indenture, agreement
or instrument shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or
any installment of interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or change the coin
or currency in which the principal of any Security or any premium
or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption,
on or after the Redemption Date);
(b) amend, change or modify the obligation of the
Company to make and consummate an Offer with respect to any Asset
Sale or Asset Sales in accordance with Section 1013 or the
obligation of the Company to make and consummate a Change of
Control Offer in the event of a Change of Control in accordance
with Section 1016, including amending, changing or modifying any
definitions with respect thereto;
(c) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose
Holders is required for any waiver or compliance with certain
provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture or with respect
to any Guarantee;
(d) modify any of the provisions of this Section or
Sections 513 or 1021, except to increase any such percentage or
to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each
Security affected thereby;
(e) except as otherwise permitted under Article Eight,
consent to the assignment or transfer by the Company or any
Guarantor of any of its rights and obligations under this
Indenture; or
(f) amend or modify any of the provisions of this
Indenture relating to the subordination of the Securities or any
Guarantee in any manner adverse to the Holders of the Securities
or any Guarantee.
Upon the written request of the Company and each
Guarantor, if any, accompanied by a copy of a Board Resolution
authorizing the execution of any such supplemental indenture or
Guarantee, and upon the filing with the Trustee of evidence of
the consent of Holders as aforesaid, the Trustee shall join with
the Company and each Guarantor in the execution of such
supplemental indenture or Guarantee.
It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental indenture or Guarantee or agreement or instrument
relating to any Guarantee, but it shall be sufficient if such Act
shall approve the substance thereof.
Section 903. EXECUTION OF SUPPLEMENTAL INDENTURES AND
AGREEMENTS.
In executing, or accepting the additional trusts created
by, any supplemental indenture, agreement or instrument permitted
by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Trust Indenture Act Section 315(a)
through 315(d) and Section 602 hereof) shall be fully protected
in relying upon, an Opinion of Counsel and an Officers'
Certificate stating that the execution of such supplemental
indenture, agreement or instrument is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture, agreement or
instrument which affects the Trustee's own rights, duties or
immunities under this Indenture, any Guarantee or otherwise.
Section 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to the
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.
Section 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES.
Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article
may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and each
Guarantor and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
Section 907. EFFECT ON SENIOR INDEBTEDNESS.
No supplemental indenture shall adversely affect the
rights under Articles Twelve and Fourteen, or any definitions or
provisions related thereto, or the Guarantees of any holder of
Senior Indebtedness or Senior Guarantor Indebtedness unless the
requisite holders of each issue of Senior Indebtedness or Senior
Guarantor Indebtedness affected thereby shall have consented to
such supplemental indenture.
<PAGE>
ARTICLE TEN
COVENANTS
Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND
INTEREST.
Subject to the provisions of Articles Twelve and
Fourteen, the Company will duly and punctually pay the principal
of, premium, if any, and interest on the Securities in accordance
with the terms of the Securities and this Indenture.
Section 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain an office or agency where
Securities may be presented or surrendered for payment. The
Company also will maintain in The City of New York an office or
agency where Securities may be surrendered for registration of
transfer, redemption or exchange and where notices and demands to
or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written
notice to the Trustee of the location and any change in the
location of any such offices or agencies. If at any time the
Company shall fail to maintain any such required offices or
agencies or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may
be made or served at the office of the agent of the Trustee
described above and the Company hereby appoints such agent as its
agent to receive all such presentations, surrenders, notices and
demands.
The Company may from time to time designate one or more
other offices or agencies (in or outside of The City of
New York) where the Securities may be presented or surrendered
for any or all such purposes, and may from time to time rescind
such designation. The Company will give prompt written notice to
the Trustee of any such designation or rescission and any change
in the location of any such office or agency.
Section 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN
TRUST.
If the Company shall at any time act as its own Paying
Agent, it will, on or before each due date of the principal of,
premium, if any, or interest on any of the Securities, segregate
and hold in trust for the benefit of the Holders entitled thereto
a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the
Company will, on or before each due date of the principal of,
premium, if any, or interest on, any Securities, deposit with a
Paying Agent a sum in same day funds sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum
to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the
Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the
Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the
principal of, premium, if any, or interest on Securities in trust
for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Trustee notice of any Default by the
Company or any Guarantor (or any other obligor upon the
Securities) in the making of any payment of principal, premium,
if any, or interest;
(c) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay
to the Trustee all sums so held in trust by such Paying Agent;
and
(d) acknowledge, accept and agree to comply in all
aspects with the provisions of this Indenture relating to the
duties, rights and disabilities of such Paying Agent.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of
the principal of, premium, if any, or interest on any Security
and remaining unclaimed for two years after such principal and
premium, if any, or interest has become due and payable shall
promptly be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVEr, that the
Trustee or such Paying Agent, before being required to make any
such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal
(national edition), and mail to each such Holder, notice that
such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of
such notification, publication and mailing, any unclaimed balance
of such money then remaining will promptly be repaid to the
Company.
Section 1004. CORPORATE EXISTENCE.
Subject to Article Eight, the Company will do or cause
to be done all things necessary to preserve and keep in full
force and effect the corporate existence and related rights and
franchises (charter and statutory) of the Company and each
Subsidiary; PROVIDED, HOWEVER, that the Company shall not be
required to preserve any such right or franchise or the corporate
existence of any such Subsidiary if the Board of Directors of the
Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company
and its Subsidiaries as a whole and that the loss thereof would
not reasonably be expected to have a material adverse effect on
the ability of the Company to perform its obligations hereunder;
and PROVIDED, FURTHER, HOWEVER, that the foregoing shall not
prohibit a sale, transfer or conveyance of a Subsidiary or any of
its assets in compliance with the terms of this Indenture.
Section 1005. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, on or before the date the same shall become due and
payable, (a) all taxes, assessments and governmental charges
levied or imposed upon the Company or any Subsidiary shown to be
due on any return of the Company or any Subsidiary or otherwise
assessed or upon the income, profits or property of the Company
or any Subsidiary if failure to pay or discharge the same could
reasonably be expected to have a material adverse effect on the
ability of the Company or any Guarantor to perform its
obligations hereunder and (b) all lawful claims for labor,
materials and supplies, which, if unpaid, would by law become a
Lien upon the property of the Company or any Subsidiary, except
for any Lien permitted to be incurred under Section 1012 if
failure to pay or discharge the same could reasonably be expected
to have a material adverse effect on the ability of the Company
or any Guarantor to perform its obligations hereunder; PROVIDED,
HOWEVER, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and in
respect of which appropriate reserves (in the good faith judgment
of management of the Company) are being maintained in accordance
with GAAP consistently applied.
Section 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all material properties owned by
the Company or any Subsidiary or used or held for use in the
conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order
(ordinary wear and tear excepted) and supplied with all necessary
equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all
as in the judgment of the Company may be consistent with sound
business practice and necessary so that the business carried on
in connection therewith may be properly conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section shall prevent the
Company from discontinuing the maintenance of any of such
properties if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business or the
business of any Subsidiary and not reasonably expected to have a
material adverse effect on the ability of the Company to perform
its obligations hereunder.
Section 1007. INSURANCE.
The Company will at all times keep all of its and its
Subsidiaries' properties which are of an insurable nature insured
with insurers, believed by the Company to be responsible, against
loss or damage to the extent that property of similar character
is usually so insured by corporations similarly situated and
owning like properties.
Section 1008. LIMITATION ON INDEBTEDNESS.
(a) The Company will not, and will not permit any of
its Subsidiaries to, create, issue, assume, guarantee, or
otherwise in any manner become directly or indirectly liable for
or with respect to or otherwise incur (collectively, "incur") any
Indebtedness (including any Acquired Indebtedness), except that
the Company and any Guarantor may incur Indebtedness (including
any Acquired Indebtedness) and any Subsidiary that is not a
Guarantor may incur Acquired Indebtedness if, in each case, the
Consolidated Fixed Charge Coverage Ratio for the Company for the
four full fiscal quarters immediately preceding the incurrence of
such Indebtedness taken as one period (and after giving PRO FORMA
effect to (i) the incurrence of such Indebtedness and (if
applicable) the application of the net proceeds therefrom,
including to refinance other Indebtedness, as if such
Indebtedness was incurred, and the application of such proceeds
occurred, at the beginning of such four-quarter period; (ii) the
incurrence, repayment or retirement of any other Indebtedness by
the Company and its Subsidiaries since the first day of such
four-quarter period as if such Indebtedness was incurred, repaid
or retired at the beginning of such four-quarter period (except
that, in making such computation, the amount of Indebtedness
under any revolving credit facility shall be computed based upon
the average daily balance of such Indebtedness during such
four-quarter period); (iii) in the case of Acquired Indebtedness,
the related acquisition as if such acquisition occurred at the
beginning of such four-quarter period; and (iv) any acquisition
or disposition by the Company and its Subsidiaries of any company
or any business or any assets out of the ordinary course of
business, whether by merger, stock purchase or sale or asset
purchase or sale, as if such acquisition or disposition occurred
at the beginning of such four-quarter period or any related
repayment of Indebtedness, in each case since the first day of
such four-quarter period, assuming such acquisition or
disposition had been consummated on the first day of such
four-quarter period) is at least equal to 2.25:1.00.
(b) The foregoing limitation will not apply to the
incurrence of any of the following (collectively "Permitted
Indebtedness"):
(i) Indebtedness of the Company and any Subsidiary
under the Credit Agreement in an aggregate principal amount at
any one time outstanding not to exceed (x) $50,000,000 under any
term loans made pursuant thereto, minus all principal payments
made in respect of any term loans, (y) $100,000,000 under any
revolving credit facility thereunder and (z) $28,200,000 of
"Letter of Credit Liabilities" (as defined in the Credit
Agreement as in effect on the date of this Indenture) in respect
to the Barton Letter of Credit, less any reduction on such
"Letter of Credit Liabilities" (whether through payments or
reductions of the face amount of the Barton Letter of Credit);
(ii) Indebtedness of the Company pursuant to the
Securities and Indebtedness of any Guarantor pursuant to a
Guarantee;
(iii) Indebtedness of the Company or any
Subsidiary outstanding on the date of this Indenture and listed
on Schedule I hereto;
(iv) Indebtedness of the Company owing to a
Subsidiary; PROVIDED that any Indebtedness of the Company owing
to a Subsidiary that is not a Guarantor is made pursuant to an
intercompany note in the form attached to this Indenture as
Exhibit A and is subordinated in right of payment from and after
such time as the Securities shall become due and payable (whether
at Stated Maturity, acceleration or otherwise) to the payment and
performance of the Company's obligations under the Securities;
PROVIDED FURTHER that any disposition, pledge or transfer of any
such Indebtedness to a Person (other than a disposition, pledge
or transfer to a Subsidiary or a pledge to or for the benefit of
the lenders under the Credit Agreement) shall be deemed to be an
incurrence of such Indebtedness by the obligor not permitted by
this clause (iv);
(v) Indebtedness of a Wholly Owned Subsidiary owing to
the Company or another Wholly Owned Subsidiary; PROVIDED that,
with respect to Indebtedness owing to a Wholly Owned Subsidiary
that is not a Guarantor, (x) any such Indebtedness is made
pursuant to an intercompany note in the form attached to this
Indenture as Exhibit A and (y) any such Indebtedness shall be
subordinated in right of payment from and after such time as the
obligations under the Guarantee by such Wholly Owned Subsidiary
shall become due and payable to the payment and performance of
such Wholly Owned Subsidiary's obligations under its Guarantee;
PROVIDED FURTHER that (a) any disposition, pledge or transfer of
any such Indebtedness to a Person (other than a disposition,
pledge or transfer to the Company or a Wholly Owned Subsidiary or
a pledge to or for the benefit of the lenders under the Credit
Agreement) shall be deemed to be an incurrence of such
Indebtedness by the obligor not permitted by this clause (v), and
(b) any transaction pursuant to which any Wholly Owned
Subsidiary, which has Indebtedness owing to the Company or any
other Wholly Owned Subsidiary, ceases to be a Wholly Owned
Subsidiary shall be deemed to be the incurrence of Indebtedness
by such Wholly Owned Subsidiary that is not permitted by this
clause (v);
(vi) guarantees of any Subsidiary made in
accordance with the provisions of Section 1014 of this Indenture;
(vii) obligations of the Company entered into in
the ordinary course of business pursuant to Interest Rate
Agreements designed to protect the Company or any Subsidiary
against fluctuations in interest rates in respect of Indebtedness
of the Company or any of its Subsidiaries, as long as such
obligations at the time incurred do not exceed the aggregate
principal amount of such Indebtedness then outstanding or in good
faith anticipated to be outstanding within 90 days of such
incurrence;
(viii) any renewals, extensions, substitutions,
refundings, refinancings or replacements (collectively, a
"refinancing") of any Indebtedness described in clauses (ii) and
(iii) of this definition of "Permitted Indebtedness," including
any successive refinancings so long as the aggregate principal
amount of Indebtedness represented thereby is not increased by
such refinancing plus the lesser of (I) the stated amount of any
premium, interest or other payment required to be paid in
connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (II) the amount of premium,
interest or other payment actually paid at such time to refinance
the Indebtedness, plus, in either case, the amount of expenses of
the Company incurred in connection with such refinancing and, in
the case of Pari Passu or Subordinated Indebtedness, such
refinancing does not reduce the Average Life to Stated Maturity
or the Stated Maturity of such Indebtedness; and
(ix) Indebtedness, in addition to that described
in clauses (i) through (viii) of this definition of "Permitted
Indebtedness," and any renewals, extensions, substitutions,
refinancings or replacements of such Indebtedness, not to exceed
$25,000,000 outstanding at any one time in the aggregate.
