<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 1999
-----------------
COMMISSION FILE NUMBER 0-7570
DELAWARE CANANDAIGUA BRANDS, INC. 16-0716709
AND ITS SUBSIDIARIES:
NEW YORK BATAVIA WINE CELLARS, INC. 16-1222994
NEW YORK CANANDAIGUA WINE COMPANY, INC. 16-1462887
NEW YORK CANANDAIGUA EUROPE LIMITED 16-1195581
ENGLAND AND WALES CANANDAIGUA LIMITED ---
NEW YORK POLYPHENOLICS, INC. 16-1546354
NEW YORK ROBERTS TRADING CORP. 16-0865491
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
WISCONSIN STEVENS POINT BEVERAGE CO. 39-0638900
ILLINOIS MONARCH IMPORT COMPANY 36-3539106
GEORGIA THE VIKING DISTILLERY, INC. 58-2183528
(State or other (Exact name of registrant as (I.R.S. Employer
jurisdiction of specified in its charter) Identification
incorporation or No.)
organization)
300 WillowBrook Office Park, Fairport, New York 14450
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 393-4130
--------------
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed to be incorporated into registration
statement No. 333-67037:
1.1. Underwriting Agreement dated February 25, 1999 by and among Canandaigua
Brands, Inc., Batavia Wine Cellars, Inc., Barton Incorporated, Barton Brands,
Ltd., Barton Beers, Ltd., Barton Brands of California, Inc., Barton Brands of
Georgia, Inc., Barton Distillers Import Corp., Barton Financial Corporation,
Stevens Point Beverage Co., Canandaigua Limited, Monarch Import Company,
Canandaigua Wine Company, Inc., The Viking Distillery, Inc., Canandaigua Europe
Limited, Roberts Trading Corp. and Polyphenolics, Inc., as Issuers, and Chase
Securities Inc., Credit Suisse First Boston Corporation, Fleet Securities, Inc.,
Schroder & Co. Inc. and Scotia Capital Markets (USA) Inc., as Underwriters.
99.1 Form of Indenture dated as of February 25, 1999 by and among Canandaigua
Brands, Inc., as Issuer, and Batavia Wine Cellars, Inc., Barton Incorporated,
Barton Brands, Ltd., Barton Beers, Ltd., Barton Brands of California, Inc.,
Barton Brands of Georgia, Inc., Barton Distillers Import Corp., Barton Financial
Corporation, Stevens Point Beverage Co., Canandaigua Limited, Monarch Import
Company, Canandaigua Wine Company, Inc., The Viking Distillery, Inc.,
Canandaigua Europe Limited, Roberts Trading Corp. and Polyphenolics, Inc., as
Guarantors, and Harris Trust and Savings Bank, as Trustee.
99.2 Form of Supplemental Indenture No. 1 dated as of February 25, 1999 by and
among Canandaigua Brands, Inc., as Issuer, and Batavia Wine Cellars, Inc.,
Barton Incorporated, Barton Brands, Ltd., Barton Beers, Ltd., Barton Brands of
California, Inc., Barton Brands of Georgia, Inc., Barton Distillers Import
Corp., Barton Financial Corporation, Stevens Point Beverage Co., Canandaigua
Limited, Monarch Import Company, Canandaigua Wine Company, Inc., The Viking
Distillery, Inc., Canandaigua Europe Limited, Roberts Trading Corp. and
Polyphenolics, Inc., as Guarantors, and Harris Trust and Savings Bank, as
Trustee.
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 BRANDS, INC.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Senior Vice
President and Chief Financial
Officer
SUBSIDIARIES
BATAVIA WINE CELLARS, INC.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA WINE COMPANY, INC.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
<PAGE>
CANANDAIGUA EUROPE LIMITED
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
CANANDAIGUA LIMITED
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Director
(Principal Financial Officer and
Principal Accounting Officer)
POLYPHENOLICS, INC.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
and Treasurer
ROBERTS TRADING CORP.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Treasurer
BARTON INCORPORATED
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS, LTD.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BEERS, LTD.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
<PAGE>
BARTON BRANDS OF CALIFORNIA, INC.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON BRANDS OF GEORGIA, INC.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON DISTILLERS IMPORT CORP.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
BARTON FINANCIAL CORPORATION
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
STEVENS POINT BEVERAGE CO.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
MONARCH IMPORT COMPANY
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
THE VIKING DISTILLERY, INC.
Dated: March 3, 1999 By: /s/ Thomas S. Summer
--------------------------------
Thomas S. Summer, Vice President
<PAGE>
EXHIBIT 1.1
CANANDAIGUA BRANDS, INC.
$200,000,000
8 1/2 % Senior Subordinated Notes due 2009
UNDERWRITING AGREEMENT
----------------------
February 25, 1999
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
FLEET SECURITIES, INC.
SCHRODER & CO. INC.
SCOTIA CAPITAL MARKETS (USA) INC.
c/o Chase Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017
Ladies and Gentlemen:
Canandaigua Brands, Inc., a Delaware corporation (the "Company"),
-------
proposes to issue and sell $200,000,000 aggregate principal amount of its 8 1/2%
Senior Subordinated Notes due 2009 (the "Notes"). The Notes will be issued
-----
pursuant to an Indenture to be dated as of February 25, 1999 (the "Base
----
Indenture") by and among the Company, the Guarantors (as defined below) and
- ---------
Harris Trust and Savings Bank, as trustee (the "Trustee"), as supplemented by a
-------
Supplemental Indenture to be dated as of February 25, 1999 (the "Supplemental
------------
Indenture" and, together with the Base Indenture, the "Indenture"). As of the
- ---------
Closing Date (as defined herein), the Notes will be unconditionally guaranteed
on a senior subordinated basis, as to payment of principal, premium, if any, and
interest, jointly and severally, by each of Barton Distillers Import Corp.,
Batavia Wine Cellars, Inc., Canandaigua Wine Company, Inc., Canandaigua Europe
Limited, Roberts Trading Corp. and Polyphenolics, Inc., each a New York
corporation, Canandaigua Limited, a corporation organized under the laws of
England and Wales, Barton Financial Corporation, Barton Incorporated and Barton
Brands, Ltd., each a Delaware corporation, Barton Beers, Ltd., a Maryland
corporation, Barton Brands of California, Inc., a Connecticut corporation,
Barton Brands of Georgia, Inc. and The Viking Distillery, Inc, each a Georgia
corporation, Stevens Point Beverage Co., a Wisconsin corporation, and Monarch
Import
<PAGE>
-2-
Company, an Illinois corporation (collectively, the "Guarantors" and,
----------
together with the Company, the "Issuers"), pursuant to the terms of the
-------
Indenture (the "Guarantees"). The Notes and the Guarantees are sometimes
----------
referred to herein together as the "Securities." The Issuers hereby confirm
----------
their agreement with Chase Securities Inc. ("CSI"), Credit Suisse First Boston
---
Corporation, Fleet Securities, Inc., Schroder & Co. Inc. and Scotia Capital
Markets (USA) Inc. (together with CSI, the "Underwriters") concerning the
------------
purchase of the Securities by the several Underwriters.
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Prospectus (as defined in Section 1).
1. Representations, Warranties and Agreements of the Issuers. The
---- ---------------------------------------------------------
Company and the Guarantors, jointly and severally, represent and warrant to and
agree with the Underwriters as of the date hereof and as of the Closing Date
that:
(a) A registration statement on Form S-3 (No. 333-67037), including a
form of basic prospectus relating to certain debt and equity securities
(the "Shelf Securities") to be offered from time to time by the Company
-----------------
and each of the preliminary supplements to the basic prospectus relating
to the offering of the Securities has (i) been prepared by the Company in
conformity with the requirements of the United States Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations (the
--------------
"Rules and Regulations") of the United States Securities and Exchange
---------------------
Commission (the "Commission") thereunder, (ii) been filed with the
----------
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and any amendments
thereto, as well as copies of the Preliminary Prospectus (as defined
below), have been delivered by the Company to you. The Company has also
filed with or proposes to file with the Commission pursuant to Rule 424
under the Securities Act ("Rule 424") a final prospectus supplement
--------
relating to the Securities (a "Prospectus Supplement"). The registration
---------------------
statement, as amended to the date of this Agreement, including the exhibits
and schedules thereto, if any, any registration statement filed pursuant to
Rule 462(b) under the Securities Act and all documents incorporated by
reference or deemed to be incorporated by reference therein, is hereinafter
referred to as the "Registration Statement" and the related prospectus
----------------------
covering the Shelf Securities in the form first used to confirm sales is
hereinafter referred to as the "Basic Prospectus." The Basic Prospectus as
----------------
supplemented by any applicable Prospectus Supplement is hereinafter
referred to as the "Prospectus." "Effective Time" means the date and the
---------- --------------
time as of which the Registration Statement, or the most recent post-
effective amendment thereof, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time;
--------------
"Preliminary Prospectus" means any preliminary form of Prospectus
-----------------------
specifically relating to the Notes, in the form first filed with, or
<PAGE>
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transmitted for filing to, the Commission pursuant to Rule 424. Any
reference in this Agreement to the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus previously filed with the Commission
pursuant to Rule 424 or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Securities Act which were filed under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") on or before the
------------
date of this Agreement or the date of the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus or the Prospectus, as the case may
be; and any reference to "amend," "amendment" or "supplement" with respect
to the Registration Statement, the Basic Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed under the Exchange Act after the date of this Agreement, or
the date of the Registration Statement, the Basic Prospectus, any
Preliminary Prospectus or the Prospectus, as the case may be, which are
deemed to be incorporated by reference therein. The Commission has not
issued any order preventing or suspending the use of the Prospectus or the
effectiveness of the Registration Statement.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the Rules and Regulations and do
-------------------
not and will not, as of the applicable Effective Date (as to the
Registration Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances in
which they were made) not misleading; on the Closing Date, the Indenture
will conform in all material respects with the applicable requirements of
the Trust Indenture Act and the rules and regulations of the Commission
thereunder; and, at the Effective Time, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Prospectus (together
with any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to (i) that
part of the Registration Statement which shall constitute the Statement of
Eligibility and Qualifications (Form T-1) of the Trustee under the Trust
<PAGE>
-4-
Indenture Act or (ii) information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Underwriter specifically for use therein (the "Underwriters' Information").
-------------------------
(c) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects to
the requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(d) Each Preliminary Prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 complied when so filed in all material respects with
the Securities Act and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to Underwriters'
Information.
(e) The Company and each of its consolidated subsidiaries (the
"Subsidiaries") have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, with full power and authority (corporate
and other) to own their properties and conduct their respective businesses
as described in the Prospectus, and are duly qualified to transact business
as foreign corporations in good standing under the laws of each
jurisdiction where the ownership or leasing of their respective properties
or the conduct of their respective businesses require such qualification,
except where the failure to so qualify would not have a material adverse
effect on the business, condition (financial or otherwise), prospects or
operations of the Company and its Subsidiaries considered as a whole (a
"Material Adverse Effect"); the Company had at the dates indicated an
------------------------
authorized capitalization as set forth in the Prospectus, and the
<PAGE>
-5-
issued shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable, and the outstanding
shares of capital stock of each of the Company's Subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned beneficially by the
Company free and clear of all liens, encumbrances, equities and claims
(collectively, "Liens") except for the Liens under the First Amended and
-----
Restated Credit Agreement dated as of November 2, 1998 between the Company,
the guarantors named therein, the lenders signatory thereto, and The Chase
Manhattan Bank, as Administrative Agent (the "Credit Agreement"). Neither
----------------
the Company nor any of the Guarantors is in violation of its respective
charter or bylaws and neither the Company nor any of the Guarantors is in
default (nor has an event occurred with notice, lapse of time or both that
would constitute a default) in the performance of any obligation, agreement
or condition contained in any agreement, lease, indenture or instrument of
the Company or any Guarantor where such violation or default would have a
Material Adverse Effect.
(f) The Issuers have full power and authority to enter into this
Agreement and the Indenture and to issue, sell and deliver the Notes, in
the case of the Company, and the Guarantees, in the case of the Guarantors
(collectively, the "Transaction Documents"), to be sold by them to the
---------------------
Underwriters as provided herein and therein. The execution, delivery and
performance of this Agreement, the Indenture and the Securities by the
Company or any Guarantor, as the case may be, and the consummation by the
Company or any Guarantor, as the case may be, of the transactions
contemplated hereby and thereby does not and will not conflict with or
result in a breach or violation by the Company or any Subsidiary, as the
case may be, of any of the terms or provisions of, constitute a default by
the Company or any Subsidiary, as the case may be, under, or result in the
creation or imposition of any lien, charge, security interest or
encumbrance upon any of the assets of the Company or any Subsidiary, as the
case may be, pursuant to the terms of, (A) the Credit Agreement and any
other indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any Subsidiary, as the case
may be, is a party or to which any of them or any of their respective
properties is subject, (B) the charter or bylaws of the Company or any
Subsidiary, as the case may be, or (C) any statute, judgment, decree,
order, rule or regulation of any court, governmental agency or regulatory
agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties or assets except for any
conflict, breach, default, lien, charge, security interest or encumbrance
that would not have a Material Adverse Effect.
<PAGE>
-6-
(g) The execution and delivery of the Indenture has been duly
authorized by all necessary corporate action of the Issuers and, when duly
executed and delivered in accordance with their terms by each party
thereto, will be a legal, valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws relating to creditors'
rights generally, and subject, as to enforceability, to general principles
of equity (regardless of whether such enforcement may be sought in a
proceeding in equity or at law). The issuance, execution and delivery of
the Notes have been duly authorized by all necessary corporate action of
the Company and, when executed, issued and delivered by the Company and
authenticated by the Trustee and paid for in accordance with this
Agreement, will be the legal, valid, binding and enforceable obligations of
the Company, entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally, and subject, as to enforceability, to general principles
of equity (regardless of whether such enforcement may be sought in a
proceeding in equity or at law). The issuance, execution and delivery of
the Guarantees have been duly authorized by all necessary corporate action
of each Guarantor and, when executed, issued and delivered by each
Guarantor and authenticated by the Trustee and paid for in accordance with
this Agreement, will be the legal, valid, binding and enforceable
obligations of each Guarantor, entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether such enforcement may be sought
in a proceeding in equity or at law). The execution and delivery of this
Agreement by the Issuers have been duly authorized by all necessary
corporate action, and this Agreement has been duly executed and delivered
by the Issuers and is the valid and legally binding agreement of each of
the Issuers.
(h) Except as described or referred to in the Prospectus, there is not
pending, or to the knowledge of the Issuers threatened, any action, suit,
proceeding, inquiry or investigation, to which the Company or any of the
Subsidiaries is a party, or to which the property of the Company or any of
the Subsidiaries is subject, before or brought by any court or governmental
agency or body, which, if determined adversely to the Company or any of
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect or might materially adversely affect the consummation of the
offering of the Securities pursuant to this Agreement; and all pending
legal or governmental proceedings to which the Company or any of the
Subsidiaries is a party or that affect any of their respective properties
that are not described in the Prospectus, including ordinary routine
litigation incidental to the business, would not, in the aggregate, result
in a Material Adverse Effect.
<PAGE>
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(i) Arthur Andersen LLP are independent certified public accountants
with respect to the Company and its consolidated Subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants ("AICPA") and its interpretations
-----
and rulings thereunder. The historical financial statements of the Company
(including the related notes) contained in the Prospectus comply as to form
in all material respects with the requirements applicable to a registration
statement on Form S-3 under the Securities Act; such historical financial
statements have been prepared in accordance with United States generally
accepted accounting principles ("GAAP") consistently applied throughout the
----
periods covered thereby and fairly present the financial position of the
Company at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated. KPMG
Audit plc are independent chartered accountants with respect to Matthew
Clark plc within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and its interpretations and rulings thereunder. The
historical financial statements of Matthew Clark plc have been prepared in
accordance with United Kingdom GAAP consistently applied throughout the
periods covered thereby and fairly present the financial position of
Matthew Clark plc at the respective dates indicated and the results of its
operations and cash flows for the respective periods indicated and such
financial statements have to the extent required by the Commission for each
period presented been properly reconciled to United States GAAP and contain
a discussion of all differences between US GAAP and UK GAAP. The
historical financial information of Matthew Clark plc contained in the
Prospectus has been converted into United States Dollars on a consistent
basis in accordance with US GAAP and the rules and regulations of the
Commission. The financial information contained in the Prospectus and
relating to the Company is derived from the accounting records of the
Company and its Subsidiaries and fairly presents the information purported
to be shown thereby. The financial information contained in the Prospectus
and relating to Matthew Clark plc is derived from the accounting records of
Matthew Clark plc and fairly presents the information purported to be shown
thereby. The pro forma financial statements contained in the Prospectus
have been prepared on a basis consistent with the historical financial
statements contained in the Prospectus (except for the pro forma
adjustments specified therein), include all material adjustments to the
historical financial statements required by Rule 11-02 of Regulation S-X
under the Securities Act and the Exchange Act to reflect the transactions
described in the Registration Statement, the Prospectus or in the documents
incorporated therein by reference, are based on assumptions made on a
reasonable basis and fairly present the historical and proposed
transactions described in the Registration Statement, the Prospectus or in
the documents incorporated therein by reference (including the transactions
contemplated by the Transaction Documents). The other historical financial
and statistical
<PAGE>
-8-
information and data included in the Registration Statement, the Prospectus
or in the documents incorporated therein by reference fairly presents, in
all material respects, the information purported to be shown thereby.
(j) Except as described in or contemplated by the Registration
Statement or the Prospectus, subsequent to February 28, 1998, (i) neither
the Company nor any of the Subsidiaries has sustained any loss or
interference with its business or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree which
would have a Material Adverse Effect; and (ii) there has not been any
change in the capital stock (other than as a result of the exercise of the
Company's outstanding stock options, purchases under the Company's employee
stock purchase plan, any repurchases by the Company under the Stock
Repurchase Program (as defined in the Prospectus) or as a result of the
conversion of the Company's Class B Common Stock (par value $.01 per share)
into Class A Common Stock (par value $.01 per share)) or long-term debt of
the Company or any of the Guarantors, or any other material adverse change,
or any development involving a prospective material adverse change, in or
affecting the business, condition (financial or otherwise), prospects or
operations of the Company and the Subsidiaries taken as a whole.
(k) The Company and each of the Subsidiaries have good and marketable
title to all properties and assets, as described in the Prospectus as owned
by them free and clear of all liens, encumbrances, claims, security
interests or restrictions, except as provided under the Credit Agreement as
such as are described in the Prospectus or do not interfere with the use
made and proposed to be made of such properties by the Company and the
Subsidiaries and would not individually or in the aggregate result in a
Material Adverse Effect; and all of the leases and subleases material to
the business of the Company and the Subsidiaries taken as a whole, and
under which the Company or any of the Subsidiaries holds properties
described in the Prospectus, are in full force and effect and neither the
Company nor any of the Subsidiaries has any notice of any claims of any
sort that has been asserted by anyone adverse to the rights of the Company
or any of the Subsidiaries under such leases or subleases, or affecting or
questioning the rights of the Company or any of the Subsidiaries to the
continued possession of the leased or subleased premises under any such
lease or sublease, which claims would have a Material Adverse Effect.
(l) Each of the Company and the Subsidiaries owns or possesses all
governmental licenses, permits, certificates, consents, orders, approvals
and other authorizations necessary to own, lease and operate its properties
and to conduct its business as presently conducted by it and described in
the Prospectus, except where
<PAGE>
-9-
the failure to own or possess such licenses, permits, certificates,
consents, orders, approvals and other authorizations would not,
individually or in the aggregate, have a Material Adverse Effect
(collectively, "Material Licenses"); all of the Material Licenses are valid
and in full force and effect, except where the invalidity of such Material
License or the failure of such Material License to be in full force and
effect would not, individually or in the aggregate, have a Material Adverse
Effect; and none of the Company or any of its Subsidiaries has received any
notice of proceedings relating to revocation or modification of any such
Material Licenses which would, individually or in the aggregate, have a
Material Adverse Effect.
(m) Each of the Company and each of its Subsidiaries owns or possesses,
or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, trademarks, service marks, trade names
and know-how (including trade secrets and other patentable and/or
unpatentable proprietary or confidential information or procedures)
(collectively, "intellectual property") necessary to carry on its business
---------------------
as presently operated by it, except where the failure to own or possess or
have the ability to acquire any such intellectual property would not,
individually or in the aggregate, have a Material Adverse Effect; and none
of the Company or any of its Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any intellectual property or of any facts which
would render any intellectual property invalid or inadequate to protect the
interest of the Company or any of its Subsidiaries therein and which
infringement or conflict would have a Material Adverse Effect.
(n) None of the Company or any of its Subsidiaries has taken, or will
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of
the price of the Securities.
(o) None of the Company or any of its Subsidiaries is an investment
company within the meaning of the Investment Company Act of 1940, as
amended.
(p) Except as described in the Prospectus, the Company and its
Subsidiaries comply in all material respects with all Environmental Laws
(as defined below), except to the extent that failure to comply with such
Environmental Laws would not individually or in the aggregate have a
Material Adverse Effect. None of the Company or any of its Subsidiaries is
the subject of any pending or, to the knowledge of any of the Issuers,
threatened federal, state or local investigation evaluating whether any
remedial action by the Company or any of its Subsidiaries is needed to
respond to a release of any Hazardous Materials (as defined below) into the
environment, resulting from the Company's or any of its Subsidiaries'
business
<PAGE>
-10-
operations or ownership or possession of any of their properties or assets
or is in contravention of any Environmental Law that would, individually or
in the aggregate, have a Material Adverse Effect. None of the Company or
any of its Subsidiaries has received any notice or claim, nor are there
pending or, to the knowledge of any of the Issuers, threatened lawsuits
against them, with respect to violations of an Environmental Law or in
connection with any release of any Hazardous Material into the environment
that would have a Material Adverse Effect. As used herein, "Environmental
Laws" means any federal, state or local law or regulation applicable to the
Company's or any of its Subsidiaries' business operations or ownership or
possession of any of their properties or assets relating to environmental
matters, and "Hazardous Materials" means those substances that are
regulated by or form the basis of liability under any Environmental Laws.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(r) No relationship, direct or indirect, exists between or among the
Company and its Subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described in the Prospectus or incorporated therein by reference as
permitted by the Rules and Regulations.
(s) No labor problem exists with the employees of the Company or any of
its Subsidiaries or, to the knowledge of the Issuers, is imminent that, in
either case, would have a Material Adverse Effect.
(t) Except as disclosed in the Prospectus, all United States federal
income tax returns of the Company and its Subsidiaries required by law to
be filed have been filed (taking into account extensions granted by the
applicable federal governmental agency) and all taxes shown by such returns
or otherwise assessed, which are due and payable, have been paid, except
for such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided and except for such taxes the
payment of which would not individually or in the aggregate result in a
Material Adverse Effect. All other corporate franchise and income tax
returns of the Company and its Subsidiaries required to be filed pursuant
to applicable foreign, state or local laws have been filed, except insofar
as the failure to file such returns would not individually or in the
aggregate result in a Material Adverse Effect, and all taxes shown on such
returns or otherwise assessed which
<PAGE>
-11-
are due and payable have been paid, except for such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided and except for such taxes the payment of which would not
individually or in the aggregate result in a Material Adverse Effect.
(u) The Company and each of its Subsidiaries maintain (and in the
future will maintain) a system of internal accounting controls sufficient
to provide reasonable assurances that (A) transactions are executed in
accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
("GAAP") and to maintain accountability for assets; (C) access to assets is
------
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(v) The Company and each of its Subsidiaries is in compliance with, and
each such entity has not received any notice of any outstanding violation
of, all laws, regulations, ordinances and rules applicable to it and its
operations, except, in either case, where any failure by the Company or any
of its Subsidiaries to comply with any such law, regulation, ordinance or
rule would not individually or in the aggregate result in a Material
Adverse Effect.
(w) Neither the issuance, sale or delivery of the Securities and the
Guarantees nor the application of the proceeds thereof by the Company as
set forth in the Prospectus will violate Regulations T, U or X of the Board
of Government of the Federal Reserve System or any other regulation of such
Board of Governors.
(x) Each of the Company and its Subsidiaries is, and immediately after
the Closing Date will be, Solvent. As used herein, the term "Solvent"
means, with respect to any such entity on a particular date, that on such
date (A) the fair market value of the assets of such entity is greater than
the amount that will be required to pay the probable liabilities of such
entity on its debts as they become absolute and matured, (B) assuming the
sale of the Securities as contemplated by this Agreement and as described
in the Prospectus, such entity is not incurring debts or liabilities beyond
its ability to pay as such debts and liabilities mature, (C) such entity is
able to realize upon its assets and pay its debts and other liabilities,
including contingent obligations, as they mature and (D) such entity does
not have unreasonably small capital.
<PAGE>
-12-
(y) Other than this Agreement, neither the Company nor any Subsidiary
is a party to any contract, agreement or understanding with any person that
would give rise to a valid claim against the Issuers or any Subsidiary or
the Underwriters for a brokerage commission, finders' fee or like payment
in connection with the offering and sale of the Securities.
(z) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied by the Company.
(aa) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Prospectus or the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
(bb) The Asset Purchase Agreement (the "Diageo Purchase Agreement")
-------------------------
dated February 22, 1999 by and among the Company and Diageo Inc., UDV
Canada Inc., and United Distillers Canada Inc. relating to the purchase by
the Company of certain whisky brands (the "Diageo Acquisition") has been
------------------
duly authorized and executed by the Company. The Company is not in
violation of the terms of the Diageo Purchase Agreement.