Section 1009. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company will not, and will not permit any
Subsidiary to, directly or indirectly:
(i) declare or pay any dividend on, or make
any distribution to holders of, any shares of the
Company's Capital Stock (other than dividends or
distributions payable solely in shares of its Qualified
Capital Stock or in options, warrants or other rights to
acquire such Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or
retire for value, directly or indirectly, any shares of
the Capital Stock of the Company or any Affiliate
thereof (other than any Wholly Owned Subsidiary of the
Company) or options, warrants or other rights to acquire
such Capital Stock;
(iii) make any principal payment on, or
repurchase, redeem, defease, retire or otherwise acquire
for value, prior to any scheduled principal payment,
sinking fund or maturity, any Pari Passu Indebtedness or
Subordinated Indebtedness;
(iv) declare or pay any dividend or
distribution on any Capital Stock of any Subsidiary to
any Person (other than the Company or any of its Wholly
Owned Subsidiaries) or purchase, redeem or otherwise
acquire or retire for value any Capital Stock of any
Subsidiary held by any Person (other than the Company or
any of its Wholly Owned Subsidiaries);
(v) incur, create or assume any guarantee of
Indebtedness of any Affiliate (other than a Wholly Owned
Subsidiary of the Company); or
(vi) make any Investment in any Person (other
than any Permitted Investments);
(any of the foregoing payments described in clauses (i) through
(vi), other than any such action that is a Permitted Payment,
collectively, "Restricted Payments") unless after giving effect
to the proposed Restricted Payment (the amount of any such
Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be
conclusive and evidenced by a Board Resolution), (1) no Default
or Event of Default shall have occurred and be continuing and
such Restricted Payment shall not be an event which is, or after
notice or lapse of time or both, would be, an "event of default"
under the terms of any Indebtedness of the Company or its
Subsidiaries; (2) immediately before and immediately after giving
effect to such transaction on a PRO FORMA basis, the Company
could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the provisions contained in Section
1008; and (3) the aggregate amount of all such Restricted
Payments declared or made after the date of this Indenture does
not exceed the sum of:
(A) 50% of the aggregate cumulative Consolidated Net
Income of the Company accrued on a cumulative basis during the
period beginning on the first day of the Company's fiscal quarter
commencing prior to the date of this Indenture and ending on the
last day of the Company's last fiscal quarter ending prior to the
date of the Restricted Payment (or, if such aggregate cumulative
Consolidated Net Income shall be a loss, minus 100% of such
loss);
(B) the aggregate Net Cash Proceeds received after the
date of this Indenture by the Company from the issuance or sale
(other than to any of its Subsidiaries) of its shares of
Qualified Capital Stock or any options, warrants or rights to
purchase such shares of Qualified Capital Stock of the Company
(except, in each case, to the extent such proceeds are used to
purchase, redeem or otherwise retire Capital Stock or
Subordinated Indebtedness as set forth below);
(C) the aggregate Net Cash Proceeds received after the
date of this Indenture by the Company (other than from any of its
Subsidiaries) upon the exercise of any options or warrants to
purchase shares of Qualified Capital Stock of the Company; and
(D) the aggregate Net Cash Proceeds received after the
date of this Indenture by the Company from debt securities or
Redeemable Capital Stock that have been converted into or
exchanged for Qualified Capital Stock of the Company to the
extent such debt securities or Redeemable Capital Stock are
originally sold for cash plus the aggregate Net Cash Proceeds
received by the Company at the time of such conversion or
exchange.
(b) Notwithstanding the foregoing, and in the case of
clauses (ii), (iii) and (iv) below, so long as there is no
Default or Event of Default continuing, the foregoing provisions
shall not prohibit the following actions (clauses (i) through
(iv) being referred to as "Permitted Payment"):
(i) the payment of any dividend within 60 days
after the date of declaration thereof, if at such date of
declaration such payment would be permitted by the provisions of
paragraph (a) of this Section and such payment shall be deemed to
have been paid on such date of declaration for purposes of the
calculation required by paragraph (a) of this Section;
(ii) the repurchase, redemption, or other
acquisition or retirement of any shares of any class of Capital
Stock of the Company in exchange for (including any such exchange
pursuant to the exercise of a conversion right or privilege in
connection therewith cash is paid in lieu of the issuance of
fractional shares or scrip), or out of the Net Cash Proceeds of,
a substantially concurrent issue and sale for cash (other than to
a Subsidiary) of other shares of Qualified Capital Stock of the
Company; PROVIDED that the Net Cash Proceeds from the issuance of
such shares of Qualified Capital Stock are excluded from clause
(3)(B) of paragraph (a) of this Section;
(iii) any repurchase, redemption, defeasance,
retirement, refinancing or acquisition for value or payment of
principal of any Subordinated Indebtedness in exchange for, or
out of the net proceeds of, a substantially concurrent issuance
and sale for cash (other than to any Subsidiary of the Company)
of any Qualified Capital Stock of the Company, PROVIDED that the
Net Cash Proceeds from the issuance of such shares of Qualified
Capital Stock are excluded from clause (3)(B) of paragraph (a) of
this Section; and
(iv) the repurchase, redemption, defeasance,
retirement, refinancing or acquisition for value or payment of
principal of any Subordinated Indebtedness (other than Redeemable
Capital Stock) (a "refinancing") through the issuance of new
Subordinated Indebtedness of the Company, PROVIDED that any such
new Subordinated Indebtedness (1) shall be in a principal amount
that does not exceed the principal amount so refinanced (or, if
such Subordinated Indebtedness provides for an amount less than
the principal amount thereof to be due and payable upon a
declaration or acceleration thereof, then such lesser amount as
of the date of determination), plus the lesser of (I) the stated
amount of any premium, interest or other payment required to be
paid in connection with such a refinancing pursuant to the terms
of the Indebtedness being refinanced or (II) the amount of
premium, interest or other payment actually paid at such time to
refinance the Indebtedness, plus, in either case, the amount of
expenses of the Company incurred in connection with such
refinancing; (2) has an Average Life to Stated Maturity greater
than the remaining Average Life to Stated Maturity of the
Securities; (3) has a Stated Maturity for its final scheduled
principal payment later than the Stated Maturity for the final
scheduled principal payment of the Securities; and (4) is
expressly subordinated in right of payment to the Securities at
least to the same extent as the Indebtedness to be refinanced.
Section 1010. LIMITATION ON TRANSACTIONS WITH
AFFILIATES.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into or suffer to
exist any transaction or series of related transactions
(including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with any Affiliate of the
Company (other than the Company or a Wholly Owned Subsidiary)
unless (i) such transaction or series of transactions is in
writing on terms that are no less favorable to the Company or
such Subsidiary, as the case may be, than would be available in a
comparable transaction in arm's-length dealings with an unrelated
third party, (ii) with respect to any transaction or series of
transactions involving aggregate payments in excess of
$5,000,000, the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of related
transactions complies with clause (i) above and such transaction
or series of related transactions has been approved by the Board
of Directors of the Company, and (iii) with respect to a
transaction or series of related transactions involving aggregate
value in excess of $10,000,000, the Company delivers to the
Trustee an opinion of an independent investment banking firm of
national standing stating that the transaction or series of
transactions is fair to the Company or such Subsidiary; PROVIDED,
HOWEVER, that this provision shall not apply to any transaction
with an officer or director of the Company entered into in the
ordinary course of business (including compensation or employee
benefit arrangements with any officer or director of the
Company).
Section 1011. LIMITATION ON SENIOR SUBORDINATED
INDEBTEDNESS.
The Company will not, and will not permit any Guarantor
to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise in any manner become directly or
indirectly liable for or with respect to or otherwise permit to
exist any Indebtedness that is subordinate in right of payment to
any Indebtedness of the Company or such Guarantor, as the case
may be, unless such Indebtedness is also PARI PASSU with the
Securities or the Guarantee of such Guarantor or subordinate in
right of payment to the Securities or such Guarantee to at least
the same extent as the Securities or such Guarantee are
subordinate in right of payment to Senior Indebtedness or Senior
Guarantor Indebtedness, as the case may be, as set forth in this
Indenture.
Section 1012. LIMITATION ON LIENS.
The Company will not, and will not permit any Subsidiary
to, directly or indirectly, create, incur, affirm or suffer to
exist any Lien of any kind upon any of its property or assets
(including any intercompany notes), owned at the date of this
Indenture or acquired after the date of this Indenture, or any
income or profits therefrom, except if the Securities (or a
Guarantee, in the case of Liens of a Guarantor) are directly
secured equally and ratably with (or prior to in the case of
Liens with respect to Subordinated Indebtedness or Indebtedness
of a Guarantor subordinated in right of payment to any Guarantee)
the obligation or liability secured by such Lien, excluding,
however, from the operation of the foregoing any of the
following:
(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (1) any judgment,
decree or order of any court, so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been
duly initiated for the review of such judgment, decree or order
shall not have been finally terminated or the period within which
such proceedings may be initiated shall not have expired;
(2) taxes not yet delinquent or which are being contested in good
faith; (3) security for payment of workers' compensation or other
insurance; (4) good faith deposits in connection with tenders,
leases, contracts (other than contracts for the payment of
money); (5) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers,
restrictions on the use of property or minor irregularities of
title (and with respect to leasehold interests, mortgages,
obligations, liens and other encumbrances incurred, created,
assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent
of the lessee), none of which materially impairs the use of any
parcel of property material to the operation of the business of
the Company or any Subsidiary or the value of such property for
the purpose of such business; (6) deposits to secure public or
statutory obligations, or in lieu of surety or appeal bonds;
(7) certain surveys, exceptions, title defects, encumbrances,
easements, reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph or telephone lines and
other similar purposes or zoning or other restrictions as to the
use of real property not interfering with the ordinary conduct of
the business of the Company or any of its Subsidiaries; or
(8) operation of law in favor of mechanics, materialmen,
laborers, employees or suppliers, incurred in the ordinary course
of business for sums which are not yet delinquent or are being
contested in good faith by negotiations or by appropriate
proceedings which suspend the collection thereof;
(c) any Lien now or hereafter existing on property of
the Company or any Guarantor securing Senior Indebtedness or
Senior Guarantor Indebtedness, in each case which Indebtedness is
permitted under the provisions of Section 1008 and provided that
the provisions described under Section 1014 are complied with;
(d) any Lien securing Acquired Indebtedness created
prior to (and not created in connection with, or in contemplation
of) the incurrence of such Indebtedness by the Company or any
Subsidiary, in each case which Indebtedness is permitted under
the provisions of Section 1008; PROVIDED that any such Lien only
extends to the assets that were subject to such Lien securing
such Acquired Indebtedness prior to the related transaction by
the Company or its Subsidiaries; and
(e) any extension, renewal, refinancing or replacement,
in whole or in part, of any Lien described in the foregoing
clauses (a) through (d) so long as the amount of security is not
increased thereby.
Section 1013. LIMITATION ON SALE OF ASSETS.
(a) The Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly, consummate an Asset
Sale unless (i) at least 75% of the proceeds from such Asset Sale
are received in cash and (ii) the Company or such Subsidiary
receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the shares or assets sold
(other than in the case of an involuntary Asset Sale, as
determined by the Board of Directors of the Company and evidenced
in a Board Resolution).
(b) If all or a portion of the Net Cash Proceeds of any
Asset Sale are not required to be applied to repay permanently
any Senior Indebtedness or Senior Guarantor Indebtedness then
outstanding as required by the terms thereof, or the Company
determines not to apply such Net Cash Proceeds to the permanent
prepayment of such Senior Indebtedness or Senior Guarantor
Indebtedness or if no such Senior Indebtedness or Senior
Guarantor Indebtedness is then outstanding, then the Company may
within twelve months of the Asset Sale, invest the Net Cash
Proceeds in other properties and assets that (as determined by
the Board of Directors of the Company) replace the properties and
assets that were the subject of the Asset Sale or in properties
and assets that will be used in the businesses of the Company or
its Subsidiaries existing on the date of this Indenture or
reasonably related thereto. The amount of such Net Cash Proceeds
neither used to permanently repay or prepay Senior Indebtedness
or Senior Guarantor Indebtedness nor used or invested as set
forth in this paragraph constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals
$10,000,000 or more, the Company shall apply the Excess Proceeds
to the repayment of the Securities and any Pari Passu
Indebtedness required to be repurchased under the instrument
governing such Pari Passu Indebtedness as follows: (a) the
Company shall make an offer to purchase (an "Offer") from all
holders of the Securities in accordance with the procedures set
forth in this Indenture in the maximum principal amount
(expressed as a multiple of $1,000) of Securities that may be
purchased out of an amount (the "Security Amount") equal to the
product of such Excess Proceeds multiplied by a fraction, the
numerator of which is the outstanding principal amount of the
Securities, and the denominator of which is the sum of the
outstanding principal amount of the Securities and such Pari
Passu Indebtedness (subject to proration in the event such amount
is less than the aggregate Offered Price (as defined herein) of
all Securities tendered) and (b) to the extent required by such
Pari Passu Indebtedness to permanently reduce the principal
amount of such Pari Passu Indebtedness, the Company shall make an
offer to purchase or otherwise repurchase or redeem Pari Passu
Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu
Debt Amount") equal to the excess of the Excess Proceeds over the
Security Amount; PROVIDED that in no event shall the Pari Passu
Debt Amount exceed the principal amount of such Pari Passu
Indebtedness plus the amount of any premium required to be paid
to repurchase such Pari Passu Indebtedness. The offer price
shall be payable in cash in an amount equal to 100% of the
principal amount of the Securities plus accrued and unpaid
interest, if any, to the date (the "Offer Date") such Offer is
consummated (the "Offered Price"), in accordance with the
procedures set forth in this Indenture. To the extent that the
aggregate Offered Price of the Securities tendered pursuant to
the Offer is less than the Security Amount relating thereto or
the aggregate amount of Pari Passu Indebtedness that is purchased
is less than the Pari Passu Debt Amount (the amount of such
shortfall, if any, constituting a "Deficiency"), the Company
shall use such Deficiency in the business of the Company and its
Subsidiaries. Upon completion of the purchase of all the
Securities tendered pursuant to an Offer and the purchase of the
Pari Passu Indebtedness pursuant to a Pari Passu Offer, the
amount of Excess Proceeds, if any, shall be reset at zero.
(d) Whenever the Excess Proceeds received by the
Company exceed $7,000,000, such Excess Proceeds shall be set
aside by the Company in a separate account pending (i) deposit
with the depositary or a Paying Agent of the amount required to
purchase the Securities or Pari Passu Indebtedness tendered in an
Offer or a Pari Passu Offer, (ii) delivery by the Company of the
Offered Price to the Holders or holders of Pari Passu
Indebtedness tendered in an Offer or a Pari Passu Offer and (iii)
application, as set forth above, of Excess Proceeds in the
business of the Company and its Subsidiaries. Such Excess
Proceeds may be invested in Temporary Cash Investments, PROVIDED
that the maturity date of any such investment made after the
amount of Excess Proceeds exceeds $7,000,000 shall not be later
than the earlier of three months or the Offer Date, if known.
The Company shall be entitled to any interest or dividends
accrued, earned or paid on such Temporary Cash Investments,
PROVIDED that the Company shall not withdraw such interest from
the separate account if an Event of Default has occurred and is
continuing.
(e) If the Company becomes obligated to make an Offer
pursuant to clause (c) above, the Securities shall be purchased
by the Company, at the option of the holder thereof, in whole or
in part in integral multiples of $1,000, on a date that is not
earlier than 45 days and not later than 60 days from the date the
notice is given to holders, or such later date as may be
necessary for the Company to comply with the requirements under
the Exchange Act, subject to proration in the event the Security
Amount is less than the aggregate Offered Price of all Securities
tendered.
(f) The Company shall comply with the applicable tender
offer rules, including Rule 14e-1 under the Exchange Act, and any
other applicable securities laws or regulations in connection
with an Offer.
(g) The Company will not, and will not permit any
Subsidiary to, create or permit to exist or become effective any
restriction (other than restrictions existing under
(i) Indebtedness as in effect on the date of this Indenture as
such Indebtedness may be refinanced from time to time, PROVIDED
that such restrictions are no less favorable to the Holders of
Securities than those existing on the date of this Indenture or
(ii) any Senior Indebtedness and any Senior Guarantor
Indebtedness) that would materially impair the ability of the
Company to make an Offer to purchase the Securities or, if such
Offer is made, to pay for the Securities tendered for purchase.
(h) Subject to paragraph (f) above, within 30 days
after the date on which the amount of Excess Proceeds equals or
exceeds $10,000,000, the Company shall send or cause to be sent
by first-class mail, postage prepaid, to the Trustee and to each
Holder of the Securities, at his address appearing in the
Security Register, a notice stating or including:
(1) that the Holder has the right to require the
Company to repurchase, subject to proration, such
Holder's Securities at the Offered Price;
(2) the Offer Date;
(3) the instructions a Holder must follow in order
to have its Securities purchased in accordance with
paragraph (c) of this Section; and
(4) (i) the most recently filed Annual Report on
Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently
filed Quarterly Report on Form 10-Q and any Current
Report on Form 8-K of the Company filed subsequent to
such Quarterly Report, other than Current Reports
describing Asset Sales otherwise described in the
offering materials (or corresponding successor
reports)(or in the event the Company is not required to
prepare any of the foregoing Forms, the comparable
information required pursuant to Section 1019), (ii) a
description of material developments in the Company's
business subsequent to the date of the latest of such
Reports, (iii) if material, appropriate pro forma
financial information, and (iv) such other information,
if any, concerning the business of the Company which the
Company in good faith believes will enable such Holders
to make an informed investment decision.
(i) Holders electing to have Securities purchased
hereunder will be required to surrender such Securities at the
address specified in the notice at least three Business Days
prior to the Offer Date. Holders will be entitled to withdraw
their election to have their Securities purchased pursuant to
this Section 1012 if the Company receives, not later than three
Business Days prior to the Offer Date, a telegram, telex,
facsimile transmission or letter setting forth (1) the name of
the Holder, (2) the certificate number of the Security in respect
of which such notice of withdrawal is being submitted, (3) the
principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) delivered for purchase by the Holder
as to which his election is to be withdrawn, (4) a statement
that such Holder is withdrawing his election to have such
principal amount of such Security purchased, and (5) the
principal amount, if any, of such Security (which shall be $1,000
or an integral multiple thereof) that remains subject to the
original notice of the Offer and that has been or will be
delivered for purchase by the Company.
(j) The Company shall (i) not later than the Offer
Date, accept for payment Securities or portions thereof tendered
pursuant to the Offer, (ii) not later than 10:00 a.m. (New York
time) on the Offer Date, deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003)
an amount of money in same day funds (or New York Clearing House
funds if such deposit is made prior to the Offer Date) sufficient
to pay the aggregate Offered Price of all the Securities or
portions thereof which are to be purchased on that date and
(iii) not later than the Offer Date, deliver to the Paying Agent
(if other than the Company) an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the
Company.
Subject to applicable escheat laws, as provided in the
Securities, the Trustee and the Paying Agent shall return to the
Company any cash that remains unclaimed, together with interest,
if any, thereon, held by them for the payment of the Offered
Price; PROVIDED, HOWEVER, that, (x) to the extent that the
aggregate amount of cash deposited by the Company with the
Trustee in respect of an Offer exceeds the aggregate Offered
Price of the Securities or portions thereof to be purchased, then
the Trustee shall hold such excess for the Company and (y) unless
otherwise directed by the Company in writing, promptly after the
Business Day following the Offer Date the Trustee shall return
any such excess to the Company together with interest or
dividends, if any, thereon.
(k) Securities to be purchased shall, on the Offer
Date, become due and payable at the Offered Price and from and
after such date (unless the Company shall default in the payment
of the Offered Price) such Securities shall cease to bear
interest. Such Offered Price shall be paid to such Holder
promptly following the later of the Offer Date and the time of
delivery of such Security to the relevant Paying Agent at the
office of such Paying Agent by the Holder thereof in the manner
required. Upon surrender of any such Security for purchase in
accordance with the foregoing provisions, such Security shall be
paid by the Company at the Offered Price; PROVIDED, HOWEVER, that
installments of interest whose Stated Maturity is on or prior to
the Offer Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as
such on the relevant Regular Record Dates according to the terms
and the provisions of Section 307; PROVIDED FURTHER that
Securities to be purchased are subject to proration in the event
the Excess Proceeds are less than the aggregate Offered Price of
all Securities tendered for purchase, with such adjustments as
may be appropriate by the Trustee so that only Securities in
denominations of $1,000 or integral multiples thereof, shall be
purchased. If any Security tendered for purchase shall not be so
paid upon surrender thereof by deposit of funds with the Trustee
or a Paying Agent in accordance with paragraph (j) above, the
principal thereof (and premium, if any, thereon) shall, until
paid, bear interest from the Offer Date at the rate borne by such
Security. Any Security that is to be purchased only in part
shall be surrendered to a Paying Agent at the office of such
Paying Agent (with, if the Company, the Security Registrar or the
Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Security
Registrar or the Trustee duly executed by, the Holder thereof or
such Holder's attorney duly authorized in writing), and the
Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge,
one or more new Securities of any authorized denomination as
requested by such Holder in an aggregate principal amount equal
to, and in exchange for, the portion of the principal amount of
the Security so surrendered that is not purchased.
Section 1014. LIMITATION ON ISSUANCES OF GUARANTEES OF
AND PLEDGES FOR INDEBTEDNESS.
(a) The Company will not permit any Subsidiary, other
than the Guarantors, directly or indirectly, to secure the
payment of any Senior Indebtedness of the Company and the Company
will not, and will not permit a Subsidiary to, pledge any
intercompany notes representing obligations of any Subsidiary
(other than a Guarantor) to secure the payment of any Senior
Indebtedness unless (x) such Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing
for a guarantee of payment of the Securities by such Subsidiary,
which guarantee shall be on the same terms as the guarantee of
the Senior Indebtedness (if a guarantee of Senior Indebtedness is
granted by any such Subsidiary) except that the guarantee of the
Securities need not be secured and shall be subordinated to the
claims against such Subsidiary in respect of Senior Indebtedness
to the same extent as the Securities are subordinated to Senior
Indebtedness of the Company under this Indenture and (y) such
Subsidiary waives and will not in any manner whatsoever claim or
take the benefit or advantage of any rights of reimbursement,
indemnity or subrogation or any other rights the Company or any
other Subsidiary as a result of any payment by such Subsidiary
under its guarantee.
(b) The Company will not permit any Subsidiary, other
than the Guarantors, directly or indirectly, to guarantee, assume
or in any other manner become liable with respect to any
Indebtedness of the Company unless (i) such Subsidiary
simultaneously executes and delivers a supplemental indenture to
this Indenture providing for a guarantee of the Securities on the
same terms as the guarantee of such Indebtedness except that
(A) such guarantee need not be secured unless required pursuant
to Section 1012, (B) if the Securities are subordinated in right
of payment to such Indebtedness, the guarantee under the
supplemental indenture shall be subordinated to the guarantee of
such Indebtedness to the same extent as the Securities are
subordinated to such Indebtedness under this Indenture and (C) if
such Indebtedness is by its terms expressly subordinated to the
Securities, any such assumption, guarantee or other liability of
such Subsidiary with respect to such Indebtedness shall be
subordinated to such Subsidiary's assumption, guarantee or other
liability with respect to the Securities to the same extent as
such Indebtedness is subordinated to the Securities and (ii) such
Subsidiary waives and will not in any manner whatsoever claim or
take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company
or any other Subsidiary as a result of any payment by such
Subsidiary under its Guarantee.
(c) Each guarantee created pursuant to the provisions
described in the foregoing paragraph is referred to as a
"Guarantee" and the issuer of each such Guarantee is referred to
as a "Guarantor." Notwithstanding the foregoing, any Guarantee
by a Subsidiary of the Securities shall provide by its terms that
it shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person
not an Affiliate of the Company, of all of the Company's Capital
Stock in, or all or substantially all the assets of, such
Subsidiary, which is in compliance with the terms of this
Indenture or (ii) the release by the holders of the Indebtedness
of the Company described in clauses (a) and (b) above of their
security interest or their guarantee by such Subsidiary
(including any deemed release upon payment in full of all
obligations under such Indebtedness), at a time when (A) no other
Indebtedness of the Company has been secured or guaranteed by
such Subsidiary, as the case may be, or (B) the holders of all
such other Indebtedness which is secured or guaranteed by such
Subsidiary also release their security interest in, or guarantee
by, such Subsidiary (including any deemed release upon payment in
full of all obligations under such Indebtedness).
Section 1015. RESTRICTION ON TRANSFER OF ASSETS.
The Company will not sell, convey, transfer or otherwise
dispose of its assets or property to any of its Subsidiaries
(other than to the Guarantors), except for sales, conveyances,
transfers or other dispositions made in the ordinary course of
business. For purposes of this Section 1015, any sale,
conveyance, transfer, lease or other disposition of property or
assets, having a Fair Market Value in excess of (a) $2,000,000
for any sale, conveyance, transfer or disposition or series of
related sales, conveyances, transfers, leases and dispositions
and (b) $10,000,000 in the aggregate for all such sales,
conveyances, transfers, leases or dispositions in any fiscal year
of the Company shall not be considered "in the ordinary course of
business."
Section 1016. PURCHASE OF SECURITIES UPON A CHANGE OF
CONTROL.
(a) If a Change of Control shall occur at any time,
then each Holder shall have the right to require that the Company
purchase such Holder's Securities in whole or in part in integral
multiples of $1,000, at a purchase price (the "Change of Control
Purchase Price") in cash in an amount equal to 101% of the
principal amount of such Securities, plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control
Purchase Date"), pursuant to the offer described in subsection
(c) of this Section (the "Change of Control Offer") and in
accordance with the procedures set forth in Subsections (b), (c),
(d) and (e) of this Section.
(b) Within 15 days following any Change of Control, the
Company shall notify the Trustee thereof and give written notice
(a "Change of Control Purchase Notice") of such Change of Control
to each Holder by first-class mail, postage prepaid, at his
address appearing in the Security Register stating or including:
(1) that a Change of Control has occurred, the
date of such event, and that such Holder has the right
to require the Company to repurchase such Holder's
Securities at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding
such Change of Control (including but not limited to
information with respect to PRO FORMA historical income,
cash flow and capitalization after giving effect to such
Change of Control, if any);
(3) (i) the most recently filed Annual Report on
Form 10-K (including audited consolidated financial
statements) of the Company, the most recent subsequently
filed Quarterly Report on Form 10-Q, as applicable, and
any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report (or in the event the
Company is not required to prepare any of the foregoing
Forms, the comparable information required to be
prepared by the Company and any Guarantor pursuant to
Section 1019), (ii) a description of material developments
in the Company's business subsequent to the date of the
latest of such reports and (iii) such other information,
if any, concerning the business of the Company which
the Company in good faith believes will enable such
Holders to make an informed investment decision;
(4) that the Change of Control Offer is being made
pursuant to this Section 1016(a) and that all Securities
properly tendered pursuant to the Change of Control
Offer will be accepted for payment at the Change of
Control Purchase Price;
(5) the Change of Control Purchase Date which
shall be a Business Day no earlier than 30 days nor
later than 60 days from the date such notice is mailed,
or such later date as is necessary to comply with
requirements under the Exchange Act;
(6) the Change of Control Purchase Price;
(7) the names and addresses of the Paying Agent
and the offices or agencies referred to in Section 1002;
(8) that Securities must be surrendered on or
prior to the Change of Control Purchase Date to the
Paying Agent at the office of the Paying Agent or to an
office or agency referred to in Section 1002 to collect
payment;
(9) that the Change of Control Purchase Price for
any Security which has been properly tendered and not
withdrawn will be paid promptly following the Change of
Control Offer Purchase Date;
(10) the procedures for withdrawing a tender of
Securities and Change of Control Purchase Notice;
(11) that any Security not tendered will continue
to accrue interest; and
(12) that, unless the Company defaults in the
payment of the Change of Control Purchase Price, any
Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the
Change of Control Purchase Date.
(c) Upon receipt by the Company of the proper tender of
Securities, the Holder of the Security in respect of which such
proper tender was made shall (unless the tender of such Security
is properly withdrawn) thereafter be entitled to receive solely
the Change of Control Purchase Price with respect to such
Security. Upon surrender of any such Security for purchase in
accordance with the foregoing provisions, such Security shall be
paid by the Company at the Change of Control Purchase Price;
PROVIDED, HOWEVER, that installments of interest whose Stated
Maturity is on or prior to the Change of Control Purchase Date
shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such on the relevant
Regular Record Dates according to the terms and the provisions of
Section 307. If any Security tendered for purchase shall not be
so paid upon surrender thereof, the principal thereof (and
premium, if any, thereon) shall, until paid, bear interest from
the Change of Control Purchase Date at the rate borne by such
Security. Holders electing to have Securities purchased will be
required to surrender such Securities to the Paying Agent at the
address specified in the Change of Control Purchase Notice at
least two Business Days prior to the Change of Control Purchase
Date. Any Security that is to be purchased only in part shall be
surrendered to a Paying Agent at the office of such Paying Agent
(with, if the Company, the Security Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Security Registrar or
the Trustee, as the case may be, duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing),
and the Company shall execute and the Trustee shall authenticate
and deliver to the Holder of such Security, without service
charge, one or more new Securities of any authorized denomination
as requested by such Holder in an aggregate principal amount
equal to, and in exchange for, the portion of the principal
amount of the Security so surrendered that is not purchased.