Any certificate signed by an officer of the Company or any of the
Guarantors and delivered to the Underwriters or to counsel for the Underwriters
at or prior to the Closing Date pursuant to any section of this Agreement or the
transactions contemplated hereby shall be deemed a representation and warranty
by the Company or such Guarantor, as the case may be, to each Underwriter as to
the matters covered thereby.
2. Purchase of the Securities by the Underwriters. (a) On the
----------------------------------------------
basis of the representations, warranties and agreements contained herein, and
subject to the terms and conditions set forth herein, the Issuers agree to issue
and sell to each of the Underwriters, severally and not jointly, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Issuers,
the principal amount of Securities set forth opposite the name of such
Underwriter on Schedule I hereto at a purchase price equal to 98.000% of the
principal amount thereof. The Issuers shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Issuers acknowledge and agree that the Underwriters may sell
Securities to any affiliate of an Underwriter and that any such affiliate may
sell Securities purchased by it to an Underwriter.
<PAGE>
-13-
(c) The Issuers hereby confirm their engagement of Schroder & Co. Inc.
as, and Schroder & Co. Inc. hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter", within the meaning of
Section (b)(15) of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD") with respect to the offering and sale of
----
the Securities. Schroder & Co., Inc., solely in its capacity as a qualified
independent underwriter and not otherwise, is referred to herein as the "QIU."
The yield to maturity at which the Securities will be sold to the public shall
be no lower than the minimum yield to maturity recommended by Schroder & Co.
Inc. acting as QIU.
3. Delivery of and Payment for the Securities. (a) Delivery of and
---- ------------------------------------------
payment for the Securities shall be made at the offices of Cahill Gordon &
Reindel, New York, New York or at such other place as shall be agreed upon by
the Underwriters and the Company, at 9:00 A.M., New York City time, on March 4,
1999, or at such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Underwriters and the Company (such
date and time of payment and delivery being referred to herein as the "Closing
-------
Date").
- ----
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of same-
day funds to such account or accounts as the Company shall specify prior to the
Closing Date or by such other means as the parties hereto shall agree prior to
the Closing Date against delivery to the Underwriters of the certificates
evidencing the Securities. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of the Underwriters hereunder. Upon delivery, the Securities
shall be in global form, registered in such names and in such denominations as
CSI on behalf of the Underwriters shall have requested in writing not less than
two full business days prior to the Closing Date. The Issuers agree to make one
or more global certificates evidencing the Securities available for inspection
by CSI on behalf of the Underwriters in New York, New York at least 24 hours
prior to the Closing Date.
4. Further Agreements of the Company. Each of the Issuers agrees
---------------------------------
with each of the several Underwriters:
(a) to prepare the Prospectus in a form approved by the Underwriters
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; except for such post-effective amendment made under
Rule 462(d) under the Securities Act, which amendment shall be approved by
the Underwriters, to make no further amendment
<PAGE>
-14-
or any supplement to the Registration Statement or to the Prospectus prior
to the Closing Date except as permitted herein; to advise the Underwriters,
promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Underwriters with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities; to advise the Underwriters,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal at the earliest possible
time;
(b) to furnish promptly to each Underwriter and to counsel for the
Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) to deliver promptly to each Underwriter such number of the
following documents as such Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings), (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Securities and if at such time any events
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary to amend or supplement the Prospectus or to file
<PAGE>
-15-
under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securities Act or the Exchange Act,
to notify the Underwriters and, upon their request, to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as each Underwriter may from time to
time reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance;
(d) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Underwriters, be required by
the Securities Act or requested by the Commission.
(e) during the period when a prospectus is required to be delivered in
connection with the offering or sale of the Securities, prior to filing
with the Commission any amendment to the Registration Statement or
supplement to the Prospectus, any document incorporated by reference in the
Prospectus or any Prospectus pursuant to Rule 424, to furnish a copy
thereof to each Underwriter and counsel for the Underwriters and obtain the
consent of the Underwriters to the filing;
(f) as soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Underwriters an earnings statement of the Company and its Subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the Company,
Rule 158);
(g) for so long as the Securities are outstanding, to furnish the
Underwriters copies of any annual reports, quarterly reports and current
reports filed by the Company with the Commission on Forms 10-K, 10-Q and 8-
K, or such other similar forms as may be designated by the Commission, and
such other documents, reports and information as shall be furnished by the
Company to the Trustee or to the holders of the Securities pursuant to the
Indenture or the Exchange Act or any rule or regulation of the Commission
thereunder;
(h) promptly from time to time take such action as the Underwriters may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as the Underwriters may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as required for the
resale of the Securities;
<PAGE>
-16-
(i) for a period of 180 days from the date of the Prospectus, not to
offer for sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement for, or announce any offer,
sale, contract for sale of or other disposition of any unsecured debt
securities issued or guaranteed by the Company or any of its Subsidiaries
(other than the Securities) without the prior written consent of CSI not to
be unreasonably withheld;
(j) not to, for so long as the Securities are outstanding, be or
become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(k) in connection with the offering of the Securities, until CSI on
behalf of the Underwriters shall have notified the Company of the
completion of the distribution of the Securities, not to, and to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person
to purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Securities;
(l) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Underwriters;
(m) to furnish to each of the Underwriters on the date hereof a copy of
each of the independent accountants' reports included in the Prospectus
signed by the accountants rendering such report;
(n) to do and perform all things required to be done and performed by
it under this Agreement that are within its control prior to or after the
Closing Date, and to use its best efforts to satisfy all conditions
precedent on its part to the delivery of the Securities;
(o) to not take any action prior to the execution and delivery of the
Indenture which, if taken after such execution and delivery, would have
resulted in a default or an event of default under the Indenture;
<PAGE>
-17-
(p) not to take any action prior to the Closing Date which would
require the Prospectus to be amended or supplemented pursuant to Section
4(d);
(q) prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to any Issuer, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral marketing
communications and earnings announcements in the ordinary course of
business and consistent with the past practices of such Issuer and of which
the Underwriters are notified), without the prior written consent of the
Underwriters, unless in the judgment of such Issuer and its counsel, and
after notification to the Underwriters, such press release or communication
is required by law; and
(r) to apply the net proceeds from the sale of the Securities as set
forth in the Prospectus under the heading "Use of Proceeds."
5. Conditions of Underwriters' Obligations. The respective
---------------------------------------
obligations of the several Underwriters hereunder are subject to the accuracy,
on and as of the date hereof and the Closing Date, of the representations and
warranties of each of the Issuers contained herein, to the accuracy of the
statements of each of the Issuers and their respective officers made in any
certificates delivered pursuant hereto, to the performance by each of the
Issuers of its respective obligations hereunder and to each of the following
additional terms and conditions:
(a) All of the representation and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) The Prospectus shall have been timely filed with the Commission in
accordance with the Securities Act; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(c) The Prospectus (and any amendments or supplements thereto) shall
have been printed and copies distributed to the Underwriters as promptly as
practicable on or following the date of this Agreement or at such other
date and time as to which the Underwriters may agree; and no stop order
suspending the sale of the Securities in any jurisdiction in which the
Underwriters reasonably expect to sell Securities
<PAGE>
-18-
shall have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(d) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Prospectus or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of counsel for the Underwriters, is material or omits
to state any fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(e) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Prospectus, and all other legal matters relating to the Transaction
Documents and the transactions contemplated thereby shall be satisfactory
in all material respects to the Underwriters, and the Issuers shall have
furnished to the Underwriters all documents and information that they or
their counsel may reasonably request to enable them to pass upon such
matters.
(f) McDermott, Will & Emery shall have furnished to the Underwriters
their written opinion, as special securities counsel to the Issuers,
addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriters, substantially to the
effect set forth in Annex A hereto.
-------
(g) Nixon, Hargrave, Devans & Doyle LLP, special counsel to the
Issuers, shall have furnished to the Underwriters a written opinion,
addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Underwriters, substantially to the effect set
forth in Annex B hereto.
-------
(h) Each of Clifford Chance, special United Kingdom counsel to the
Issuers, and Piper & Marbury, special Maryland counsel to the Issuers,
shall have furnished to the Underwriters a written opinion, addressed to
the Underwriters and dated the Closing Date, in form and substance
satisfactory to the Underwriters, substantially to the effect set forth in
Annex C hereto.
-------
(i) The Underwriters shall have received from Cahill Gordon & Reindel,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to such matters as the Underwriters may reasonably
require, and the Issuers shall have furnished to such counsel such
documents and information as they request for the purpose of enabling them
to pass upon such matters.
<PAGE>
-19-
(j) The Company shall have furnished to the Underwriters letters (the
"Initial Letters") of Arthur Andersen LLP and KPMG Audit Plc, addressed to
----------------
the Underwriters and dated the date hereof, in form and substance
previously approved by the Underwriters and counsel for the Underwriters.
(k) The Company shall have furnished to the Underwriters letters (the
"Bring-Down Letters") of Arthur Andersen LLP and KPMG Audit Plc, addressed
-------------------
to the Underwriters and dated the Closing Date, in form and substance
satisfactory to the Underwriters and counsel for the Underwriters. In
addition, the Company shall have received letters from Arthur Andersen LLP
and KPMG Audit Plc consenting to the use, in connection with the offering
of the Securities, of the audited financial statements of the Company and
its Subsidiaries prepared by such accountants and included in the
Prospectus.
(l) The Company shall have furnished to the Underwriters a certificate,
dated the Closing Date, of its chief executive officer and its chief
financial officer stating that:
(i) The representations, warranties and agreements of the
Company and the Guarantors in Section 1 are true and correct as of the
Closing Date; the Company and the Guarantors have complied with all
agreements contained herein; and the conditions set forth in Sections
5(a) through 5(k) have been fulfilled;
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which is required under the Securities Act to be set forth in
a supplement or amendment to the Registration Statement or the
Prospectus; and
(iii) Subsequent to the date of the most recent financial
statements of the Company and Matthew Clark contained in the
Prospectus, there has been no event or development that can reasonably
be expected to have a Material Adverse Effect, except as set forth in
the Prospectus.
(m) The Indenture shall have been duly executed and delivered by each
of Issuers and the Trustee, and the Notes shall have been duly executed and
delivered
<PAGE>
-20-
by the Company and duly authenticated by the Trustee and the Guarantee of
each Guarantor shall have been duly endorsed thereon.
(n) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Prospectus
(exclusive of any amendment or supplement thereto), other than as expressly
described in the Prospectus, there shall not have been any change in the
capital stock or long-term debt or any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company and
its Subsidiaries taken as a whole, the effect of which, in any such case
described above, is, in the judgment of the Underwriters, so material and
adverse as to make it impracticable or inadvisable to proceed with the sale
or delivery of the Securities on the terms and in the manner contemplated
in this Agreement and the Prospectus (exclusive of any amendment or
supplement thereto).
(o) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency
or body which would, as of the Closing Date, prevent the issuance, sale or
resale of the Securities; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance, sale or resale of the Securities.
(p) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Notes or any of
the Company's other debt securities by any "nationally recognized
statistical rating organization," as such term is defined by the Commission
for purposes of Rule 436(g)(2) of the rules and regulations of the
Commission under the Securities Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review (other
than an announcement with positive implications of a possible upgrading),
its rating of the Notes or any of the Company's other debt securities.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities of
the Company on any exchange or in the over-the-counter market shall have
been suspended, (ii) any moratorium on commercial banking activities shall
have been declared by federal or New York state authorities,
<PAGE>
-21-
(iii) an outbreak or escalation of hostilities or a declaration by the
United States of a national emergency or war or (iv) a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United
States shall be such) the effect of which, in the case of clauses (iii) and
(iv), is, in the judgment of the Underwriters, so material and adverse as
to make it impracticable or inadvisable to proceed with the sale or the
delivery of the Securities on the terms and in the manner contemplated in
this Agreement and in the Prospectus (exclusive of any amendment or
supplement thereto).
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
6. Termination. The obligations of the Underwriters hereunder may
-----------
be terminated by the Underwriters, in their absolute discretion, by notice given
to and received by the Company prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Section 5(n),
(o), (p) or (q) shall have occurred and be continuing or, if the Underwriters
shall decline to purchase the Securities for any reason permitted under this
Agreement.