(d) The Company shall (i) not later than the Change of
Control Purchase Date, accept for payment Securities or portions
thereof tendered pursuant to the Change of Control Offer,
(ii) not later than 11:00 a.m. (New York time) on the Change of
Control Purchase Date, deposit with the Paying Agent an amount of
cash sufficient to pay the aggregate Change of Control Purchase
Price of all the Securities or portions thereof which are to be
purchased as of the Change of Control Purchase Date and (iii) not
later than the Change of Control Purchase Date, deliver to the
Paying Agent an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the Change of Control
Purchase Price of the Securities purchased from each such Holder,
and the Company shall execute and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security
equal in principal amount to any unpurchased portion of the
Security surrendered. Any Securities not so accepted shall be
promptly mailed or delivered by the Paying Agent at the Company's
expense to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer on the Change
of Control Purchase Date. For purposes of this Section 1016, the
Company shall choose a Paying Agent which shall not be the
Company.
(e) A Change of Control Purchase Notice may be
withdrawn before or after delivery by the Holder to the Paying
Agent at the office of the Paying Agent of the Security to which
such Change of Control Purchase Notice relates, by means of a
written notice of withdrawal delivered by the Holder to the
Paying Agent at the office of the Paying Agent or to the office
or agency referred to in Section 1002 to which the related Change
of Control Purchase Notice was delivered not later than three
Business Days prior to the Change of Control Purchase Date
specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in
respect of which such notice of withdrawal is being
submitted;
(3) the principal amount of the Security (which
shall be $1,000 or an integral multiple thereof)
delivered for purchase by the Holder as to which such
notice of withdrawal is being submitted; and
(4) the principal amount, if any, of such Security
(which shall be $1,000 or an integral multiple thereof)
that remains subject to the original Change of Control
Purchase Notice and that has been or will be delivered
for purchase by the Company.
(f) Subject to applicable escheat laws, as provided in
the Securities, the Trustee and the Paying Agent shall return to
the Company any cash that remains unclaimed, together with
interest or dividends, if any, thereon, held by them for the
payment of the Change of Control Purchase Price; PROVIDED,
HOWEVER, that, (x) to the extent that the aggregate amount of
cash deposited by the Company pursuant to clause (ii) of
paragraph (d) above exceeds the aggregate Change of Control
Purchase Price of the Securities or portions thereof to be
purchased, then the Trustee shall hold such excess for the
Company and (y) unless otherwise directed by the Company in
writing, promptly after the Business Day following the Change of
Control Purchase Date the Trustee shall return any such excess to
the Company together with interest, if any, thereon.
(g) The Company shall comply with the applicable tender
offer rules, including Rule 14e-1 under the Exchange Act, and any
other applicable securities laws or regulations in connection
with a Change of Control Offer.
(h) The Company will not, and will not permit any
Subsidiary to, create or permit to exist or become effective any
restriction (other than restrictions existing under Indebtedness
as in effect on the date of this Indenture) that would materially
impair the ablity of the Company to make a Change of Control
Offer to purchase the Securities or, if such Change of Control
Offer is made, to pay for the Securities tendered for purchase.
Section 1017. LIMITATION ON SUBSIDIARY CAPITAL STOCK.
The Company will not permit any Subsidiary of the
Company to issue any Capital Stock, except for (i) Capital Stock
issued to and held by the Company or a Wholly Owned Subsidiary,
and (ii) Capital Stock issued by a Person prior to the time
(A) such Person becomes a Subsidiary, (B) such Person merges with
or into a Subsidiary or (C) a Subsidiary merges with or into such
Person, PROVIDED that such Capital Stock was not issued or
incurred by such Person in anticipation of the type of
transaction contemplated by subclauses (A), (B) or (C).
Section 1018. LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Subsidiary of the Company to
(i) pay dividends or make any other distribution on its Capital
Stock, (ii) pay any Indebtedness owed to the Company or a
Subsidiary of the Company, (iii) make any Investment in the
Company or a Subsidiary of the Company or (iv) transfer any of
its properties or assets to the Company or any Subsidiary,
except (a) any encumbrance or restriction pursuant to an
agreement in effect on the date of this Indenture and listed on
Schedule II hereto; (b) any encumbrance or restriction, with
respect to a Subsidiary that is not a Subsidiary of the Company
on the date of this Indenture, in existence at the time such
Person becomes a Subsidiary of the Company and, in the case of
clauses (a) and (b), not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary; (c) any
encumbrance or restriction existing under any agreement that
extends, renews, refinances or replaces the agreements containing
the encumbrances or restrictions in the foregoing clauses (a) and
(b), or in this clause (c), PROVIDED that the terms and
conditions of any such encumbrances or restrictions are not
materially less favorable to the holders of the Securities than
those under or pursuant to the agreement evidencing the
Indebtedness so extended, renewed, refinanced or replaced (except
that an encumbrance or restriction that is not more restrictive
than those set forth in this Indenture shall in any event be
permitted hereunder); and (d) any encumbrance or restriction
created pursuant to an asset sale agreement, stock sale agreement
or similar instrument pursuant to which an Asset Sale permitted
under Section 1013 is to be consummated, so long as such
restriction or encumbrance shall be effective only for a period
from the execution and delivery of such agreement or instrument
through a termination date not later than 270 days after such
execution and delivery.
Section 1019. PROVISION OF FINANCIAL STATEMENTS.
Whether or not the Company is subject to Section 13(a)
or 15(d) of the Exchange Act, the Company will, to the extent
permitted under the Exchange Act, file with the Commission the
annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission
pursuant to such Sections 13(a) or 15(d) if the Company were so
subject, such documents to be filed with the Commission on or
prior to the respective dates (the "Required Filing Dates") by
which the Company would have been required so to file such
documents if the Company were so subject. The Company will also
in any event (x) within 15 days of each Required Filing Date
(i) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders and
(ii) file with the Trustee copies of the annual reports,
quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act if the Company were
subject to such Sections and (y) if filing such documents by the
Company with the Commission is not permitted under the Exchange
Act, promptly upon written request and payment of the reasonable
cost of duplication and delivery, supply copies of such
documents to any prospective Holder at the Company's cost.
Section 1020. STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company will deliver to the Trustee, on or
before a date not more than 60 days after the end of each fiscal
quarter and not more than 120 days after the end of each fiscal
year of the Company ending after the date hereof, a written
statement signed by two executive officers of the Company, one of
whom shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company,
stating whether or not, after a review of the activities of the
Company during such year or such quarter and of the Company's
performance under this Indenture, to the best knowledge, based on
such review, of the signers thereof, the Company has fulfilled
all its obligations and is in compliance with all conditions and
covenants under this Indenture throughout such year or quarter,
as the case may be, and, if there has been a Default specifying
each Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred
and is continuing, or if the Trustee or any Holder or the trustee
for or the holder of any other evidence of Indebtedness of the
Company or any Subsidiary gives any notice or takes any other
action with respect to a claimed default (other than with respect
to Indebtedness in the principal amount of less than
$10,000,000), the Company shall deliver to the Trustee by
registered or certified mail or facsimile transmission followed
by hard copy an Officers' Certificate specifying such Default,
Event of Default, notice or other action within five Business
Days of its occurrence.
Section 1021. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to
comply with any covenant or condition set forth in Sections 1005
through 1012, 1015 and 1017 through 1019, if, before or after the
time for such compliance, the Holders of not less than a majority
in aggregate principal amount of the Securities at the time
Outstanding or shall, by Act of such Holders, waive such
compliance in such instance with such covenant or condition, but
no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect.
<PAGE>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. RIGHTS OF REDEMPTION.
The Securities may be redeemed at the election of the
Company, in whole or in part, at any time on or after
December 15, 1998, subject to the conditions, and at the
Redemption Prices, specified in the form of Security, together
with accrued and unpaid interest, if any, to the Redemption Date.
Section 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company
or otherwise, as permitted or required by any provision of this
Indenture, shall be made in accordance with such provision and
this Article.
Section 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities
pursuant to Section 1101 shall be evidenced by a Company Order
and an Officers' Certificate. In case of any redemption at the
election of the Company, the Company shall, not less than 45 nor
more than 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice period shall be satisfactory to
the Trustee), notify the Trustee in writing of such Redemption
Date and of the principal amount of Securities to be redeemed.
Section 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE
REDEEMED.
If less than all the Securities are to be redeemed, the
particular Securities or portions thereof to be redeemed shall be
selected not more than 30 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities not previously
called for redemption, pro rata, by lot or such other method as
the Trustee shall deem fair and reasonable, and the amounts to be
redeemed may be equal to $1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and the
Security Registrar in writing of the Securities selected for
redemption and, in the case of any Securities selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of
Securities shall relate, in the case of any Security redeemed or
to be redeemed only in part, to the portion of the principal
amount of such Security which has been or is to be redeemed.
Section 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Securities to be
redeemed, at his address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be
redeemed, the identification of the particular Securities to be
redeemed;
(d) in the case of a Security to be redeemed in part,
the principal amount of such Security to be redeemed and that
after the Redemption Date upon surrender of such Security, new
Security or Securities in the aggregate principal amount equal to
the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price
will become due and payable upon each such Security or portion
thereof, and that (unless the Company shall default in payment of
the Redemption Price) interest thereon shall cease to accrue on
and after said date;
(g) the place or places where such Securities are to be
surrendered for payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such
Securities; provided, however, that no representation is
required to be made or will be deemed to be made by the Trustee
as to the correctness of the CUSIP number as contained in said
notice.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the
Company's written request, by the Trustee in the name and at the
expense of the Company.
The notice if mailed in the manner herein provided shall
be conclusively presumed to have been given, whether or not the
Holder receives such notice. In any case, failure to give such
notice by mail or any defect in the notice to the Holder of any
Security designated for redemption as a whole or in part shall
not affect the validity of the proceedings for the redemption of
any other Security.
Section 1106. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in
trust as provided in Section 1003) an amount of money in same day
funds sufficient to pay the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to
be redeemed on that date. All money earned on funds held in
trust by the Trustee or any Paying Agent shall be remitted to the
Company.
Section 1107. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified
and from and after such date (unless the Company shall default in
the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price
together with accrued interest to the Redemption Date; PROVIDED,
HOWEVER, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Regular Record
Dates according to the terms and the provisions of Section 307.
If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal and
premium, if any, shall, until paid, bear interest from the
Redemption Date at the rate borne by such Security.
Section 1108. SECURITIES REDEEMED OR PURCHASED IN PART.
Any Security which is to be redeemed or purchased only
in part shall be surrendered to the Paying Agent at the office
or agency maintained for such purpose pursuant to Section 1002
(with, if the Company, the Security Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company, the Security Registrar or
the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such
Holder in aggregate principal amount equal to, and in exchange
for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed or purchased.
<PAGE>
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
Section 1201. SECURITIES SUBORDINATE TO SENIOR
INDEBTEDNESS.
The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set
forth in this Article, the Indebtedness represented by the
Securities and the payment of the principal of, premium, if any,
and interest on each and all of the Securities and all other
Indenture Obligations are hereby expressly made subordinate and
subject in right of payment as provided in this Article to the
prior payment in full, in cash or Cash Equivalents or in any
other form acceptable to the holders of Senior Indebtedness, of
all Senior Indebtedness.
This Article Twelve shall constitute a continuing offer
to all Persons who, in reliance upon such provisions, become
holders of, or continue to hold Senior Indebtedness; and such
provisions are made for the benefit of the holders of Senior
Indebtedness; and such holders are made obligees hereunder and
they or each of them may enforce such provisions.
Section 1202. PAYMENT OVER OF PROCEEDS UPON
DISSOLUTION, ETC.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or
other similar case or proceeding in connection therewith,
relative to the Company or to its creditors, as such, or to its
assets, or (b) any liquidation, dissolution or other winding up
of the Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for
the benefit of creditors or any other marshaling of assets or
liabilities of the Company, then and in any such event:
(1) the holders of Senior Indebtedness shall be
entitled to receive payment in full in cash or Cash Equivalents
or in any other form acceptable to the holders of Senior
Indebtedness, of all amounts due on or in respect of all Senior
Indebtedness, before the Holders of the Securities are entitled
to receive any payment or distribution of any kind or character
(excluding Permitted Junior Securities) on account of the
principal of, premium, if any, or interest on the Securities or
any other Indenture Obligations; and
(2) any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or
securities (excluding Permitted Junior Securities), by set-off or
otherwise, to which the Holders or the Trustee would be entitled
but for the provisions of this Article shall be paid by the
liquidating trustee or agent or other Person making such payment
or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of
Senior Indebtedness or their representative or representatives or
to the trustee or trustees under any indenture under which any
instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented
by each, to the extent necessary to make payment in full in cash
or Cash Equivalents or in any other form acceptable to the
holders of Senior Indebtedness, of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or the Holder of any
Security shall have received any payment or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities, in respect of principal, premium, if any,
and interest on the Securities or any other Indenture Obligations
before all Senior Indebtedness is paid in full, then and in such
event such payment or distribution (excluding Permitted Junior
Securities) shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other person making payment or distribution of
assets of the Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to
pay all Senior Indebtedness in full in cash or Cash Equivalents
or in any other form acceptable to the holders of Senior
Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of
the Company with or into, another Person or the liquidation or
dissolution of the Company following the sale, assignment,
conveyance, transfer, lease or other disposal of all or
substantially all of the Company's properties or assets to
another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such
consolidation or the surviving entity of such merger or the
Person which acquires by sale, assignment, conveyance, transfer,
lease or other disposal of all or substantially all of the
Company's properties or assets, as the case may be, shall, as a
part of such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposal, comply with the conditions set
forth in Article Eight.
Section 1203. SUSPENSION OF PAYMENT WHEN SENIOR
INDEBTEDNESS IN DEFAULT.
(a) Unless Section 1202 shall be applicable, upon the
occurrence of a Payment Default, no payment (other than any
payments previously made pursuant to the provisions described in
Article Four) or distribution of any assets of the Company of any
kind or character (excluding Permitted Junior Securities) shall
be made by the Company on account of principal of, premium, if
any, or interest on, the Securities or any other Indenture
Obligations or on account of the purchase, redemption, defeasance
(whether under Section 402 or 403) or other acquisition of or in
respect of the Securities unless and until such Payment Default
shall have been cured or waived or shall have ceased to exist or
the Designated Senior Indebtedness with respect to which such
Payment Default shall have occurred shall have been discharged or
paid in full in cash or Cash Equivalents or in any other form
acceptable to the holders of such Senior Indebtedness, after
which the Company shall resume making any and all required
payments in respect of the Securities, including any missed
payments.
(b) Unless Section 1202 shall be applicable, upon
(1) the occurrence of a Non-payment Default and (2) receipt by
the Trustee and the Company from a representative of the holders
of Designated Senior Indebtedness (a "Senior Representative") of
written notice of such occurrence, no payment (other than any
payments previously made pursuant to the provisions described in
Article Four) or distribution of any assets of the Company of
any kind or character (excluding Permitted Junior Securities)
shall be made by the Company on account of any principal of,
premium, if any, or interest on, the Securities or any other
Indenture Obligations or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of Securities
for a period ("Payment Blockage Period") commencing on the date
of receipt by the Trustee of such notice unless and until the
earliest of (subject to any blockage of payments that may then or
thereafter be in effect under subsection (a) of this Section
1203) (x) 179 days having elapsed since receipt of such written
notice by the Trustee (provided any Designated Senior
Indebtedness as to which notice was given shall theretofore have
not been accelerated), (y) the date such Non-payment Default and
all other Non-payment Defaults as to which notice is also given
after such period is initiated shall have been cured or waived or
shall have ceased to exist or the Senior Indebtedness related
thereto shall have been discharged or paid in full in cash or
Cash Equivalents or in any other form as acceptable to the
holders of Senior Indebtedness, or (z) the date on which such
Payment Blockage Period (and all Non-Payment Defaults as to which
notice is given after such Payment Blockage Period is initiated)
shall have been terminated by written notice to the Company or
the Trustee from the Senior Representative or the holders of at
least a majority of the Designated Senior Indebtedness that
initiated such Payment Blockage Period, after which, in each such
case, the Company shall resume making any and all required
payments in respect of the Securities, including any missed
payments. Notwithstanding any other provision of this Indenture,
in no event shall a Payment Blockage Period extend beyond 179
days from the date of the receipt by the Company or the Trustee
of the notice referred to in clause (2) of this paragraph (b)
(the "Initial Blockage Period"). Any number of notices of
Non-Payment Defaults may be given during the Initial Blockage
Period; PROVIDED that during any 365-day consecutive period only
one Payment Blockage Period during which payment of principal of,
or interest on, the Securities may not be made may commence and
the duration of the Payment Blockage Period may not exceed 179
days. No Non-payment Default with respect to Designated Senior
Indebtedness which existed or was continuing on the date of the
commencement of any Payment Blockage Period will be, or can be,
made the basis for the commencement of a second Payment Blockage
Period, whether or not within a period of 365 consecutive days,
unless such default shall have been cured or waived for a period
of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing,
the Company shall make any payment to the Trustee or the Holder
of any Security prohibited by the foregoing provisions of this
Section, then and in such event such payment shall be paid over
and delivered forthwith to a Senior Representative of the holders
of the Designated Senior Indebtedness or as a court of competent
jurisdiction shall direct.
Section 1204. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article, elsewhere in this
Indenture or in any of the Securities shall prevent the Company,
at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 1202 or under
the conditions described in Section 1203, from making payments at
any time of principal of, premium, if any, or interest on the
Securities.
Section 1205. SUBROGATION TO RIGHTS OF HOLDERS OF
SENIOR INDEBTEDNESS.
Subject to the payment in full of all Senior
Indebtedness in cash or Cash Equivalents or in any other form
acceptable to the holders of Senior Indebtedness, the Holders of
the Securities shall be subrogated to the rights of the holders
of such Senior Indebtedness to receive payments and distributions
of cash, property and securities applicable to the Senior
Indebtedness until the principal of, premium, if any, and
interest on the Securities shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders
of Senior Indebtedness of any cash, property or securities to
which the Holders or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Indebtedness,
and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior
Indebtedness.
Section 1206. PROVISIONS SOLELY TO DEFINE RELATIVE
RIGHTS.
The provisions of this Article are intended solely for
the purpose of defining the relative rights of the Holders of the
Securities on the one hand and the holders of Senior Indebtedness
on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the
Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the
principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the
Company of the Holders of the Securities and creditors of the
Company other than the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Indebtedness (1) in
any case, proceeding, dissolution, liquidation or other winding
up, assignment for the benefit of creditors or other marshaling
of assets and liabilities of the Company referred to in Section
1202, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 1203, to prevent any payment
prohibited by such Section or enforce their rights pursuant to
Section 1203(c).
Section 1207. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee
his attorney-in-fact for any and all such purposes, including, in
the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency,
receivership proceedings, or otherwise, the timely filing of a
claim for the unpaid balance of the Indebtedness of the Company
owing to such Holder in the form required in such proceedings and
the causing of such claim to be approved.
Section 1208. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of the Company or by any act or
failure to act by any such holder, or by any non-compliance by
the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
(b) Without limiting the generality of Subsection
(a) of this Section and notwithstanding any other provision
contained herein, the holders of Senior Indebtedness may, at any
time and from time to time, without the consent of or notice to
the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to
the holders of Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding;
(2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness;
(3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from
exercising any rights against the Company and any other Person;
PROVIDED, HOWEVER, that in no event shall any such actions limit
the right of the Holders of the Securities to take any action to
accelerate the maturity of the Securities in accordance with the
provisions set forth in Article Five or to pursue any rights or
remedies under this Indenture or under applicable laws if the
taking of such action does not otherwise violate the terms of
this Article.
Section 1209. NOTICE TO TRUSTEE.
(a) The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the
Securities or other Indenture Obligations. Notwithstanding the
provisions of this Article or any provision of this Indenture,
the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the
Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from a Senior
Representative or any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the Trustee
shall be entitled in all respects to assume that no such facts
exist; PROVIDED, HOWEVER, that if the Trustee shall not have
received the notice provided for in this Section prior to the
date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of
the principal of, premium, if any, or interest on any Security or
other Indenture Obligations), then, anything herein contained to
the contrary notwithstanding but without limiting the rights and
remedies of the holders of Senior Indebtedness or any trustee,
fiduciary or agent thereof, the Trustee shall have full power and
authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by
it after such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the elimination of
the act or condition preventing any such payment unless and until
the Trustee shall have received an Officers' Certificate to such
effect.
(b) The Trustee shall be entitled to rely on the
delivery to it of a written notice to the Trustee and the Company
by a Person representing himself to be a Senior Representative or
a holder of Senior Indebtedness (or a trustee, fiduciary or agent
therefor) to establish that such notice has been given by a
Senior Representative or a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor); PROVIDED, HOWEVER, that
failure to give such notice to the Company shall not affect in
any way the ability of the Trustee to rely on such notice. In
the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if
such evidence is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to the right of
such Person to receive such payment.
Section 1210. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE
OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the
Company referred to in this Article, the Trustee and the Holders
of the Securities shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other person making such
payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution,
the holders of Senior Indebtedness and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article, PROVIDED that the foregoing shall
apply only if such court has been fully apprised of the
provisions of this Article.
Section 1211. RIGHTS OF TRUSTEE AS A HOLDER OF SENIOR
INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled
to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the
same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article shall apply to
claims of, or payments to, the Trustee under or pursuant to
Section 606.
Section 1212. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting under this Indenture, the term "Trustee" as used in this
Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as
if such Paying Agent were named in this Article in addition to or
in place of the Trustee; PROVIDED, HOWEVER, that Section 1211
shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as Paying Agent.
Section 1213. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article shall limit the right
of the Trustee or the Holders of Securities to take any action to
accelerate the maturity of the Securities pursuant to Article
Five and as set forth in this Indenture or to pursue any rights
or remedies hereunder or under applicable law, subject to the
rights, if any, under this Article of the holders, from time to
time, of Senior Indebtedness to receive the cash, property or
securities receivable upon the exercise of such rights or
remedies.
Section 1214. TRUSTEE'S RELATION TO SENIOR
INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this
Article, and no implied covenants or obligations with respect to
the holders of Senior Indebtedness shall be read into this
Article against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness and
the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall mistakenly in the absence of gross
negligence or wilful misconduct pay over or deliver to Holders,
the Company or any other Person moneys or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
<PAGE>
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 1301. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect
(except as to surviving rights of registration of transfer or
exchange of Securities herein expressly provided for) and the
Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all the Securities theretofore authenticated
and delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced
or paid as provided in Section 306 or (ii) all
Securities for whose payment United States dollars have
theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided
in Section 1003) have been delivered to the Trustee
cancelled or for cancellation; or
(2) all such Securities not theretofore delivered
to the Trustee cancelled or for cancellation (x) have
become due and payable, (y) will become due and payable
at their Stated Maturity within one year, or (z) are to
be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the Company or any
Guarantor has irrevocably deposited or caused to be
deposited with the Trustee in trust for the purpose an
amount in United States dollars sufficient to pay and
discharge the entire Indebtedness on the Securities not
theretofore delivered to the Trustee cancelled or for
cancellation, for the principal of, premium, if any, and
accrued interest at such Stated Maturity or Redemption
Date;
(b) the Company or any Guarantor has paid or caused to
be paid all other sums payable hereunder by the Company or any
Guarantor; and
(c) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel stating that
(i) all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied
with and (ii) such satisfaction and discharge will not result in
a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which
the Company or any Guarantor is a party or by which the Company
or any Guarantor is bound.
Opinions of Counsel required to be delivered under this Section
may have qualifications customary for opinions of the type
required and counsel delivering such Opinions of Counsel may rely
on certificates of the Company or government or other officials
customary for opinions of the type required, including
certificates certifying as to matters of fact, including that
various financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606
and, if United States dollars shall have been deposited with the
Trustee pursuant to subclause (2) of Subsection (a) of this
Section, the obligations of the Trustee under Section 1302 and
the last paragraph of Section 1003 shall survive.
Section 1302. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of
Section 1003, all United States dollars deposited with the
Trustee pursuant to Section 1301 shall be held in trust and
applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal of, premium, if any, and
interest on the Securities for whose payment such United States
dollars have been deposited with the Trustee, but such money need
not be segregated from other funds except to the extent required
by law or GAAP.
<PAGE>
ARTICLE FOURTEEN
GUARANTEES
Section 1401. GUARANTORS' GUARANTEE
For value received, each of the Guarantors, in
accordance with this Article Fourteen, hereby absolutely,
unconditionally and irrevocably guarantees, jointly and
severally, to the Trustee and the Holders, as if the Guarantors
were the principal debtor, the punctual payment and performance
when due of all Indenture Obligations (which for purposes of this
Guarantee shall also be deemed to include all commissions, fees,
charges, costs and other expenses (including reasonable legal
fees and disbursements of one counsel) arising out of or incurred
by the Trustee or the Holders in connection with the enforcement
of this Guarantee).
Section 1402. CONTINUING GUARANTEE; NO RIGHT OF
SET-OFF; INDEPENDENT OBLIGATION.
(a) This Guarantee shall be a continuing guarantee of
the payment and performance of all Indenture Obligations and
shall remain in full force and effect until the payment in full
of all of the Indenture Obligations and shall apply to and secure
any ultimate balance due or remaining unpaid to the Trustee or
the Holders; and this Guarantee shall not be considered as wholly
or partially satisfied by the payment or liquidation at any time
or from time to time of any sum of money for the time being due
or remaining unpaid to the Trustee or the Holders. Each
Guarantor, jointly and severally, covenants and agrees to comply
with all obligations, covenants, agreements and provisions
applicable to it in this Indenture including those set forth in
Article Eight. Without limiting the generality of the foregoing,
each of the Guarantors' liability shall extend to all amounts
which constitute part of the Indenture Obligations and would be
owed by the Company under this Indenture and the Securities but
for the fact that they are unenforceable, reduced, limited,
impaired, suspended or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the
Company.
(b) Each Guarantor, jointly and severally, hereby
guarantees that the Indenture Obligations will be paid to the
Trustee without set-off or counterclaim or other reduction
whatsoever (whether for taxes, withholding or otherwise) in
lawful currency of the United States of America.
(c) Each Guarantor, jointly and severally, guarantees
that the Indenture Obligations shall be paid strictly in
accordance with their terms regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the holders of the Securities.
(d) Each Guarantor's liability to pay or perform or
cause the performance of the Indenture Obligations under this
Guarantee shall arise forthwith after demand for payment or
performance by the Trustee has been given to the Guarantors in
the manner prescribed in Section 106 hereof.
(e) Except as provided herein, the provisions of this
Article Fourteen cover all agreements between the parties hereto
relative to this Guarantee and none of the parties shall be bound
by any representation, warranty or promise made by any Person
relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been
delivered by each Guarantor free of any conditions whatsoever and
that no representations, warranties or promises have been made to
any Guarantor affecting its liabilities hereunder, and that the
Trustee shall not be bound by any representations, warranties or
promises now or at any time hereafter made by the Company to any
Guarantor.
Section 1403. GUARANTEE ABSOLUTE.