7. Defaulting Underwriters. (a) If, on the Closing Date, any of
-----------------------
the Underwriters defaults in the performance of its obligations under this
Agreement, the non-defaulting Underwriters may make arrangements for the
purchase of the Securities which such defaulting Underwriter agreed but failed
to purchase by other persons satisfactory to the Company and the non-defaulting
Underwriters, but if no such arrangements are made within 36 hours after such
default, this Agreement shall terminate without liability on the part of the
non-defaulting Underwriters or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 8 and 12 and except that the provisions of Sections 9, 10, 13 and 16
shall not terminate and shall remain in effect. As used in this Agreement, the
term "Underwriters" includes, for all purposes of this Agreement unless the
context otherwise requires, any party not listed in Schedule I hereto that,
----------
pursuant to this Section 7, purchases Securities which a defaulting Underwriter
agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company or the non-defaulting Underwriters for
damages caused by its default. If other persons are obligated or agree to
purchase the Securities of a defaulting Underwriter, either the non-defaulting
Underwriters or the Company may postpone the Closing Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for
the Issuers or counsel for the Underwriters may be necessary in the Prospectus
or in any other document or arrangement, and the Issuers
<PAGE>
-22-
agree to promptly prepare any amendment or supplement to the Prospectus that
effects any such changes.
8. Reimbursement of Underwriters' Expenses. If (a) this Agreement
---------------------------------------
shall have been terminated pursuant to Section 6 or 7, (b) the Issuers shall
fail to tender the Securities for delivery to the Underwriters for any reason
permitted under this Agreement or (c) the Underwriters shall decline to purchase
the Securities for any reason permitted under this Agreement, the Issuers,
jointly and severally, shall reimburse the Underwriters for such out-of-pocket
expenses (including reasonable fees and disbursements of counsel) as shall have
been reasonably incurred by the Underwriters in connection with this Agreement
and the proposed purchase and resale of the Securities. If this Agreement is
terminated pursuant to Section 7 by reason of the default of one or more of the
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of such expenses.
9. Indemnification. (a) Each of the Issuers, jointly and
---------------
severally, shall indemnify and hold harmless each Underwriter (including,
without limitation, Schroder & Co. Inc. acting in its role as QIU), their
respective affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act (collectively referred to for purposes of this Section
9(a) and Section 10 as an "Underwriter"), from and against any loss, claim,
-----------
damage or liability, joint or several, or any action in respect thereof
(including, without limitation, any loss, claim, damage, liability or action
relating to purchases and sales of the Securities), to which such Underwriter
may become subject, whether commenced or threatened, under the Securities Act,
the Exchange Act, any other federal or state statutory law or regulation, at
common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse each Underwriter promptly upon demand for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Issuers
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Underwriters' Information,
or (iii) with respect to the Schroder & Co.
<PAGE>
-23-
Inc. only, its activities as QIU under its engagement pursuant to Section 2(c)
hereof; provided, however, that Schroder & Co. will not be indemnified with
-------- -------
respect to its activities as QIU to the extent that any loss, claim, damage or
liability arising from Schroder & Co.'s activities as QIU is finally judicially
determined by a court of competent jurisdiction not subject to further appeal to
have resulted from the gross negligence or willful misconduct of Schroder & Co.
The foregoing indemnity agreement is in addition to any liability which the
Issuers may otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter; provided, further, however, that with
respect to any such untrue statement in or omission from the Preliminary
Prospectus, the indemnity agreement contained in this Section 9(a) shall not
inure to the benefit of any such Underwriter to the extent that the sale of the
Securities to the person asserting any such loss, claim, damage, liability or
action was an initial resale by such Underwriter and any such loss, claim,
damage, liability or action of or with respect to such Underwriter results from
the fact that both (A) to the extent required by applicable law, a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such Securities to such person and (B) the untrue
statement in or omission from the Preliminary Prospectus was corrected in the
Prospectus and the Prospectus does not contain any other untrue statement or
omission or alleged untrue statement or omission unless in, either case, such
failure to deliver the Prospectus was a result of non-compliance by the Issuers
with Section 5(c).
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each of the Issuers, their respective affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls any Issuer within the meaning of Section 15 the Securities Act
or Section 20(a) of the Exchange Act (collectively referred to for purposes of
this Section 9(b) and Section 10 as the "Issuers"), from and against any loss,
-------
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Issuers may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Underwriters' Information, and shall
reimburse the Issuers promptly upon demand for any legal or other expenses
reasonably incurred by the Issuers in connection with investigating or defending
or preparing to defend against or appearing as a third
<PAGE>
-24-
party witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of such claim or the commencement of such action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that the indemnifying party was otherwise unaware of such claim or the
commencement of such action and it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; provided,
further, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 9. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based upon advice of counsel
to the indemnified party) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based upon advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified
<PAGE>
-25-
party or parties. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 9(a) and 9(b), shall use all reasonable efforts
to cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) The Underwriters severally confirm and the Issuers acknowledge
that the statements with respect to the public offering of the Notes by the
Underwriters set forth on the cover page of, and the information under the
caption "Underwriting" in, the Prospectus Supplement are correct and constitute
the only Underwriters' Information concerning such Underwriters furnished in
writing to the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
The obligations of the Issuers and the Underwriters in this Section 9
are in addition to any other liability that the Issuers or the Underwriters, as
the case may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section 9
------------
is unavailable or insufficient to hold harmless an indemnified party under
Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuers on the one hand and the
Underwriters on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Issuers on
the one hand and the Underwriters on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Issuers on the one hand and the Underwriters
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by or on
behalf of the Company, on the one hand, and the total discounts and commissions
received by the Underwriters with respect to the Securities purchased under this
Agreement, on the other, bear to the total gross proceeds from the sale of the
Securities under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things,
<PAGE>
-26-
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by any Issuer on the one hand or to any Underwriters' Information on
the other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Issuers and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 10, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
discounts and commissions received by such Underwriter with respect to the
Securities purchased by it under this Agreement exceeds the amount of any
damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10 are
several in proportion to their respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
----------------------------------------
inure to the benefit of and be binding upon each of the Underwriters and each of
the Issuers and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Issuers and
the Underwriters. Nothing in this Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Section 11, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
12. Expenses. Whether or not the transactions contemplated by this
--------
Agreement are consummated or this Agreement is terminated, the Issuers, jointly
and severally, agree with the Underwriters to pay (a) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
<PAGE>
-27-
post-effective amendments thereof (including, in each case, exhibits); (d) the
costs incident to the preparation, printing and distribution of the Preliminary
Prospectus, the Prospectus and any amendments or supplements thereto; (e) the
costs of reproducing and distributing each of the Transaction Documents; (f) the
costs incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (g) the filing fees incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of sale of the Securities; (h) the fees and expenses of the
Issuers' counsel and independent accountants; (i) the fees and expenses of
preparing, printing and distributing Blue Sky memoranda (including related fees
and expenses of counsel for the Underwriters); (j) any fees charged by rating
agencies for rating the Securities; (k) the fees and expenses of the Trustee and
any paying agent (including related fees and expenses of any counsel to such
parties); and (k) all other costs and expenses incident to the performance of
the obligations of the Issuers under this Agreement which are not otherwise
specifically provided for in this Section 12; provided, however, that except as
provided in this Section 12 and Section 8, the Underwriters shall pay their own
costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Securities they may sell and the expenses of advertising
any offering of the Securities made by the Underwriters.
13. Survival. The respective indemnities, rights of contribution,
--------
representations, warranties and agreements of the Issuers and the Underwriters
contained in this Agreement or made by or on behalf of the Issuers or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Securities and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any of them or
any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
14. Notices, etc. All statements, requests, notices and agreements
------------
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or
telecopy transmission to Chase Securities Inc., 270 Park Avenue, New York,
New York 10017, Attention: David Fass (telecopier no.: 212-270-0994); or
(b) if to the Issuers, shall be delivered or sent by mail or telecopy
transmission to the address of the Company set forth in the Final
Prospectus Supplement, Attention: David Sorce (telecopier no.: 716-218-
2165);
provided, however, that any notice to an Underwriter pursuant to Section 9(c)
shall also be delivered or sent by mail to such Underwriter at its address set
forth on the signature page
<PAGE>
-28-
hereof. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Issuers shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Underwriters by CSI.
15. Definition of Terms. For purposes of this Agreement, (a) the
-------------------
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading and (b) except where otherwise expressly provided, the term
"affiliate" has the meaning set forth in Rule 405 under the Securities Act.
16. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York without regard to
principals of conflicts of laws thereof.
17. Counterparts. This Agreement may be executed in two or more
------------
counterparts (which may include counterparts delivered by telecopier) and, if
executed in counterpart, the executed counterparts shall each be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
18. Amendments. No amendment or waiver of any provision of this
----------
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
19. Headings. The headings herein are inserted for convenience of
--------
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature Pages Follow]
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between each of the Issuers and the
several Underwriters in accordance with its terms.
Very truly yours,
CANANDAIGUA BRANDS, INC.
By:
-----------------------------
Name:
Title:
BATAVIA WINE CELLARS, INC.
By:
-----------------------------
Name:
Title:
BARTON INCORPORATED
By:
-----------------------------
Name:
Title:
BARTON BRANDS, LTD.
By:
-----------------------------
Name:
Title:
<PAGE>
BARTON BEERS, LTD.
By:
-----------------------------
Name:
Title:
BARTON BRANDS OF CALIFORNIA, INC.
By:
-----------------------------
Name:
Title:
BARTON BRANDS OF GEORGIA, INC.
By:
-----------------------------
Name:
Title:
BARTON DISTILLERS IMPORT CORP.
By:
-----------------------------
Name:
Title:
BARTON FINANCIAL CORPORATION
By:
-----------------------------
Name:
Title:
<PAGE>
STEVENS POINT BEVERAGE CO.
By:
-----------------------------
Name:
Title:
CANANDAIGUA LIMITED
By:
-----------------------------
Name:
Title:
MONARCH IMPORT COMPANY
By:
-----------------------------
Name:
Title:
CANANDAIGUA WINE COMPANY, INC.
By:
-----------------------------
Name:
Title:
THE VIKING DISTILLERY, INC.
By:
-----------------------------
Name:
Title:
<PAGE>
CANANDAIGUA EUROPE LIMITED
By:
-----------------------------
Name:
Title:
ROBERTS TRADING CORP.
By:
-----------------------------
Name:
Title:
POLYPHENOLICS, INC.
By:
-----------------------------
Name:
Title:
<PAGE>
Accepted:
CHASE SECURITIES INC.
By: /s/ Joe Purcell
-----------------------------
Name: Joe Purcell
Title: Vice President
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Eldad Coppens
-----------------------------
Name: Eldad Coppens
Title: Director
FLEET SECURITIES, INC.
By: /s/ Robert Hornstein
-----------------------------
Name: Robert Hornstein
Title: Vice President
SCHRODER & CO. INC.
By: /s/ Andrew van der Vord
-----------------------------
Name: Andrew van der Vord
Title: Managing Director
SCOTIA CAPITAL MARKETS (USA) INC.
By: /s/ Amil V. Schiaffino
-----------------------------
Name: Amil V. Schiaffino
Title: Director
<PAGE>
SCHEDULE I
----------
Principal Amount
Underwriters of Notes
------------ ----------------
Chase Securities Inc. $160,000,000
Credit Suisse First Boston Corporation 10,000,000
Fleet Securities, Inc. 10,000,000
Schroder & Co. Inc. 10,000,000
Scotia Capital Markets (USA) Inc. 10,000,000
-------------
Total $200,000,000
<PAGE>
ANNEX A
-------
[Form of Opinion of Special Securities Counsel for the Company]
McDermott, Will & Emery, special securities counsel to the Company,
shall have furnished to the Underwriters their written opinion, as counsel for
the Issuers, addressed to the Underwriters and dated on the Closing Date, in
form and substance reasonably satisfactory to the Underwriters, substantially to
the effect set forth below:
(i) The Company has been duly incorporated, is validly existing
and in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to execute, deliver and
perform all of its respective obligations under the Transaction
Documents.
(ii) No consent, approval, authorization, order, registration or
qualification of or with any governmental authority or agency or, to
our knowledge, any court or similar body is required under the laws of
the United States, the State of New York and the General Corporation
Law of the State of Delaware for the execution, delivery or
performance of the Transaction Documents by the Company or any
Guarantor, as the case may be, except such as may be required under
state securities or blue sky laws in connection with the purchase and
distribution of the securities by the Underwriters (as to which no
opinion is required).
(iii) The execution, delivery and performance of the Transaction
Documents by the Company or any Guarantor, as the case may be, and the
application of the net proceeds from the sale of the Securities in the
manner described in the Prospectus under the caption "Use of Proceeds"
do not and will not (A) conflict with the charter and by-laws of the
Company, (B) conflict with, constitute a breach of or a default by the
Company or any Guarantor, as the case may be, under, or result in the
creation or imposition of any lien, security interest or encumbrance
upon any of the assets of the Company or any Guarantor, as the case
may be, pursuant to the terms of the Credit Agreement or any other
indenture, mortgage, deed of trust, loan or credit agreement, bond,
debenture, note, lease or other agreement or instrument listed on
Annex 2 hereto, (C) contravene the General Corporation Law of the
State of Delaware or any statute, rule or regulation under the laws of
the United States and the State of New York applicable to the Company
or any of the Guarantors or any of their respective properties or (D)
to the
<PAGE>
-2-
knowledge of such counsel, conflict with or violate any judgment,
decree or order of any court or governmental agency or court or body
applicable to the Company or any of the Guarantors and their
respective properties.