The obligations of the Guarantors hereunder are
independent of the obligations of the Company under the
Securities and this Indenture and a separate action or actions
may be brought and prosecuted against any Guarantor whether or
not an action or proceeding is brought against the Company and
whether or not the Company is joined in any such action or
proceeding. The liability of the Guarantors hereunder is
irrevocable, absolute and unconditional and (to the extent
permitted by law) the liability and obligations of the Guarantors
hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
(a) any defect or lack of validity or enforceability
in respect of any Indebtedness or other
obligation of the Company or any other Person
under this Indenture or the Securities, or any
agreement or instrument relating to any of the
foregoing;
(b) any grants of time, renewals, extensions,
indulgences, releases, discharges or
modifications which the Trustee or the Holders
may extend to, or make with, the Company, any
Guarantor or any other Person, or any change in
the time, manner or place of payment of, or in
any other term of, all or any of the Indenture
Obligations, or any other amendment or waiver of,
or any consent to or departure from, this
Indenture or the Securities, including any
increase or decrease in the Indenture Obligations;
(c) the taking of security from the Company, any
Guarantor or any other Person, and the release,
discharge or alteration of, or other dealing with,
such security;
(d) the occurrence of any change in the laws, rules,
regulations or ordinances of any jurisdiction by
any present or future action of any governmental
authority or court amending, varying, reducing or
otherwise affecting, or purporting to amend,
vary, reduce or otherwise affect, any of the
Indenture Obligations and the obligations of any
Guarantor hereunder;
(e) the abstention from taking security from the
Company, any Guarantor or any other Person or
from perfecting, continuing to keep perfected or
taking advantage of any security;
(f) any loss, diminution of value or lack of
enforceability of any security received from the
Company, any Guarantor or any other Person, and
including any other guarantees received by the
Trustee;
(g) any other dealings with the Company, any
Guarantor or any other Person, or with any
security;
(h) the Trustee's or the Holders' acceptance of
compositions from the Company or any Guarantor;
(i) the application by the Holders or the Trustee of
all monies at any time and from time to time
received from the Company, any Guarantor or any
other Person on account of any indebtedness and
liabilities owing by the Company or any Guarantor
to the Trustee or the Holders, in such manner as
the Trustee or the Holders deems best and the
changing of such application in whole or in part
and at any time or from time to time, or any
manner of application of collateral, or proceeds
thereof, to all or any of the Indenture
Obligations, or the manner of sale of any
Collateral;
(j) the release or discharge of the Company or any
Guarantor of the Securities or of any Person
liable directly as surety or otherwise by
operation of law or otherwise for the Securities,
other than an express release in writing given by
the Trustee, on behalf of the Holders, of the
liability and obligations of any Guarantor
hereunder;
(k) any change in the name, business, capital
structure or governing instrument of the Company
or any Guarantor or any refinancing or
restructuring of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's
business or any part thereof;
(m) subject to Section 1414, any merger or
consolidation, arrangement or reorganization of
the Company, any Guarantor, any Person resulting
from the merger or consolidation of the Company
or any Guarantor with any other Person or any
other successor to such Person or merged or
consolidated Person or any other change in the
corporate existence, structure or ownership of
the Company or any Guarantor;
(n) the insolvency, bankruptcy, liquidation,
winding-up, dissolution, receivership or
distribution of the assets of the Company or its
assets or any resulting discharge of any
obligations of the Company (whether voluntary or
involuntary) or of any Guarantor or the loss of
corporate existence;
(o) subject to Section 1414, any arrangement or plan
of reorganization affecting the Company or any
Guarantor;
(p) any other circumstance (including any statute of
limitations) that might otherwise constitute a
defense available to, or discharge of, the
Company or any Guarantor; or
(q) any modification, compromise, settlement or
release by the Trustee, or by operation of law or
otherwise, of the Indenture Obligations or the
liability of the Company or any other obligor
under the Securities, in whole or in part, and
any refusal of payment by the Trustee,
in whole or in part, from any other obligor or other
guarantor in connection with any of the Indenture
Obligations, whether or not with notice to, or
further assent by, or any reservation of rights
against, each of the Guarantors.
Section 1404. RIGHT TO DEMAND FULL PERFORMANCE
In the event of any demand for payment or performance by
the Trustee from any Guarantor hereunder, the Trustee or the
Holders shall have the right to demand its full claim and to
receive all dividends or other payments in respect thereof until
the Indenture Obligations have been paid in full, and the
Guarantors shall continue to be jointly and severally liable
hereunder for any balance which may be owing to the Trustee or
the Holders by the Company under this Indenture and the
Securities. The retention by the Trustee or the Holders of any
security, prior to the realization by the Trustee or the Holders
of its rights to such security upon foreclosure thereon, shall
not, as between the Trustee and any Guarantor, be considered as a
purchase of such security, or as payment, satisfaction or
reduction of the Indenture Obligations due to the Trustee or the
Holders by the Company or any part thereof.
Section 1405. WAIVERS.
(a) Each Guarantor hereby expressly waives (to the
extent permitted by law) notice of the acceptance of this
Guarantee and notice of the existence, renewal, extension or the
non-performance, non-payment, or non-observance on the part of
the Company of any of the terms, covenants, conditions and
provisions of this Indenture or the Securities or any other
notice whatsoever to or upon the Company or such Guarantor with
respect to the Indenture Obligations. Each Guarantor hereby
acknowledges communication to it of the terms of this Indenture
and the Securities and all of the provisions therein contained
and consents to and approves the same. Each Guarantor hereby
expressly waives (to the extent permitted by law) diligence,
presentment, protest and demand for payment.
(b) Without prejudice to any of the rights or recourses
which the Trustee or the Holders may have against the Company,
each Guarantor hereby expressly waives (to the extent permitted
by law) any right to require the Trustee or the Holders to:
(i) initiate or exhaust any rights, remedies
or recourse against the Company, any Guarantor or any
other Person;
(ii) value, realize upon, or dispose of any
security of the Company or any other Person held by the
Trustee or the Holders; or
(iii) initiate or exhaust any other remedy
which the Trustee or the Holders may have in law or
equity;
before requiring or becoming entitled to demand payment from such
Guarantor under this Guarantee.
Section 1406. THE GUARANTORS REMAIN OBLIGATED IN EVENT
THE COMPANY IS NO LONGER OBLIGATED TO DISCHARGE INDENTURE
OBLIGATIONS.
It is the express intention of the Trustee and the
Guarantors that if for any reason the Company has no legal
existence, is or becomes under no legal obligation to discharge
the Indenture Obligations owing to the Trustee or the Holders by
the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable from
the Company by operation of law or for any reason whatsoever,
this Guarantee and the covenants, agreements and obligations of
the Guarantors contained in this Article Fourteen shall
nevertheless be binding upon the Guarantors, as principal debtor,
until such time as all such Indenture Obligations have been paid
in full to the Trustee and all Indenture Obligations owing to the
Trustee or the Holders by the Company have been discharged, or
such earlier time as Section 402 shall apply to the Securities
and the Guarantors shall be responsible for the payment thereof
to the Trustee or the Holders upon demand.
Section 1407. FRAUDULENT CONVEYANCE; SUBROGATION.
(a) Any term or provision of this Guarantee to the
contrary notwithstanding, the aggregate amount of the Indenture
Obligations guaranteed hereunder shall be reduced to the extent
necessary to prevent this Guarantee from violating or becoming
voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer or similar laws affecting the rights of
creditors generally.
(b) Each Guarantor hereby waives all rights of
subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right
arising under federal bankruptcy law) or otherwise by reason of
any payment by it pursuant to the provisions of this Article
Fourteen.
Section 1408. GUARANTEE IS IN ADDITION TO OTHER
SECURITY.
This Guarantee shall be in addition to and not in
substitution for any other guarantees or other security which the
Trustee may now or hereafter hold in respect of the Indenture
Obligations owing to the Trustee or the Holders by the Company
and (except as may be required by law) the Trustee shall be under
no obligation to marshal in favor of each of the Guarantors any
other guarantees or other security or any moneys or other assets
which the Trustee may be entitled to receive or upon which the
Trustee or the Holders may have a claim.
Section 1409. RELEASE OF SECURITY INTERESTS.
Without limiting the generality of the foregoing and
except as otherwise provided in this Indenture, each Guarantor
hereby consents and agrees, to the fullest extent permitted by
applicable law, that the rights of the Trustee hereunder, and the
liability of the Guarantors hereunder, shall not be affected by
any and all releases for any purpose of any collateral, if any,
from the Liens and security interests created by any collateral
document and that this Guarantee shall continue to be effective
or be reinstated, as the case may be, if at any time any payment
of any of the Indenture Obligations is rescinded or must
otherwise be returned by the Trustee upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, all as
though such payment had not been made.
Section 1410. NO BAR TO FURTHER ACTIONS.
Except as provided by law, no action or proceeding
brought or instituted under Article Fourteen and this Guarantee
and no recovery or judgment in pursuance thereof shall be a bar
or defense to any further action or proceeding which may be
brought under Article Fourteen and this Guarantee by reason of
any further default or defaults under Article Fourteen and this
Guarantee or in the payment of any of the Indenture Obligations
owing by the Company.
Section 1411. FAILURE TO EXERCISE RIGHTS SHALL NOT
OPERATE AS A WAIVER; NO SUSPENSION OF REMEDIES.
(a) No failure to exercise and no delay in exercising,
on the part of the Trustee or the Holders, any right, power,
privilege or remedy under this Article Fourteen and this
Guarantee shall operate as a waiver thereof, nor shall any single
or partial exercise of any rights, power, privilege or remedy
preclude any other or further exercise thereof, or the exercise
of any other rights, powers, privileges or remedies. The rights
and remedies herein provided for are cumulative and not exclusive
of any rights or remedies provided in law or equity.
(b) Nothing contained in this Article Fourteen shall
limit the right of the Trustee or the Holders to take any action
to accelerate the maturity of the Securities pursuant to Article
Five or to pursue any rights or remedies hereunder or under
applicable law.
Section 1412. TRUSTEE'S DUTIES; NOTICE TO TRUSTEE.
(a) Any provision in this Article Fourteen or elsewhere
in this Indenture allowing the Trustee to request any information
or to take any action authorized by, or on behalf of any
Guarantor, shall be permissive and shall not be obligatory on the
Trustee except as the Holders may direct in accordance with the
provisions of this Indenture or where the failure of the Trustee
to request any such information or to take any such action arises
from the Trustee's negligence, bad faith or willful misconduct.
(b) The Trustee shall not be required to inquire into
the existence, powers or capacities of the Company, any Guarantor
or the officers, directors or agents acting or purporting to act
on their respective behalf.
Section 1413. SUCCESSORS AND ASSIGNS.
All terms, agreements and conditions of this Article
Fourteen shall extend to and be binding upon each Guarantor and
its successors and permitted assigns and shall enure to the
benefit of and may be enforced by the Trustee and its successors
and assigns; PROVIDED, HOWEVER, that the Guarantors may not
assign any of their rights or obligations hereunder other than in
accordance with Article Eight.
Section 1414. RELEASE OF GUARANTEE.
Concurrently with the payment in full of all of the
Indenture Obligations, the Guarantors shall be released from and
relieved of their obligations under this Article Fourteen. Upon
the delivery by the Company to the Trustee of an Officer's
Certificate and, if requested by the Trustee, an Opinion of
Counsel to the effect that the transaction giving rise to the
release of this Guarantee was made by the Company in accordance
with the provisions of this Indenture and the Securities, the
Trustee shall execute any documents reasonably required in order
to evidence the release of the Guarantors from their obligations
under this Guarantee. If any of the Indenture Obligations are
revived and reinstated after the termination of this Guarantee,
then all of the obligations of the Guarantors under this
Guarantee shall be revived and reinstated as if this Guarantee
had not been terminated until such time as the Indenture
Obligations are paid in full, and each Guarantor shall enter into
an amendment to this Guarantee, reasonably satisfactory to the
Trustee, evidencing such revival and reinstatement.
This Guarantee shall terminate with respect to each
Guarantor and shall be automatically and unconditionally released
and discharged as provided in Section 1014(c).
Section 1415. EXECUTION OF GUARANTEE.
To evidence the Guarantee, each Guarantor hereby agrees
to execute the guarantee substantially in the form set forth in
Section 205, to be endorsed on each Security authenticated and
delivered by the Trustee and that this Indenture shall be
executed on behalf of each Guarantor by its Chairman of the
Board, its President, its Chief Operating Officer or one of its
Vice Presidents, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be
manual or facsimile.
Section 1416. GUARANTEE SUBORDINATE TO SENIOR GUARANTOR
INDEBTEDNESS.
Each Guarantor covenants and agrees, and each Holder of
a Guarantee, by his acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set
forth in this Article, the Indebtedness represented by the
Guarantees is hereby made subordinate and subject in right of
payment as provided in this Article to the prior payment in full,
in cash or Cash Equivalents or in any other form acceptable to
the holders of Senior Guarantor Indebtedness, of all Senior
Guarantor Indebtedness; PROVIDED, HOWEVER, that the Indebtedness
represented by this Guarantee in all respects shall rank equally
with, or prior to, all existing and future Indebtedness of such
Guarantor that is expressly subordinated to such Guarantor's
Senior Guarantor Indebtedness.
This Article Fourteen shall constitute a continuing
offer to all Persons who, in reliance upon such provisions,
become holders of, or continue to hold Senior Guarantor
Indebtedness; and such provisions are made for the benefit of the
holders of Senior Guarantor Indebtedness; and such holders are
made obligees hereunder and they or each of them may enforce such
provisions.
With respect to the relative rights of Holders and
holders of Senior Indebtedness and Senior Guarantor Indebtedness
and for purposes of Section 1407, Holders hereby acknowledge that
Indebtedness under the Credit Agreement and any guarantee by a
Guarantor of such Indebtedness, in each case incurred in
accordance with the Indenture, shall be deemed to have been
incurred simultaneous with the incurrence by such Guarantor of
its liability under its Guarantee.
Section 1417. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION
OF THE GUARANTOR, ETC.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or
other similar case or proceeding in connection therewith,
relative to any Guarantor or to its creditors, as such, or to its
assets, or (b) any liquidation, dissolution or other winding up
of any Guarantor, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for
the benefit of creditors or any other marshaling of assets or
liabilities of any Guarantor, then and in any such event:
(1) the holders of Senior Guarantor Indebtedness shall
be entitled to receive payment in full in cash or Cash
Equivalents or in any other form acceptable to the holders of
Senior Guarantor Indebtedness, of all amounts due on or in
respect of all Senior Guarantor Indebtedness, before the Holders
of the Securities are entitled to receive any payment or
distribution of any kind or character (excluding Permitted
Guarantor Junior Securities) on account of the Guarantee of such
Guarantor; and
(2) any payment or distribution of assets of any
Guarantor of any kind or character, whether in cash, property or
securities (excluding Permitted Guarantor Junior Securities), by
set-off or otherwise, to which the Holders or the Trustee would
be entitled but for the provisions of this Article shall be paid
by the liquidating trustee or agent or other Person making such
payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise, directly to the
holders of Senior Guarantor Indebtedness or their representative
or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such
Senior Guarantor Indebtedness may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of
the Senior Guarantor Indebtedness held or represented by each, to
the extent necessary to make payment in full in cash or Cash
Equivalents or in any other form acceptable to the holders of
Senior Guarantor Indebtedness of all Senior Guarantor
Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Guarantor Indebtedness; and
(3) in the event that, notwithstanding the foregoing
provisions of this Section, the Trustee or the Holder of any
Security shall have received any payment or distribution of
assets of any Guarantor of any kind or character, whether in
cash, property or securities, in respect of the Guarantee of such
Guarantor before all Senior Guarantor Indebtedness is paid in
full, then and in such event such payment or distribution
(excluding Permitted Guarantor Junior Securities) shall be paid
over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or
other person making payment or distribution of assets of such
Guarantor for application to the payment of all Senior Guarantor
Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Guarantor Indebtedness in full in cash or Cash Equivalents
or in any other form acceptable to the holders of Senior
Guarantor Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Guarantor
Indebtedness.