(iv) The Transaction Documents have been duly authorized by the
Company. The Transaction Documents have been duly executed and
delivered by the Company and each of the Guarantors. The sale and the
issuance of the Notes and the Guarantees, and the execution and
delivery thereof, have been duly authorized by requisite corporate
action of the Company. The Notes have been duly executed by the
Company and the Guarantees have been duly executed by the Guarantors.
The Securities have been duly delivered to the Underwriters by the
Company and the Guarantors.
(v) The Indenture is a valid and binding agreement, enforceable
against the Company and each Guarantor in accordance with its terms,
except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally and general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
When the Notes and the Guarantees have been authenticated in
accordance with the terms of the Indenture, the Notes and the
Guarantees will be valid and binding obligations of the Company and
the Guarantors, respectively, entitled to the benefits of the
Indenture and enforceable against the Company and the Guarantors in
accordance with their terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and general principles of equity
(regardless of whether enforceability is considered in a proceeding at
law or in equity).
(vi) The Securities and the Indenture conform in all material
respects to the descriptions thereof under the caption "Description of
the Notes" in the Prospectus and "Description of Debt Securities" in
the Basic Prospectus. The statements made in the Prospectus under the
caption "Description of the Senior Credit Facilities," insofar as they
describe certain provisions of the Credit Agreement, are accurate in
all material respects.
(vii) Each of the Company's Current Reports on Form 8-K/A filed
on February 12, 1999 and on Form 8-K filed on February 22, 1999
incorporated by reference into the Prospectus, at the time it was
filed with the Commission, appeared on its face to be appropriately
responsive in all mate-
<PAGE>
-3-
rial respects to the requirements of the Exchange Act and rules
and regulations as promulgated by the Commission under the Exchange
Act, except that such counsel need not express any opinion as to the
financial statements, schedules, projections (and associated
assumptions and cautionary statements) and other financial data
included therein or incorporated by reference therein or excluded
therefrom or the exhibits thereto (except to the extent set forth in
the next sentence of this paragraph).
(viii) The Registration Statement was declared effective under the
Securities Act as of November 19, 1998, the Prospectus was filed with
the Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion on the date specified
therein and no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of such
counsel, no proceeding for that purpose is pending or threatened by
the Commission.
(ix) As of its date and as of the Closing Date, the Registration
Statement and the Prospectus and any further amendments or supplements
thereto made by the Company prior to the Closing Date (except for the
financial statements, the notes thereto and related schedules and
other financial data included therein, as to which such counsel need
express no opinion) comply as to form in all material respects with
the requirements of the Securities Act and the Rules and Regulations
(except that such counsel will not express any opinion as to the
financial statements, schedules and other financial data included
therein or incorporated by reference therein or excluded therefrom, or
exhibits thereto or assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the prospectus
except to the extent set forth in paragraph (vi) of this opinion).
(x) The Indenture conforms as to form in all material respects
with the requirements of the Trust Indenture Act and the Trust
Indenture Act Rules and Regulations.
(xi) Neither the Company nor any Subsidiary is required to
register under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an "investment company" as such term is defined in the
1940 Act.
(xii) Neither the issuance, sale or delivery of the Securities
nor the application of the proceeds thereof by the Company as set
forth in the Prospectus will violate Regulations T, U or X of the
Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors.
<PAGE>
-4-
In addition, such opinion shall state such counsel has participated in
conferences with officers and representatives of the Company and the
Subsidiaries, and representatives of the independent accountants of the Company
and the Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed. Although such counsel is not
required to pass upon or assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, and are not required to make an independent check
or verification thereof, except to the extent set forth in paragraph (vi) of the
opinion, such counsel is required to state that, based upon the foregoing, no
facts have come to their attention to lead them to believe that the Registration
Statement or the Prospectus (including the documents incorporated therein by
reference (except to the extent statements contained in such documents have been
modified or superseded by statements contained in the Prospectus)), as of its
date and as of the Closing Date, contained an untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. Such counsel need
express no opinion or belief as to the financial statements, schedules, and
other financial data included therein, or incorporated by reference into, or
excluded from the Registration Statement or the Prospectus.
<PAGE>
ANNEX B
-------
Form of Opinion of Special Counsel to the Company
Nixon, Hargrave, Devans & Doyle LLP, special counsel to the Company,
shall have furnished to the Underwriters its written opinion, addressed to the
Underwriters and dated on the Closing Date, in form and substance reasonably
satisfactory to the Underwriters, substantially to the effect set forth below:
(i) Each of the Subsidiaries of the Company listed on Annex 1
attached hereto (the "Guarantors") is a corporation duly incorporated,
in each case, validly existing and in good standing under the laws of
its respective jurisdiction of incorporation. The Company and each of
the Guarantors is duly qualified and in good standing as a foreign
corporation in each jurisdiction listed for it on Annex 2 attached
hereto. The Company and each Guarantor has all requisite corporate
power to own, lease and license its respective properties and conduct
its business as now being conducted and as described in the
Prospectus. All of the issued and outstanding capital stock of each
Guarantor has been duly authorized and validly issued and is fully
paid and non-assessable and were not issued in violation of any
preemptive or similar rights of stockholders arising under the
corporate law of the state of incorporation of such Guarantor, the
charter or bylaws of such Guarantor, or, to the best knowledge of such
counsel, any agreement to which such Guarantor is party, and, to the
best knowledge of such counsel, is owned by the Company, free and
clear of any lien, adverse claim, security interest, restriction on
transfer, shareholders' agreement, voting trust or other defect of
title whatsoever except for the liens under the Credit Agreement.
(ii) The Guarantors have the corporate power and authority to
execute, deliver and perform all of their respective obligations under
the Transaction Documents. The execution, delivery and performance of
the Transaction Documents by the Company or any Guarantor, does not
and will not (A) conflict with the charter or bylaws of any Guarantor,
(B) contravene the General Corporation Law of the State of Delaware or
any statute, rule or regulation under the laws of the State of New
York applicable to the Guarantors or any of their respective
properties, or (C) to the knowledge of such counsel, conflict with or
violate any judgment, decree or order of any court or governmental
agency or court or body applicable to any of the Guarantors or any of
their respective properties.
(iii) The Transaction Documents have been duly authorized,
executed and delivered by each Guarantor. The sale and issuance of the
Guar-
<PAGE>
-2-
antees and the execution and delivery thereof have been duly
authorized by requisite corporate action of the Guarantors.
(iv) To the best knowledge of such counsel after due inquiry,
except as described or referred to in the Registration Statement and
Prospectus: there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any of
the Guarantors is a party, or to which the property of the Company or
any of the Guarantors is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to the
Company or any of the Guarantors, will individually or in the
aggregate result in any material adverse change in the business,
financial position, net worth, results of operations or prospects, or
materially adversely affect the properties or assets, of the Company
and the Guarantors taken as a whole or will materially adversely
affect the consummation of the transactions contemplated by the
Prospectus; and all pending legal or governmental proceedings to which
the Company or any of the Subsidiaries is a party or that affect any
of their respective properties, that are not described in the
Registration Statement and Prospectus, including ordinary routine
litigation incidental to the business, considered in the aggregate,
will not result in a material adverse change in the business,
financial position, net worth, results of operations or prospects, or
materially adversely affect the properties or assets, of the Company
and the Guarantors taken as a whole.
(v) Each of the documents filed by the Company under the
Exchange Act and incorporated by reference into the Prospectus, other
than the Company's Current Report on Form 8-K/A filed on February 12,
1999 and the Company's Current Report on Form 8-K filed on February
22, 1999 (collectively, the "Documents"), at the time it was filed
with the Commission, appeared on its face to be appropriately
responsive in all material respects to the requirements of the
Exchange Act, and the rules and regulations as promulgated by the
Commission under the Exchange Act, except that such counsel need not
express any opinion as to the financial statements, schedules, and
other financial data included therein or incorporated by reference
therein, or excluded therefrom or the exhibits thereto (except to the
extent set forth in the next sentence of this paragraph) and such
counsel need not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Documents.
To such counsel's knowledge without having made any independent
investigation and based upon representations of officers of the
Company as to factual matters, there were no con-
<PAGE>
-3-
tracts or documents required to be filed as exhibits to such Documents
on the date they were filed which were not so filed.
Such counsel may limit its opinion to the laws of the United States
and the State of New York and the General Corporation Law of the State
of Delaware.
<PAGE>
ANNEX 1
-------
Guarantors
----------
Guarantor State of Incorporation
- --------- ----------------------
Batavia Wine Cellars, Inc. New York
Canandaigua Wine Company, Inc. New York
Barton Incorporated Delaware
Barton Brands, Ltd. Delaware
<PAGE>
ANNEX C
-------
Form of Opinion of Local Counsel to the Company
Clifford Chance, special United Kingdom counsel to the Issuers, and
Piper & Marbury, special Maryland counsel to the Issuers, shall have furnished
to the Underwriters their written opinions, each addressed to the Underwriters
and dated on the Closing Date, in form and substance reasonably satisfactory to
the Underwriters, substantially to the effect set forth below:
(i) [ ] (the "Company") has been duly organized
and is validly existing as a corporation and is in good standing under
the laws of its jurisdiction of incorporation.
(ii) The Company has the corporate power and authority to
execute, deliver and perform its obligations under the Underwriting
Agreement, the Indenture, the Supplemental Indenture and the
Guarantee. The Indenture, the Supplemental Indenture, the Underwriting
Agreement, and the Guarantee have been duly authorized for execution
and delivery by the Company. The sale and issuance by the Company of
its Guarantee and the execution and delivery thereof has been duly
authorized by requisite corporation action of the Company.
(iii) The execution, delivery, and performance by the Company of
the Underwriting Agreement, the Indenture, the Supplemental Indenture
and the Guarantee does not and will not (A) conflict with the charter
or By-Laws of the Company, (B) contravene any statute, rule or
regulation under the laws of its jurisdiction of incorporation
applicable to the Company and its properties, or (c) to counsel's
knowledge, conflict with or violate any judgment, decree or order of
any court or governmental agency or court or body applicable to the
Company and its properties (except that no opinion need be expressed
with respect to the securities or Blue Sky laws of its jurisdiction of
incorporation).
<PAGE>
EXHIBIT 99.1
================================================================================
CANANDAIGUA BRANDS, INC., as Issuer,
and its subsidiary guarantors
Batavia Wine Cellars, Inc.
Barton Incorporated
Barton Brands, Ltd.
Barton Beers, Ltd.
Barton Brands of California, Inc.
Barton Brands of Georgia, Inc.
Barton Distillers Import Corp.
Barton Financial Corporation
Stevens Point Beverage Co.
Monarch Import Company
Canandaigua Wine Company, Inc.
The Viking Distillery, Inc.
Canandaigua Europe Limited
Polyphenolics, Inc.
Canandaigua Limited
Roberts Trading Corp., as Guarantors
AND
HARRIS TRUST AND SAVINGS BANK, as Trustee
___________________
INDENTURE
Dated as of February 25, 1999
___________________
================================================================================
<PAGE>
CANANDAIGUA BRANDS, INC.
Reconciliation and Tie between Indenture
and
Trust Indenture Act of 1939
Trust Indenture Indenture
Act Section Section
- ---------------------------------------------------------------
310 (a)(1).............................. 11.5
(a)(2).............................. 11.5
(a)(3).............................. Not applicable
(a)(4).............................. Not applicable
(b)................................. 11.4, 11.5
311 (a)................................. 11.9(a), (c)
(b)................................. 11.9(b), (c)
312 (a)................................. 4.6(d), 11.1
(b)................................. 11.11
(c)................................. 11.11
313 (a)................................. 11.10(a)
(b)(i).............................. Not applicable
(b)(2).............................. 11.10(b)
(c)................................. 11.10(c)
(d)................................. 11.10(c)
314 (a)(1).............................. 4.6(a)
(a)(2).............................. 4.6(b)
(a)(3).............................. 4.6(c)
(b)................................. Not applicable
(c)................................. 3.8
(d)................................. Not applicable
(e)................................. 3.8
315 (a)................................. 11.1(a), (b)
(b)................................. 11.3
(c)................................. 11.1(a)
(d)................................. 11.1(a), 11.1(b), 13.3
(e)................................. 7.7
316 (a)(1)(A)........................... 7.6, 13.3
(a)(1)(B)........................... 7.1, 7.5, 13.3
(a)(2).............................. Not required
(b)................................. 7.7
317 (a)................................. 7.2
(b)................................. 4.8
318 (a)................................. 3.4
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
CANANDAIGUA BRANDS, INC.