The consolidation of any Guarantor with, or the merger
of any Guarantor with or into, another Person or the liquidation
or dissolution of any Guarantor following the sale, assignment,
conveyance, transfer, lease or other disposal of all or
substantially all of such Guarantor's properties or assets to
another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of such Guarantor for the
purposes of this Section if the Person formed by such
consolidation or the surviving entity of such merger or the
Person which acquires by sale, assignment, conveyance, transfer,
lease or other disposal of all or substantially all of such
Guarantor's properties and assets, as the case may be, shall, as
a part of such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposal, comply with the
conditions set forth in Article Eight.
Section 1418. DEFAULT ON SENIOR GUARANTOR INDEBTEDNESS.
(a) Upon the maturity of any Senior Guarantor
Indebtedness by lapse of time, acceleration or otherwise, all
principal thereof and interest thereon and other amounts due in
connection therewith shall first be paid in full or such payment
duly provided for before any payment is made by any of the
Guarantors or any Person acting on behalf of any of the
Guarantors in respect of the Guarantee of such Guarantor.
(b) No payment (excluding payments in the form of
Permitted Guarantor Junior Securities) shall be made by any
Guarantor in respect of its Guarantee during the period in which
Section 1417 shall be applicable, during any suspension of
payments in effect under Section 1203(a) of this Indenture or
during any Payment Blockage Period in effect under Section
1203(b) of this Indenture.
(c) In the event that, notwithstanding the foregoing,
any Guarantor shall make any payment to the Trustee or the Holder
of its Guarantee prohibited by the foregoing provisions of this
Section, then and in such event such payment shall be paid over
and delivered forthwith to the representatives of the holders of
Senior Guarantor Indebtedness or as a court of competent
jurisdiction shall direct.
Section 1419. PAYMENT PERMITTED BY EACH OF THE
GUARANTORS IF NO DEFAULT.
Nothing contained in this Article, elsewhere in this
Indenture or in any of the Securities shall prevent any
Guarantor, at any time except during the pendency of any case,
proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of
assets and liabilities of such Guarantor referred to in
Section 1417 or under the conditions described in Section 1418,
from making payments at any time of principal of, premium, if
any, or interest on the Securities.
Section 1420. SUBROGATION TO RIGHTS OF HOLDERS OF
SENIOR GUARANTOR INDEBTEDNESS.
Subject to the payment in full of all Senior Guarantor
Indebtedness in cash or Cash Equivalents or in any other form
acceptable to the holders of Senior Guarantor Indebtedness, the
Holders of the Securities shall be subrogated to the rights of
the holders of such Senior Guarantor Indebtedness to receive
payments and distributions of cash, property and securities
applicable to the Senior Guarantor Indebtedness until the
principal of, premium, if any, and interest on the Securities
shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of Senior Guarantor
Indebtedness of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except
for the provisions of this Article, and no payments over pursuant
to the provisions of this Article to the holders of Senior
Guarantor Indebtedness by Holders of the Securities or the
Trustee, shall, as among any Guarantor, its creditors other than
holders of Senior Guarantor Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by such
Guarantor to or on account of the Senior Guarantor Indebtedness.
Section 1421. PROVISIONS SOLELY TO DEFINE RELATIVE
RIGHTS.
The provisions of Sections 1416 through 1429 of this
Indenture are intended solely for the purpose of defining the
relative rights of the Holders of the Securities on the one hand
and the holders of Senior Guarantor Indebtedness on the other
hand. Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall
(a) impair, as among any Guarantor, its creditors other than
holders of Senior Guarantor Indebtedness and the Holders of the
Securities, the obligation of such Guarantor, which is absolute
and unconditional, to pay to the Holders of the Securities the
principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against each of
the Guarantors of the Holders of the Securities and creditors of
each of the Guarantors other than the holders of Senior Guarantor
Indebtedness; or (c) prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior
Guarantor Indebtedness (1) in any case, proceeding, dissolution,
liquidation or other winding up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the
Guarantors referred to in Section 1417, to receive, pursuant to
and in accordance with such Section, cash, property and
securities otherwise payable or deliverable to the Trustee or
such Holder, or (2) under the conditions specified in Section
1418, to prevent any payment prohibited by such Section or
enforce their rights pursuant to Section 1418(c).
Section 1422. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee
his attorney-in-fact for any and all such purposes, including, in
the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor whether in bankruptcy,
insolvency, receivership proceedings, or otherwise, the timely
filing of a claim for the unpaid balance of the indebtedness of
any Guarantor owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved.
Section 1423. NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any
Senior Guarantor Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of any Guarantor or by
any act or failure to act by any such holder, or by any
non-compliance by any Guarantor with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
(b) Without limiting the generality of Subsection
(a) of this Section and notwithstanding any other provision
contained herein, the holders of Senior Guarantor Indebtedness
may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and
without impairing or releasing the subordination provided in this
Article or the obligations hereunder of the Holders of the
Securities to the holders of Senior Guarantor Indebtedness, do
any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or
alter, Senior Guarantor Indebtedness or any instrument evidencing
the same or any agreement under which Senior Guarantor
Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Guarantor Indebtedness; (3) release any Person
liable in any manner for the collection or payment of Senior
Guarantor Indebtedness; and (4) exercise or refrain from
exercising any rights against any of the Guarantors and any other
Person; PROVIDED, HOWEVER, that in no event shall any such
actions limit the right of the Holders of the Securities to take
any action to accelerate the maturity of the Securities in
accordance with the provisions set forth in Article Five or to
pursue any rights or remedies under this Indenture or under
applicable laws if the taking of such action does not otherwise
violate the terms of this Article.
Section 1424. NOTICE TO TRUSTEE BY EACH OF THE
GUARANTORS.
(a) Each Guarantor shall give prompt written notice to
the Trustee of any fact known to such Guarantor which would
prohibit the making of any payment to or by the Trustee in
respect of the Guarantee. Notwithstanding the provisions of this
Article or any provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall
have received written notice thereof from any Guarantor or a
holder of Senior Guarantor Indebtedness or any trustee, fiduciary
or agent therefor; and, prior to the receipt of any such written
notice, the Trustee shall be entitled in all respects to assume
that no such facts exist; PROVIDED, HOWEVER, that if the Trustee
shall not have received the notice provided for in this Section
prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation,
the payment of the principal of, premium, if any, or interest on
any Security or other Indenture Obligations), then, anything
herein contained to the contrary notwithstanding but without
limiting the rights and remedies of the holders of Senior
Guarantor Indebtedness or any trustee, fiduciary or agent
thereof, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice
to the contrary which may be received by it after such date; nor
shall the Trustee be charged with knowledge of the curing of any
such default or the elimination of the act or condition
preventing any such payment unless and until the Trustee shall
have received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the
delivery to it of a written notice to the Trustee and each
Guarantor by a Person representing himself to be a representative
of one or more holders of Designated Senior Guarantor
Indebtedness (a "Senior Guarantor Representative") or a holder of
Senior Guarantor Indebtedness (or a trustee, fiduciary or agent
therefor) to establish that such notice has been given by a
Senior Guarantor Representative or a holder of Senior Guarantor
Indebtedness (or a trustee, fiduciary or agent therefor);
PROVIDED, HOWEVER, that failure to give such notice to the
Company shall not affect in any way the ability of the Trustee to
rely on such notice. In the event that the Trustee determines in
good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Guarantor Indebtedness
to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of
Senior Guarantor Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such
payment.
Section 1425. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE
OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of any
Guarantor referred to in this Article, the Trustee and the
Holders of the Securities shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other person making such
payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution,
the holders of Senior Guarantor Indebtedness and other
indebtedness of such Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article, PROVIDED
that the foregoing shall apply only if such court has been fully
apprised of the provisions of this Article.
Section 1426. RIGHTS OF TRUSTEE AS A HOLDER OF SENIOR
GUARANTOR INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled
to all the rights set forth in this Article with respect to any
Senior Guarantor Indebtedness which may at any time be held by
it, to the same extent as any other holder of Senior Guarantor
Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in this
Article shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 606.
Section 1427. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting under this Indenture, the term "Trustee" as used in this
Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as
if such Paying Agent were named in this Article in addition to or
in place of the Trustee; PROVIDED, HOWEVER, that Section 1426
shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as Paying Agent.
Section 1428. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article shall limit the right
of the Trustee or the Holders of Securities to take any action to
accelerate the maturity of the Securities pursuant to the
provisions described under Article Five and as set forth in this
Indenture or to pursue any rights or remedies hereunder or under
applicable law, subject to the rights, if any, under this Article
of the holders, from time to time, of Senior Guarantor
Indebtedness to receive the cash, property or securities
receivable upon the exercise of such rights or remedies.
Section 1429. TRUSTEE'S RELATION TO SENIOR GUARANTOR
INDEBTEDNESS.
With respect to the holders of Senior Guarantor
Indebtedness, the Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically
set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Guarantor
Indebtedness shall be read into this Article against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Guarantor Indebtedness and the Trustee shall
not be liable to any holder of Senior Guarantor Indebtedness if
it shall mistakenly in the absence of gross negligence or wilful
misconduct pay over or deliver to Holders, the Company or any
other Person moneys or assets to which any holder of Senior
Guarantor Indebtedness shall be entitled by virtue of this
Article or otherwise.
If an officer whose signature is on this Indenture no
longer holds that office at the time the Trustee authenticates
a Security on which a Guarantee is endorsed, such Guarantee
shall be valid nevertheless.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first
above written.
CANANDAIGUA WINE COMPANY, INC.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: President
Attest: s/Lynn K. Fetterman
_________________________
Name: Lynn K. Fetterman
Title: Secretary
BATAVIA WINE CELLARS, INC.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Lynn K. Fetterman
_________________________
Name: Lynn K. Fetterman
Title: Secretary
BISCEGLIA BROTHERS WINE CO.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Lynn K. Fetterman
_________________________
Name: Lynn K. Fetterman
Title: Secretary
CALIFORNIA PRODUCTS COMPANY
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Lynn K. Fetterman
_________________________
Name: Lynn K. Fetterman
Title: Secretary
GUILD WINERIES & DISTILLERIES,
INC.
By: s/Chris Kalabokes
_________________________
Name: Chris Kalabokes
Title: President
Attest: s/Lynn K. Fetterman
_________________________
Name: Lynn K. Fetterman
Title: Secretary
TENNER BROTHERS, INC.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Lynn K. Fetterman
_________________________
Name: Lynn K. Fetterman
Title: Secretary
WIDMER'S WINE CELLARS, INC.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Lynn K. Fetterman
_________________________
Name: Lynn K. Fetterman
Title: Secretary
BARTON INCORPORATED
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
BARTON BRANDS, LTD.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
BARTON BEERS, LTD.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
BARTON BRANDS OF CALIFORNIA,
INC.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
BARTON BRANDS OF GEORGIA, INC.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
BARTON DISTILLERS IMPORT CORP.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
BARTON FINANCIAL CORPORATION
By: s/Norman Goldstein
_________________________
Name: Norman Goldstein
Title: President
Attest: s/Raymond E. Powers
_________________________
Name: Raymond E. Powers
Title: Secretary
STEVENS POINT BEVERAGE CO.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
MONARCH WINE COMPANY, LIMITED
PARTNERSHIP
By: BARTON MANAGEMENT, INC.,
as corporate general
partner
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
BARTON MANAGEMENT, INC.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: Vice President
Attest: s/Fred R. Mardell
_________________________
Name: Fred R. Mardell
Title: Secretary
VINTNERS INTERNATIONAL COMPANY,
INC.
By: s/Richard Sands
_________________________
Name: Richard Sands
Title: President
Attest: s/Lynn K. Fetterman
_________________________
Name: Lynn K. Fetterman
Title: Secretary
CHEMICAL BANK, as Trustee
By: s/W.B. Dodge
_________________________
Name: W.B. Dodge
Title: Vice President
Attest: s/R. Lorenzen
_________________________
Name: R. Lorenzen
Title: Senior Trust Officer
STATE OF NEW YORK )
_________________
) ss.:
COUNTY OF ONTARIO )
________________
On the 27th day of December, 1993, before me
____ ________
personally came Richard Sands , to me known, who,
________________
being by me duly sworn, did depose and say that he
resides at 116
___________________
Buffalo Street, Canandaigua, New York 14424 ; that
________________________________________________
he is President of Canandaigua Wine Company,
________________
Inc., one of the corporations described in and which
executed the foregoing instrument; that he knows the
corporate seal of such corporation; that the seal
affixed to said instrument is such corporate seal; that
it was so affixed pursuant to authority of the Board of
Directors of such corporation; and that he signed his
name thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Batavia Wine Cellars, Inc., one of
________________
the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Bisceglia Brothers Wine Co., one of
________________
the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of California Products Company, one of
________________
the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Guild Wineries & Distilleries,
________________
Inc., one of the corporations described in and which
executed the foregoing instrument; that he knows the
corporate seal of such corporation; that the seal
affixed to said instrument is such corporate seal; that
it was so affixed pursuant to authority of the Board of
Directors of such corporation; and that he signed his
name thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Tenner Brothers, Inc., one of the
________________
corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Widmer's Wine Cellars, Inc., one of
________________
the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Barton Incorporated, one of the
________________
corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Barton Brands, Ltd., one of the
________________
corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Barton Beers, Ltd., one of the
________________
corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
________________________________________________
he is
Vice President of Barton Brands of California, Inc.,
________________
one of the corporations described in and which executed
the foregoing instrument; that he knows the corporate
seal of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Barton Brands of Georgia, Inc., one
________________
of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Barton Distillers Import Corp., one
________________
of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF ILLINOIS )
__________________
) ss.:
COUNTY OF COOK )
_________________
On the 27th day of December , 1993, before me
_____
personally came Norman R. Goldstein, to me known, who
being by me duly sworn, did depose and say that he
resides at 7736 West Arcadia, Morton Grove, Illinois
60053; and that he is President and Treasurer of Barton
Financial Corporation, one of the corporations described
in and which executed the foregoing instrument; that he
knows the corporate seal of such corporation; that the
seal affixed to said instrument is such corporate seal;
that it was so affixed pursuant to authority of the Board
of Directors of such corporation; and that he signed his
name thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Karla J. Carey
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Stevens Point Beverage Co., one of
________________
the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
Vice President of Barton Management, Inc., corporate
________________
general partner of Monarch Wine Company, Limited
Partnership, one of the Guarantors described in and
which executed the foregoing instrument; that he knows
the corporate seal of such corporation; that the seal
affixed to said instrument is such corporate seal; that
it was so affixed pursuant to authority of the Board of
Directors of such corporation; and that he signed his
name thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF )
__________________
) ss.:
COUNTY OF )
_________________
On the day of , 1993, before me
_____ _________
personally came , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at
__________
; that
_________________________________________________
he is
of Barton Management, Inc., one of the
________________
corporations described in and which executed the
foregoing instrument; that he knows the corporate seal
of such corporation; that the seal affixed to said
instrument is such corporate seal; that it was so
affixed pursuant to authority of the Board of Directors
of such corporation; and that he signed his name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/
_________________________
STATE OF NEW YORK )
__________________
) ss.:
COUNTY OF ONTARIO )
_________________
On the 27th day of December , 1993, before me
_____ _________
personally came Richard Sands , to me known, who
____________________
being by me duly sworn, did depose and say that he
resides at 116
__________
Buffalo Street, Canandaigua, New York 14424 ; that
_________________________________________________
he is
President of Vintners International Company,
________________
Inc., one of the corporations described in and which
executed the foregoing instrument; that he knows the
corporate seal of such corporation; that the seal
affixed to said instrument is such corporate seal; that
it was so affixed pursuant to authority of the Board of
Directors of such corporation; and that he signed his
name thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Judith A. Celentani
_________________________
STATE OF NEW YORK )
_________
) ss.:
COUNTY OF NEW YORK)
________
On the 21st day of December, 1993, before me
____ ________
personally came W.B. Dodge , to me known, who,
________________
being by me duly sworn, did depose and say that she
resides at
___________________
3582 Kenora Pl., Seaford, N.Y. ;
_____________________________________________________
that she is an Authorized Officer of Chemical Bank, one
of the corporations described in and which executed the
above instrument; that she knows the corporate seal of
such corporation; that the seal affixed to said
instrument is such corporate seal; that it was
affixed pursuant to authority of the Board of Directors
of such corporation; and that she signed her name
thereto pursuant to like authority.