INDENTURE
------------------
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS; TRUST INDENTURE ACT CONTROLLING
SECTION 1.1. Definitions............................................ 1
SECTION 1.2. Trust Indenture Act definitions controlling............ 7
ARTICLE II
FORM, ISSUE AND REGISTRATION OF DEBT SECURITIES
SECTION 2.1. Forms generally and dating............................. 8
SECTION 2.2. Amount unlimited; Issuable in series................... 8
SECTION 2.3. Denominations.......................................... 12
SECTION 2.4. Execution of Debt Securities; Authentication........... 12
SECTION 2.5. Issue of Debt Securities............................... 15
SECTION 2.6. Transfer of Debt Securities............................ 16
SECTION 2.7. Persons deemed owners of Debt Securities............... 16
SECTION 2.8. Provisions for Debt Securities in temporary form....... 16
SECTION 2.9. Mutilated, destroyed, lost or stolen Debt Securities... 17
SECTION 2.10. Exchanges of Debt Securities........................... 17
SECTION 2.11. Cancellation of surrendered Debt Securities............ 18
SECTION 2.12. Payment of interest; Defaulted interest................ 18
SECTION 2.13. Global Securities; Depositary.......................... 19
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Rights under Indenture limited to the parties and
holders of Debt Securities............................. 21
SECTION 3.2. Certificate of independent accountants conclusive...... 21
SECTION 3.3. Treatment of Debt Securities owned or held by
the Company in determining required percentages........ 21
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<PAGE>
SECTION 3.4. Remaining provisions not affected by invalidity of
any other provisions - required provisions of Trust
Indenture Act of 1939 to control....................... 21
SECTION 3.5. Company released from Indenture requirements if
entitled to have Indenture cancelled................... 22
SECTION 3.6. Date of execution...................................... 22
SECTION 3.7. Execution of documents furnished under the Indenture... 22
SECTION 3.8. Officers' Certificate and Opinions of Counsel to
be furnished to Trustee................................ 22
SECTION 3.9. Presentation of notices and demands.................... 23
SECTION 3.10. Successors and assigns bound by Indenture.............. 24
SECTION 3.11. Descriptive headings for convenience only.............. 24
SECTION 3.12. New York law to govern................................. 24
SECTION 3.13. Indenture may be executed in counterparts.............. 24
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.1. Payment of Principal and interest...................... 24
SECTION 4.2. Maintenance of office or agency........................ 25
SECTION 4.3. Corporate existence.................................... 25
SECTION 4.4. Restrictions on mergers, sales and consolidations...... 25
SECTION 4.5. Further assurances..................................... 25
SECTION 4.6. File certain reports and information with the
Trustee and the Securities and Exchange Commission -
transmit to holders of Debt Securities summaries
of certain documents filed with the Trustee -
furnish list of holders of Debt Securities
to the Trustee......................................... 26
SECTION 4.7. File statement by officers annually with the Trustee... 27
SECTION 4.8. Duties of Paying Agent................................. 27
ARTICLE V
REDEMPTION OF DEBT SECURITIES; SINKING FUND
SECTION 5.1. Applicability of Article............................... 28
SECTION 5.2. Notice of redemption to be given to Trustee -
deposit of cash (or other form of payment) with
Trustee - selection by Trustee of Debt Securities
to be redeemed......................................... 28
SECTION 5.3. Debt Securities called for redemption to become
due - rights of holders of redeemed Debt Securities -
return of funds on conversion.......................... 30
SECTION 5.4. Credits against sinking fund........................... 30
SECTION 5.5. Redemption through sinking fund........................ 31
-ii-
<PAGE>
SECTION 5.6. Debt Securities no longer Outstanding after notice
to Trustee and deposit of cash......................... 32
SECTION 5.7. Conversion arrangement on call for redemption.......... 32
ARTICLE VI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 6.1. Satisfaction and discharge of Indenture with respect
to Debt Securities of any series....................... 33
SECTION 6.2. Deposits for payment or redemption of Debt Securities
to be held in trust.................................... 34
SECTION 6.3. Repayment of moneys.................................... 35
ARTICLE VII
REMEDIES UPON DEFAULT
SECTION 7.1. Events of Default defined -- acceleration of
maturity upon default -- waiver of default after
acceleration........................................... 35
SECTION 7.2. Covenant of Company to pay to Trustee whole amount
due on default in payment of Principal or interest -
Trustee may recover judgment for whole amount due -
application of moneys received by the Trustee.......... 38
SECTION 7.3. Trustee may enforce rights of action without
possession of Debt Securities.......................... 40
SECTION 7.4. Delays or omissions not to impair any rights or
powers accruing upon default........................... 40
SECTION 7.5. In Event of Default Trustee may protect and enforce
its rights by appropriate proceedings - holders of
majority in aggregate Principal amount of Debt
Securities of a series may waive default............... 41
SECTION 7.6. Holders of majority in aggregate principal amount
of Debt Securities of any series may direct exercise
of remedies............................................ 41
SECTION 7.7. Limitation on suits by holders of Debt Securities...... 42
SECTION 7.8. No Debt Securities owned or held by, for the
account of or for the benefit of the Company to be
deemed Outstanding for purpose of payment or
distribution........................................... 43
SECTION 7.9. Company and Trustee restored to former position on
discontinuance or abandonment of proceedings........... 43
-iii-
<PAGE>
ARTICLE VIII
EVIDENCE OF ACTION BY HOLDERS OF DEBT SECURITIES
SECTION 8.1. Evidence of action by holders of Debt Securities....... 43
ARTICLE IX
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 9.1. Immunity of incorporators, stockholders, officers,
directors and employees................................ 44
ARTICLE X
MERGER, CONSOLIDATION, SALE OR LEASE
SECTION 10.1. Documents required to be filed with the Trustee
upon consolidation, merger, sale, transfer or lease -
execution of supplemental indentures - acts of
successor corporation.................................. 45
SECTION 10.2. Trustee may rely upon Opinion of Counsel............... 46
ARTICLE XI
CONCERNING THE TRUSTEE
SECTION 11.1. Acceptance of Trust - responsibilities of Trustee...... 46
SECTION 11.2. Trustee to be entitled to compensation - Trustee
not to be accountable for application of proceeds -
moneys held by Trustee to be trust funds............... 50
SECTION 11.3. Trustee to give holders of Debt Securities notice
of default............................................. 51
SECTION 11.4. Trustee acquiring conflicting interest must eliminate
it or resign........................................... 51
SECTION 11.5. Eligibility of Trustee................................. 51
SECTION 11.6. Resignation or removal of Trustee...................... 51
SECTION 11.7. Acceptance by successor Trustee........................ 53
SECTION 11.8. Successor to Trustee by merger or consolidation, etc... 54
SECTION 11.9. Limitations on right of Trustee as a creditor to
obtain payment of certain claims....................... 54
SECTION 11.10. Trustee to make annual report to holders of Debt
Securities -Trustee to make other reports to holders
of Debt Securities -holders of Debt Securities to
whom reports to be transmitted......................... 55
-iv-
<PAGE>
SECTION 11.11. Preservation of information by Trustee - Trustee to
give certain information to holders of Debt
Securities upon application............................ 56
SECTION 11.12. Trustee may hold Debt Securities and otherwise
deal with Company...................................... 57
SECTION 11.13. Trustee may comply with any rule, regulation or
order of the Securities and Exchange Commission........ 57
SECTION 11.14. Appointment of Authenticating Agent.................... 57
ARTICLE XII
SUPPLEMENTAL INDENTURES
SECTION 12.1. Company and Trustee may enter into supplemental
indenture for special purposes......................... 59
SECTION 12.2. Modification of Indenture with consent of holders
of Debt Securities..................................... 61
SECTION 12.3. Effect of supplemental indentures...................... 62
SECTION 12.4. Supplemental indentures to conform to Trust
Indenture Act.......................................... 62
SECTION 12.5. Notation on or exchange of Debt Securities............. 62
ARTICLE XIII
CONVERSION OF DEBT SECURITIES
SECTION 13.1. Applicability of Article............................... 63
SECTION 13.2. Right of holders of Debt Securities to convert
Debt Securities........................................ 63
SECTION 13.3. Issuance of shares of Capital Stock on conversion...... 64
SECTION 13.4. No payment or adjustment for interest or dividends..... 65
SECTION 13.5. Adjustment of conversion rate.......................... 65
SECTION 13.6. No fractional shares to be issued...................... 69
SECTION 13.7. Preservation of conversion rights upon consolidation,
merger, sale or conveyance............................. 69
SECTION 13.8. Notice to holders of Debt Securities of a series
prior to taking certain types of action................ 70
SECTION 13.9. Covenant to reserve shares for issuance on conversion
of Debt Securities..................................... 71
SECTION 13.10. Compliance with governmental requirements.............. 71
SECTION 13.11. Payment of taxes upon certificates for shares
issued upon conversion................................. 71
SECTION 13.12. Trustee's duties with respect to conversion
provisions............................................. 71
-v-
<PAGE>
ARTICLE XIV
GUARANTEES
SECTION 14.1. Guarantee.............................................. 72
SECTION 14.2. Obligations of the Guarantors Unconditional............ 73
SECTION 14.3. Execution of Guarantee................................. 74
SECTION 14.4. Withholding............................................ 74
SECTION 14.5. Limitation of Guarantee................................ 75
SECTION 14.6. Release of Guarantee................................... 75
-vi-
<PAGE>
INDENTURE dated as of the 25th day of February, 1996, among CANANDAIGUA
BRANDS, INC., a Delaware corporation (hereinafter called the "Company"), the
wholly-owned subsidiaries of the Company set forth on the signature page hereto
(such wholly-owned subsidiaries then-existing and, as applicable, any successor
who replaces such subsidiary pursuant to the applicable provisions of this
Indenture and, thereafter, such successor, all together the "Guarantors") and
HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation with its
principal offices in Chicago, Illinois, as Trustee hereunder (hereinafter called
the "Trustee");
WHEREAS, the Company for its lawful corporate purposes has duly authorized
the execution and delivery of this Indenture to provide for the issuance from
time to time of its debentures, notes or other evidences of indebtedness
(hereinafter called the "Debt Securities"), to be issued in one or more series
as herein provided; and
WHEREAS, each Guarantor has duly authorized the issuance of a guarantee of
the Debt Securities, of substantially the tenor set forth herein, and to provide
therefor each Guarantor has duly authorized the execution and delivery of this
Indenture and such Guarantee (as hereinafter defined).
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
THAT, in consideration of the premises and of the mutual covenants herein
contained and of the purchase and acceptance of the Debt Securities by the
holders thereof, and for other valuable consideration the receipt whereof is
hereby acknowledged, and intending to be legally bound hereby, it is hereby
agreed among the Company, the Guarantors and the Trustee, for the benefit of
those who shall hold the Debt Securities, as follows:
ARTICLE I
DEFINITIONS; TRUST INDENTURE ACT CONTROLLING
SECTION 1.1. Definitions. Unless otherwise specified or the context
otherwise requires, the terms defined in this Article I shall for all purposes
of this Indenture and of any indenture supplemental hereto have the meanings
herein specified, the following definitions to be equally applicable to both the
singular and plural forms of any of the terms herein defined. All accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles in the United States of
America, and 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.
Additional Amounts
The term "Additional Amounts" has the meaning specified in Section 14.4.
Affiliate
<PAGE>
An "Affiliate" shall mean any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor under this Indenture.
Authenticating Agent
The term "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 11.14 to act on behalf of the Trustee to authenticate Debt
Securities of one or more series.
Authorized Newspaper
The term "Authorized Newspaper" shall mean a newspaper in the English
language or in an official language of the country of publication, customarily
printed on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in the place in connection with which the
term is used or in the financial community of such place. If, because of
temporary suspension of publication or general circulation of any newspaper or
for any other reason, it is impossible or, in the opinion of the Trustee,
impracticable to make any publication of any notice required by this Indenture
in the manner herein provided, such publication or other notice in lieu thereof
which is made at the written direction of the Company by the Trustee shall
constitute a sufficient publication of such notice. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
place meeting the foregoing requirements and in each case on any Business Day.
Bankruptcy Law
The term "Bankruptcy Law" means Title 11 of the United States Code, as now
constituted or hereafter in effect, or any other applicable Federal or State
bankruptcy, insolvency or other similar law.
Board; Board of Directors
The term "Board" or "Board of Directors" shall mean the Board of Directors
of the Company or (i) the Executive Committee, if any, of such Board, (ii) any
other committee of such Board duly authorized to act hereunder, or (iii) any
officers of the Company duly authorized by such Board or by any duly authorized
committee of such Board to act hereunder.
Business Day
The term "Business Day" shall mean, with respect to any series of Debt
Securities, a day that, in the city (or in any of the cities, if more than one)
in which amounts are payable, as specified in the terms of such Debt Securities,
is not a day upon which banking institutions
-2-
<PAGE>
are authorized or required by law, or by executive order issued by a
governmental authority or agency regulating such banking institutions, to close.
Capital Stock
The term "Capital Stock" shall mean stock of any class of the Company.
Certified Resolution
The term "Certified Resolution" shall mean a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification.
Class A Common Stock
The term "Class A Common Stock" shall mean the Class A Common Stock, par
value $.01 per share, of the Company.
Closing Price
The term "Closing Price" on any day when used with respect to any class of
Capital Stock shall mean (i) if the stock is then listed or admitted to trading
on a national securities exchange in the United States, the last reported sale
price, regular way, for the stock as reported in the consolidated transaction or
other reporting system for securities listed or traded on such exchange, or (ii)
if the stock is listed on the National Association of Securities Dealers, Inc.
Automated Quotations System National Market System (the "Nasdaq National Market
System"), the last reported sale price, regular way, for the stock, as reported
on such list, or (iii) if the stock is not so admitted for trading on any
national securities exchange or the Nasdaq National Market System, the average
of the last reported closing bid and asked prices reported by the National
Association of Securities Dealers, Inc. Automated Quotations System as
furnished by any member in good standing of the National Association of
Securities Dealers, Inc., selected from time to time by the Company for that
purpose or as quoted by the National Quotation Bureau Incorporated. In the
event that no such quotation is available for any day, the Board of Directors
shall be entitled to determine the current market price on the basis of such
quotations as it considers appropriate.
Code
The term "the Code" means the Internal Revenue Code of 1986, as amended.
Company
The term "Company" shall mean Canandaigua Brands, Inc., a Delaware
corporation, and, subject to the provisions of Article X, shall include its
successors and assigns.
-3-
<PAGE>
Company Order
The term "Company Order" means a written order signed in the name of the
Company by its Chairman of the Board, President or any Vice President
(regardless of Vice Presidential designation), and by its Chief Financial
Officer, Treasurer, any Assistant Treasurer, Secretary or any Assistant
Secretary and delivered to the Trustee.
Debt Security
The term "Debt Security" shall mean one of the debentures, notes or other
evidences of indebtedness that are issued from time to time in one or more
series under this Indenture and, more particularly, any series of Debt
Securities authenticated and delivered under this Indenture.
holder of Debt Securities;
The term "holder of Debt Securities" or other similar term shall mean any
person who shall at the time be the registered holder of any Debt Security or
Debt Securities as shown by the register or registers kept by the Company or its
agent for that purpose in accordance with the terms of this Indenture.
Depositary
The term "Depositary" has the meaning specified in Section 2.13.
Event of Default
The term "Event of Default" shall mean an event listed in Section 7.1,
continued for the period of time, if any, and after the required notices, if
any, therein designated.
Global Security
The term "Global Security" has the meaning specified in Section 2.13.
Guaranteed Obligations
The term "Guaranteed Obligations" has the meaning specified in Section
14.1.
Guaranteed Parties
The term "Guaranteed Parties" shall mean all Persons who are now or who
hereafter become holders of Debt Securities and the Trustee.
Guarantees
-4-
<PAGE>
The term "Guarantees" means the guarantee of each of the Guarantors as set
forth in Article XIV hereof, in one or more supplemental indentures hereto, and
any additional guarantee of the Debt Securities executed pursuant to the terms
thereof.
Guarantors
The term "Guarantors" shall have the meaning set forth in the Recitals
hereto.
Indenture
The term "Indenture" shall mean this instrument as originally executed or,
if amended or supplemented as herein provided, as so amended or supplemented
and, unless the context otherwise indicates, shall include the form and terms of
each particular series of Debt Securities established as contemplated hereunder.
Officers' Certificate
The term "Officers' Certificate" shall mean a certificate signed by the
Chairman of the Board, President or any Vice President (regardless of Vice
Presidential designation), and by its Chief Financial Officer, Treasurer, any
Assistant Treasurer, Secretary or any Assistant Secretary of the Company, in
their capacities as such officers of the Company and delivered to the Trustee.
Each such certificate shall include the statements provided for in Section 3.8,
if and to the extent required by the provisions thereof.
Opinion of Counsel
The term "Opinion of Counsel" shall mean an opinion in writing signed by
legal counsel (who may be an employee of the Company) acceptable in form and
substance to the Trustee and delivered to the Trustee. Such opinion shall
include the statements provided for in Section 3.8, if and to the extent
required by the provisions thereof.
Original Issue Discount
The term "Original Issue Discount" with respect to any debt security,
including an Original Issue Discount Security, has the same meaning as set forth
in Section 1273 of the Code, or any successor provision, and the applicable
Treasury Regulations thereunder.
Original Issue Discount Security
The term "Original Issue Discount Security" means any series of a Debt
Security, including a series of a Debt Security that does not provide for the
payment of interest prior to maturity, which is issued at a price lower than the
principal amount thereof and which provides that upon redemption or acceleration
of the stated maturity thereof an amount less than the principal amount thereof
to be due and payable pursuant to Section 7.1.
-5-
<PAGE>
Outstanding
The term "Outstanding," when used with respect to the Debt Securities,
shall, subject to Section 3.3, mean, as of the date of determination, all Debt
Securities theretofore authenticated and delivered under this Indenture, except:
(a) Debt Securities for the payment or redemption of which cash (or other form
of payment if permitted by the terms of such Debt Securities) in the necessary
amount shall have been deposited in trust with the Trustee or any paying agent
(other than the Company) provided that, if such Debt Securities are to be
redeemed prior to the maturity thereof, notice of such redemption shall have
been duly given or provision satisfactory to the Trustee shall have been made
for giving such notice; (b) Debt Securities converted into Capital Stock in
accordance with Article XIII hereof, if the terms of such Debt Securities
provide for convertibility pursuant to Section 2.2; (c) Debt Securities paid or
in lieu of or in substitution for which other Debt Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.9, unless proof
satisfactory to the Trustee is presented that any such Debt Securities are held
by persons in whose hands such Debt Securities are valid, binding and legal
obligations; and (d) Debt Securities which have been cancelled by the Trustee or
delivered to the Trustee or its designee for cancellation.
Paying Agent
The term "Paying Agent" shall mean any person authorized by the Company to
pay the principal of, premium, if any, and interest on any Debt Securities.
Person
The term "Person" shall mean an individual, a corporation, a limited
liability company, a partnership, an association, a joint-stock company, a
trust, any unincorporated organization, or a government or political subdivision
thereof.
Preferred Stock
The term "Preferred Stock" shall mean the Preferred Stock, par value $.01
per share, of the Company.
Principal
The term "principal" of a debt security, including any series of Debt
Securities, on any day and for any purpose means the amount (including, without
limitation, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect to
such debt security as of such date and for such purpose (in cluding, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Company upon any purchase or exchange at the option of the Company
or the holder of such debt security and upon any acceleration of the maturity of
such debt security).
-6-
<PAGE>
Principal amount
The term "principal amount" of a debt security, including any series of
Debt Securities, means the principal amount as set forth on the face of such
debt security.
Responsible Officer
The term "Responsible Officer", when used with respect to the Trustee,
shall mean any officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
Securities Exchange Act
The term "Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
Significant Subsidiary
The term "Significant Subsidiary" shall mean any subsidiary (i) whose
revenues exceed 10% of the total revenues of the Company, in each case for the
most recent fiscal year, or (ii) whose net worth exceeds 10% of the total
stockholders' equity of the Company, in each case as of the end of the most
recent fiscal years.
Trustee; corporate principal office
The term "Trustee" shall mean the trustee or trustees hereunder for the
time being, whether original or successor. "Trustee" as used with respect to
the Debt Securities of any series shall mean the Trustee with respect to Debt
Securities of such series. The term "principal office" of the Trustee shall
mean the principal office of the Trustee at which, at any particular time, the
corporate trust business of the Trustee shall be administered, which office as
of the date hereof is at 311 West Monroe Street, 12th Floor, Chicago, Illinois
60606.
U.S. Government Obligations
The term "U.S. Government Obligations" means direct obligations of, or
obligations entitled to the full faith and credit of, the United States of
America.
SECTION 1.2. Trust Indenture Act definitions controlling. All terms used
in this Indenture which are defined in the Trust Indenture Act of 1939, as
amended, or which are by reference therein defined in the Securities Act of 1933
(except as herein otherwise expressly provided or unless the context otherwise
requires) shall have the meanings assigned to such terms in such Trust Indenture
Act and such Securities Act as they were respectively in force at the date of
this Indenture, except as otherwise provided in Section 12.3.
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ARTICLE II
FORM, ISSUE AND REGISTRATION OF DEBT SECURITIES
SECTION 2.1. Forms generally and dating. The Debt Securities of each
series shall be in the form or forms (including temporary or permanent global
form) established from time to time by or pursuant to a resolution of the Board
of Directors or in one or more indentures supplemental hereto, which shall set
forth the information required by Section 2.2. The Debt Securities and the
Trustee's certificate of authentication shall have such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture or by a resolution of the Board of Directors and may have such
notations, legends or endorsements as the Company may deem appropriate and as
are not inconsistent with the provisions of this Indenture or as may be required
by law, stock exchange rule or usage. The Company shall approve and provide the
form of the Debt Securities and the form of any Guarantee thereto and any
notation, legend or endorsement thereon. If the form of Debt Securities of any
series is established by action taken pursuant to a resolution of the Board of
Directors, a copy of an appropriate record of such action shall be certified by
the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section
2.5 for the authentication and delivery of such Debt Securities.
Each Debt Security shall be dated the date of its authentication. The form
of the Trustee's certificate of authentication to be borne by the Debt
Securities shall be substantially as follows:
[FORM OF TRUSTEE'S CERTIFICATE]
This is one of the Debt Securities of the series referred to on the reverse
hereof.
___________________________________,
as Trustee
By:________________________________
Authorized Officer
SECTION 2.2. Amount unlimited; Issuable in series.
The aggregate principal amount of the Debt Securities which may be
authenticated and delivered under this indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall be
established in or pursuant to one or more resolutions of the Board of Directors,
or established in or pursuant
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to one or more indentures supplemental hereto, prior to the issuance of the Debt
Securities of any series:
(1) the title and designation of the Debt Securities of the series
(which shall distinguish Debt Securities of the series from all other Debt
Securities) including whether such Debt Securities shall be issued as
senior Debt Securities, senior subordinated Debt Securities or subordinated
Debt Securities, any subordination provisions particular to such series of
Debt Securities, and whether such Debt Securities are convertible and/or
exchangeable;
(2) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under
this Indenture (except for the Debt Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other
Debt Securities of the series pursuant to Section 2.6, 2.8, 2.9, 2.10,
2.11, 5.2 or 12.5) and except for any Debt Securities which pursuant to
Section 2.4 are deemed not to have been authenticated and delivered
hereunder;
(3) the date or dates (and whether fixed or extendable) on which the
principal of the Debt Securities of the series is payable or the method of
determination thereof;
(4) the rate or rates (which may be fixed, floating or adjustable) at
which the Debt Securities of the series shall bear interest, if any, the
method of calculating such rates, the date or dates from which such
interest shall accrue or the manner of determining such dates, the interest
payment dates on which such in terest shall be payable and the record dates
for the determination of holders of Debt Securities to whom interest is
payable;
(5) the place or places where the principal of and premium, if any,
and interest on the Debt Securities, if any, of the series shall be
payable;
(6) any provisions relating to the issuance of the Debt Securities of
such series at an original issue discount;
(7) the price or prices at which, the period or periods within which
and the terms and conditions upon which the Debt Securities of the series
may be redeemed, in whole or in part, at the option of the Company,
pursuant to any sinking fund or otherwise (including, without limitation,
the form or method of payment thereof if other than in cash);
(8) the obligation, if any, of the Company to redeem, purchase or
repay the Debt Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of a
holder of Debt Securities thereof and the price or prices at which and the
period or periods within which
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and the terms and conditions upon which the Debt Securities of the series
shall be redeemed, purchased or repaid, in whole or in part, pursuant to
such obligation (including, without limitation, the form or method of
payment thereof if other than in cash), and any provisions for the
remarketing of such Debt Securities;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the Debt Securities of the series shall
be issuable;
(10) if other than the principal amount thereof, the portion of the
principal amount of the Debt Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof pursuant
to Section 7.1 or provable in bankruptcy pursuant to Section 7.2, or, if
applicable, which is convertible in accordance with Article XIII.