(NOTARIAL
SEAL)
s/Emily Fayan
_________________________
<PAGE>
SCHEDULE I
1. $2,000,000 Ontario County Industrial Development
Agency 1974 Industrial Development Revenue Bond (Canandaigua Wine
company, Inc. Facility). Financing documents include (a)
Mortgage and Indenture of Trust dated September 1, 19974 (as
amended and supplemented) from the Ontario County Industrial
Development Agency ("Agency") to the Chase Manhattan Bank, N.A.
(as successor in interest to Chase Lincoln First Bank)
("Trustee"); (b) Guaranty Agreement dated September 1, 1974 from
CWC to Trustee; (c) Ground Lease dated September 1, 1974 (as
amended and supplemented) between CWC and Agency; and (d) Lease
Agreement dated September 1, 1974 (as amended and supplemented)
between Company and Agency. A supplemental bond in the amount of
$2,370,000 was issued by the Agency in January, 1980. Aggregate
principal amount outstanding as of October 8, 1993 - $711,000.
2. Consulting and Non-Competition Agreement dated
February 12, 1988 between California Products Company and Joseph
Brocia, Jr. On January 28, 1988, the Board of Directors of
California Products Company authorized eight annual deferred
compensation payments of $25,000 each to Mr. Brocia beginning
February 1, 1988 and ending February 1, 1995.
3. Consulting and Non-Competition Agreement dated
February 12, 1988 between California Products Company and John
Paul. On January 28, 1988, the Board of Directors of California
Products Company authorized eight annual deferred compensation
payments of $25,000 each to Mr. Paul beginning February 1, 1988
and ending February 1, 1995.
4. CWC, pursuant to a Guaranty dated February 12, 1988
to John Paul and Joseph Brocia, Jr., has agreed to guarantee the
obligations of California Products Company under the Consulting
and Non-Competition Agreements and deferred compensation
arrangements described in Part A, Items 3 and 4 above, as well as
the obligations of Bisceglia Brothers Wine Co. ("Bisceglia")
pursuant to a certain Stock Purchase Agreement dated January 25,
1988 among Bisceglia, California Products Company, John Paul and
Joseph Brocia, Jr.
5. One loan each against cash surrender values of two
officer life insurance policies, one by Connecticut Mutual Life
Insurance Company and one by Phoenix Mutual Life Insurance
Company. Borrowings are usually made annually against increased
cash surrender values.
6. Guarantee by CWC in connection with Importer
Agreement effective as of September 1, 1989, as amended, between
Barton Beers, Ltd., and Extrade, S.A. de C.V., as assignee of
Cerveceria Modelo, S.A. de C.V.
7. $960,000 Promissory Note issued by Barton
Incorporated ("Barton") in favor of Kenneth P. Shibilski as
Seller's Representative (as defined in the Note), dated
September 30, 1992. The amounts due under the Note are
collateralized pursuant to an Escrow Agreement with American
National Bank and Trust Company of Chicago, acting as escrow
agent, currently holds $666,667 in escrow.
8. Under repurchase agreements with Ralph D. Silver and
Michael J. Mazzoni former shareholders of Barton, Barton has
remaining principal amounts due as follows: for fiscal 1994 -
$5,255,201, and for fiscal 1995 - $3,000,000, plus interest at
rates ranging from 1% below prime rate to prime rate.
9. Under a separation agreement with Michael J. Mazzoni
a former shareholder and employee of Barton, Barton has remaining
obligations to pay a "non-compete" fee as follows: $75,000 on
July 31, 1994 and $775,000 on July 31, 1995.
10. Under the terms of an Employment Agreement with
Thomas Schwalm, a former employee, Barton is obligated to pay
post-termination amounts as follows: $410,000 in 1994 and
$410,000 in 1995, reduced by an "earned income" received by the
former employee through March 31, 1995.
<PAGE>
SCHEDULE II
1. Amendment and Restatment dated as of June 29, 1993 of
Credit Agreement dated as of September 30, 1991, as amended, and
the documents and instruments related thereto.
2. Restated Certificate of Incorporation of Canandaigua Wine
Company, Inc. (provides for a dividend preference ont he Class A
capital stock).
3. $2,000,000 Onatario County Industrial Development Agency
1974 Industrial Development Revenue Bond (Canandaigua Wine
Company, Inc. Facility). Financing documents include (a)
Mortgage and Indenture of Trust dated September 1, 19974 (as
amended and supplemented) from the Ontario County Industrial
Development Agency ("Agency") to the Chase Manhattan Bank, N.A.
(as successor in interest to Chase Lincoln First Bank)
("Trustee"); (b) Guaranty Agreement dated September 1, 1974 from
CWC to Trustee; (c) Ground Lease dated September 1, 1974 (as
amended and supplemented between CWC and Agency; and (d) Lease
Agreement dated September 1, 1974 (as amended and supplemented
between Company and Agency.
<PAGE>
EXHIBIT A
_________
INTERCOMPANY NOTE
_________________
Evidence of all loans or advances ("Loans") made
hereunder shall be reflected on the grid attached hereto. FOR
VALUE RECEIVED, , a corporation (the
________ ____________
"Maker"), HEREBY PROMISES TO PAY ON DEMAND to the order of
_____
(the "Holder") the principal sum of the aggregate unpaid
principal amount of all Loans (plus accrued interest thereon) at
any time and from time to time made hereunder which has not been
previously paid.
All capitalized terms used herein that are defined in, or
by reference in, the Indenture among Canandaigua Wine Company,
Inc., a Delaware Corporation (the "Company"), the guarantors a
party thereto and Chemical Bank, as trustee,, dated as of
December 27, 1993 (the "Indenture"), have the meanings assigned
to such terms therein, or by reference therein, unless otherwise
defined.
ARTICLE I
TERMS OF INTERCOMPANY NOTE
Section 1.01 Note Forgivable. Unless the Maker of the
_______________
Loan hereunder is either of the Company or any Guarantor, the
Holer may not forgive any amounts owing under this intercompany
note.
Section 1.02 Interest: Prepayment. (a) The interest
_____________________
rate ("Interest Rate") on the Loans shall be a rate per annum
reflected on the grid attached hereto.
(b) The interest, if any, payable on each of the Loans
shall accrue from the date such Loan is made and, subject to
Section 2.01, shall be payable upon demand of the Holder.
(c) If the principal or accrued interest, if any, of the
Loans is not paid on the date demand is made, interest on the
unpaid principal and interest will accrue at a rate equal to the
Interest Rate, if any, plus 100 basis points per annum from
maturity until the principal and interest on such Loans are fully
paid.
(d) Subject to Section 2.01, any amounts hereunder may be
prepaid at any time by the Maker.
Section 1.03 Subordination. All loans made to either of
_____________
the Company or any Guarantor shall be subordinated in right of
payment to the payment and performance of the obligations of the
Company and any Subsidiary under the Indenture, the Securities,
the Guarantees or any other Indebtedness ranking senior to or
pari passu with the Securities, or any Guarantees, including,
____ _____
without limitation, any Indebtedness incurred under the Credit
Agreement; provided that with respect to a Subsidiary in any
________
specific instance, such Subsidiary is also an obligor under the
Indenture, the Securities, a Guarantee or such other senior or
pari passu Indebtedness, as the case may be, whether as a
____ _____
borrower, guarantor or pledgor of collateral.
ARTICLE II
EVENTS OF DEFAULT
Section 2.01 Events of Default. If after the date of
_________________
issuance of this Loan (i) an Event of Default has occurred under
the Indenture, (ii) an "Event of Default" (as defined) has
occurred under the Credit Agreement, or any refinancing of the
Credit Agreement or (iii) an "event of default" (as defined) has
occurred on any other Indebtedness of the Company or any
Guarantor, then (x) in the event the Maker is not either one of
the Company or a Guarantor, all amounts owing under the Loans
hereunder shall be immediately due and payable to the Holder, and
(y) in the event the Maker is either the Company or a Guarantor,
the amounts owing under the Loans hereunder shall not be due and
payable; provided, however, that if such Event of Default or
________ _______
event of default has been waived, cured or rescinded, such
amounts shall no longer be due and payable in the case of clause
(x), and such amounts may be payable in the case of clause (y).
If the Holder is a Subsidiary, then the Holder hereby agrees that
if it receives any payments or distributions on any Loan from the
Company or a Guarantor which is not payable pursuant to clause
(y) of the prior sentence after any Event of Default or event or
default described in clauses (i), (ii) or (iii) above has
occurred, is continuing and has not been waived, cured or
rescinded, it will pay over and deliver forthwith to the Company
or such Guarantor, as the case may be, all such payments and
distributions.
ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments, Etc. No amendment or waiver of
_______________
any provision of this intercompany note, or consent to depart
herefrom is permitted at any time for any reason, except with the
consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities.
Section 3.02 Assignment. No party to this Agreement may
__________
assign, in whole or in part, any of its rights and obligations
under this intercompany note, except to its legal successor
interest.
Section 3.03 Third Party Beneficiaries. The holders of
_________________________
the Securities or any other Indebtedness ranking pari passu with
____ _____
or senior to, the Securities or any Guarantees, including without
limitation, any Indebtedness incurred under the Credit Agreement,
shall be third party beneficiaries to this intercompany note and
shall have the right to enforce this intercompany note against
the Company or any of its Subsidiaries.
Section 3.04 Headings. Article and Section headings on
________
this intercompany note are included for convenience of reference
only and shall not constitute a part of this intercompany note
for any other purposes.
Section 3.05 Entire Agreement. This intercompany note
________________
sets forth the entire agreement of the parties with respect to
its subject matter and supersedes all previous understandings,
written or oral, in respect thereof.
Section 3.06 GOVERNING LAW. THIS AGREEMENT SHALL BE
_____________
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF).
AMENDMENT NO. 4 TO THE
CANANDAIGUA WINE COMPANY, INC.
STOCK OPTION AND STOCK
APPRECIATION RIGHT PLAN
Pursuant to Paragraph 15 of the Company's Stock Option and
Stock Appreciation Right Plan (the "Plan"), the Board of Directors
hereby amends the Plan, effective October 28, 1993, as set forth
below; provided that if the stockholders of the Company fail to
approve and ratify this Amendment at the next Annual Meeting of
stockholders of the Company, then this Amendment shall be null and
void and any options granted pursuant to this Amendment shall be
automatically cancelled.
Paragraph 3 of the Plan is amended to read as follows:
3. STOCK SUBJECT TO OPTIONS AND SARs. Subject to the
provisions of Section 11 hereof, options may be granted under
the Plan to purchase, and SARs may be granted with respect
to, in the aggregate, not more than three million (3,000,000)
Shares. The Shares may, in the discretion of the Board of
Directors of the Company, consist either in whole or in part
of authorized but unissued Shares or Shares held in the
treasury of the Company, and the Shares may, in the
discretion of the Committee, become subject to incentive
stock options, non-statutory stock options, or SARs. Any
Shares subject to an option or SAR which for any reason
expires or is terminated unexercised or without maturing as
to such Shares shall continue to be available for options or
SARs under the Plan.
IN WITNESS WHEREOF, Canandaigua Wine Company, Inc. has caused
this instrument to be executed as of the 28th day of October,
1993.
CANANDAIGUA WINE COMPANY, INC.
By: ________________________
Title:
EXHIBIT 11
CANANDAIGUA WINE COMPANY, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE
FOR THE QUARTERS ENDED NOVEMBER 30, 1993 AND 1992
<TABLE>
<CAPTION>
November 30, 1993 November 30, 1992
_________________ _____________________
Net income per common
equivalent share: Fully Fully
Primary Diluted Primary Diluted
______________________ ______________________
<S> <C> <C> <C> <C>
Net income available to common $5,653,212 $5,653,212 $3,603,704 $3,603,704
shares
Adjustments:
Assumed exercise of
convertible debt - 419,517 - 651,000
___________ __________ __________ __________
Net income available to common
and common equivalent shares $5,653,212 $6,072,729 $3,603,704 $4,254,704
__________ __________ __________ __________
Shares:
Weighted average common shares
outstanding 13,770,671 13,770,671 11,635,253 11,635,253
Adjustments:
(1) Assumed exercise of
convertible debt - 2,177,726 - 3,293,085
(2) Assumed exercise of incentive
stock options 207,678 230,478 124,743 124,743
(3) Assumed exercise
of options 55,032 73,422
__________ __________ __________ __________
Total shares 14,033,381 16,252,297 11,759,996 15,053,081
__________ __________ __________ __________
Net income per common share $ .40 $ .37 $ .31 $ .28
____ ___ ___ ___
</TABLE>