(11) any Events of Default with respect to the Debt Securities of a
particular series, in lieu of or in addition to those set forth herein and
the remedies therefor;
(12) the obligations, if any, of the Company to permit the conversion
of the Debt Securities of such series into Preferred Stock or Class A
Common Stock, or combination thereof, and the terms and conditions upon
which such conversion shall be effected (including, without limitation, the
initial conversion price or rate, the conversion period and any other
provision in addition to or in lieu of those set forth in this Indenture
relative to such obligation);
(13) any trustees, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Debt Securities of such
series;
(14) the currency or currencies, including composite currencies, in
which the Debt Securities of the series shall be denominated if other than
the currency of the United States of America, and, if so, whether the Debt
Securities of the series may be satisfied and discharged other than as
provided in Article VI;
(15) if other than the coin or currency in which the Debt Securities of
that series are denominated, the coin or currency in which payment of the
principal of, premium, if any, or interest on the Debt Securities of such
series shall be payable (and the manner in which the equivalent of the
principal amount thereof in the currency of the United States is to be
determined for any purpose, including for the determination of the
principal amount outstanding);
(16) if the principal of, premium, if any, or interest on the Debt
Securities of such series are to be payable, at the election of the Company
or a
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holder of Debt Securities thereof, in a coin or currency other than that in
which the Debt Securities are denominated, the period or periods within
which, and the terms and conditions upon which, such election may be made;
(17) if the amount of payments of principal of, premium, if any, and
interest on the Debt Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(18) whether and under what circumstances the Company will pay
additional amounts on the Debt Securities of the series held by a person
who is not a United States of America person in respect of any tax,
assessment or governmental charge withheld or deducted and, if so, whether
the Company will have the option to redeem such Debt Securities rather than
pay such additional amounts;
(19) if receipt of certain certificates or other documents or
satisfaction of other conditions will be necessary for any purpose,
including, without limitation, as a condition to the issuance of the Debt
Securities of such series in definitive form (whether upon original issue
or upon exchange of a temporary Debt Security of such series), the form and
terms of such certificates, documents or conditions;
(20) any other affirmative or negative covenants with respect to the
Debt Securities of such series;
(21) whether the Debt Securities of such series shall be issued in
whole or in part in the form of one or more Global Securities and in such
case, (i) the Depositary for such Global Security or Debt Securities, which
Depositary must be a clearing agency registered under the Securities
Exchange Act, (ii) the circumstances under which any such Global Security
may be exchanged for Debt Securities registered in the name of, and under
which any transfer of such Global Security may be registered in the name
of, any Person other than such Depositary or its nominee, if other than as
set forth in Section 2.13 and (iii) any other provisions regarding such
Global Securities which provisions may be in addition to or in lieu of, in
whole or in part, the provisions of Section 2.13;
(22) whether the Debt Securities are defeasible;
(23) whether the Debt Securities of such series shall be guaranteed in
whole or in part by the Guarantors, jointly and severally with all other
Guarantors in such case, and (i) the extent that the Debt Securities of the
series shall be guaranteed by the Guarantors; (ii) the ranking of such
Guarantee; (iii) the terms of subordination of such Guarantee; and (iv) the
form of any such Guarantee; and
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(24) any other terms of a particular series and any other provisions
expressing or referring to the terms and conditions upon which the Debt
Securities of such series are to be issued under the Indenture, which terms
and provisions are not in conflict with the provisions of this Indenture;
provided, however, that the addition to or subtraction from or variation of
Articles IV, V, VI, VII, and X (and Section 1.1, insofar as it relates to
the definition of certain terms as used in such Articles) with regard to
the Debt Securities of a particular series shall not be deemed to
constitute a conflict with the provisions of those Articles.
All Debt Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such resolution of the Board of Directors or in any such indenture
supplemental hereto. Not all Debt Securities of any one series need be issued
at the same time, and, unless otherwise so provided, a series may be reopened
for issuances of additional Debt Securities of such series.
If any of the terms of the Debt Securities of a series are established by
action taken pursuant to a resolution of the Board of Directors, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee with an
Officers' Certificate setting forth the terms of the Debt Securities of such
series. With respect to Debt Securities of a series which are not to be issued
at one time, such resolution of the Board of Directors or action may provide
general terms or parameters for Debt Securities of such series and provide
either that the specific terms of particular Debt Securities of such series
shall be specified in a Company Order or that such terms shall be determined by
the Company or its agents in accordance with a Company Order as contemplated by
the proviso clause of Section 2.5.
SECTION 2.3. Denominations. The Debt Securities of each series shall be
registered Debt Securities without coupons, in such denominations as shall be
specified as contemplated by Section 2.2. In the absence of any such provisions
with respect to the Debt Securities of any series, the Debt Securities of such
series shall be issuable in denominations of $1,000 or of any integral multiple
of $1,000.
SECTION 2.4. Execution of Debt Securities; Authentication. The Debt
Securities shall be executed on behalf of the Company by its President, its
Treasurer or one of its Executive Vice Presidents or Vice Presidents, whose
signatures may be manual or facsimile, and its corporate seal shall be thereunto
affixed (or a facsimile thereof shall be engraved, printed, or otherwise
reproduced thereon) and attested by the manual or facsimile signature of its
Secretary or one of its Assistant Secretaries. The Guarantees shall be executed
on behalf of each Guarantor by such Guarantor's President, its Treasurer, one of
its Vice Presidents (regardless of Vice Presidential designation), or one of its
other officers (or an officer of the Company) duly authorized by its board of
directors to execute the Guarantee on behalf of such Guarantor, whose signatures
may be manual or facsimile, and its corporate seal shall be thereunto affixed
(or a facsimile thereof shall be engraved, printed, or otherwise reproduced
thereon) and attested by the manual or facsimile signature of its Secretary or
one of its
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Assistant Secretaries. In case any officer of the Company who shall have signed
any of the Debt Securities shall cease to be such officer before the Debt
Securities so signed and attested shall actually have been authenticated and
delivered by the Trustee or the Authenticating Agent or disposed of by the
Company, such Debt Securities nevertheless may be authenticated, issued and
delivered or disposed of with the same force and effect as though the person or
persons who signed or attested such Debt Securities had not ceased to be such
officer of the Company; and any such Debt Security may be signed and attested on
behalf of the Company by such persons, as at the actual date of the execution of
such Debt Security, shall be the proper officers of the Company, although at the
date of such Debt Security or the date of execution of this Indenture any such
person was not such officer.
No Debt Security of any series shall be entitled to the benefits hereof or
shall be or become valid or obligatory for any purpose unless there shall appear
on the Debt Security a certificate of authentication, substantially in the form
hereinbefore recited, manually executed by the Trustee for such series or an
Authenticating Agent; and such certificate on any series of Debt Securities
issued by the Company shall be conclusive evidence that it has been duly
authenticated and delivered hereunder.
Notwithstanding the foregoing, if any series of Debt Securities shall have
been duly authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Debt Security to the Trustee or its
designee for cancellation as provided in Section 2.11 together with a written
statement (which need not be accompanied by an Opinion of Counsel) stating that
such Debt Security has not been issued and sold by the Company, for all purposes
of this Indenture such Debt Security shall be deemed not to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of this Indenture.
If the form or forms or terms of the Debt Securities of any series have
been established in or pursuant to one or more resolutions of the Board of
Directors or indentures supplemental hereto as permitted by Sections 2.1 and
2.2, in authenticating such Debt Securities, and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the
Trustee and the Authenticating Agent shall be entitled to receive, and (subject
to Section 11.2) shall be fully protected in relying upon, a copy of such
resolution or resolutions delivered to the Trustee and the Authenticating Agent
and certified by the Secretary or Assistant Secretary of the Company or the
Guarantors to have been duly adopted by the Board of Directors of the Company or
the boards of directors of the Guarantors, as applicable, and to be in full
force and effect on the date of such certification, and an Opinion of Counsel
stating:
(1) if the form or forms of such Debt Securities and Guarantees have
been established by or pursuant to a resolution of the Board of Directors
or indenture supplemental hereto, that such form or forms have been
established in conformity with the provisions of this Indenture;
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(2) if the terms of such Debt Securities and Guarantees have been
established by or pursuant to a resolution of the Board of Directors or
indenture supplemental hereto, that such terms have been established in
conformity with the provisions of this Indenture;
(3) that such Debt Securities and Guarantees, when authenticated and
delivered by the Trustee or an Authenticating Agent and issued by the
Company and the Guarantors in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company and the Guarantors, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization and other laws of general applicability relating
to or affecting the enforcement of creditors' rights and to general equity
principles (or such other similar matters as in the opinion of such counsel
shall not materially adversely affect such enforceability); and
(4) that the issuance and authentication of such Debt Securities and
Guarantees to be issued will not conflict with, result in a breach or
constitute a default or with the giving of notice or the passage of time or
both, would not constitute a default, under the articles of incorporation
or bylaws of the Company or the Guarantors or result in such a default or
violation;
provided, however, that, with respect to Debt Securities of a series which are
not to be issued at one time, the Trustee and the Authenticating Agent shall be
entitled to receive such Opinion of Counsel only once at or prior to the time of
the first authentication of Debt Securities of such series and that the opinions
described in clauses (2) and (3) above may state, respectively,
(a) that, when the terms of such Debt Securities and Guarantees shall
have been established pursuant to a Company Order or pursuant to such
procedures as may be specified from time to time by a Company Order, all as
contemplated by and in accordance with a resolution of the Board of
Directors or an Officers' Certificate pursuant to a resolution of the Board
of Directors or indenture supplemental hereto, as the case may be, such
terms will have been established in conformity with the provisions of this
Indenture; and
(b) that such Debt Securities and Guarantees, when (i) executed by the
Company or the Guarantors, as the case may be, (ii) completed,
authenticated and delivered by the Trustee or Authenticating Agent in
accordance with this Indenture, (iii) issued and delivered by the Company
or the Guarantors, as the case may be, and (iv) paid for, all as
contemplated by and in accordance with the aforesaid Company Order or
specified procedures, as the case may be, will constitute valid and legally
binding obligations of the Company or Guarantor, as the case may be,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance, reorganization and other laws
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or general applicability relating to or affecting the enforcement of
creditors' rights and to general equitable principles (or such other
similar matters as in the opinion of such counsel shall not materially
adversely affect such enforceability).
Notwithstanding the provisions of Sections 2.1, 2.2, 3.8 and this Section,
if all the Debt Securities of a series are not to be originally issued at one
time, the resolution of the Board of Directors or indenture supplemental hereto,
the certified copy of the record of action taken pursuant to such resolution or
supplemental indenture, the Officers' Certificate, the Company Order and any
other documents otherwise required pursuant to such Sections need not be
delivered at or prior to the time of authentication of each Debt Security of
such series if such documents are delivered at or prior to the authentication
upon original issuance of the first Debt Security of such series to be issued;
provided, however, that any subsequent request by the Company to the Trustee or
the Authenticating Agent to authenticate Debt Securities of such series shall
constitute a representation and warranty by the Company that, as of the date of
such request, the statements made in the Officers' Certificate delivered
pursuant to Section 3.8 at or prior to authentication of the first such Debt
Security shall be true and correct on the date thereof as if made on and as of
the date thereof.
The Trustee or the Authenticating Agent shall not be required to
authenticate such Debt Securities if the issue of such Debt Securities pursuant
to this Indenture will adversely affect the Trustee's or the Authenticating
Agent's own rights, duties or immunities under the Debt Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee or the Authenticating Agent.
With respect to Debt Securities of a series which are not all issued at one
time, the Trustee and the Authenticating Agent may conclusively rely, as to the
authorization by the Company of any such Debt Securities or the Guarantors of
any such Guarantees, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel,
Officers' Certificate and other documents delivered pursuant to Sections 2.1,
2.2, 3.8 and this Section, as applicable, at or prior to the time of the first
authentication of Debt Securities of such series and Guarantees unless and until
such opinion, certificate or other documents have been superseded or revoked in
a writing delivered to the Trustee. In connection with the authentication and
delivery of Debt Securities of a series which are not all issued at one time,
the Trustee and the Authenticating Agent shall be entitled to assume that the
Company's instructions to authenticate and deliver such Debt Securities do not
violate any rules, regulations or orders of any governmental agency or
commission having jurisdiction over the Company.
SECTION 2.5. Issue of Debt Securities. The Trustee and the Authenticating
Agent, forthwith upon the execution and delivery of this Indenture and from time
to time thereafter, upon the execution and delivery to it of Debt Securities of
any series by the Company and the Guarantees by the Guarantors as herein
provided, and without any further action on the part of the Company and the
Guarantors, shall authenticate such Debt Securities up to a maximum amount, if
any, designated for such series pursuant to Section 2.2 and deliver them to or
upon
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the receipt of a Company Order; provided, however, that if not all the Debt
Securities of a series are to be issued at one time and if the resolution of the
Board of Directors or indenture supplemental hereto establishing such series as
contemplated by Sections 2.1 and 2.2 shall so permit, such Company Order may set
forth procedures acceptable to the Trustee for the issuance of such Debt
Securities and for determining the form or forms or terms of particular Debt
Securities of such series including, but not limited to, interest rate, if any,
maturity date, date of issuance and date from which interest, if any, shall
accrue.
SECTION 2.6. Transfer of Debt Securities. The transfer of any series of
Debt Securities may be registered by the registered owner thereof, in person or
by his attorney duly authorized in writing, at the office or agency of the
Company to be maintained by it as provided in Section 4.2, by delivering such
Debt Security for cancellation, accompanied by delivery of a duly executed
instrument of transfer, in form approved by the Company and satisfactory to the
Trustee or its designee, and thereupon the Company shall execute in the name of
the transferee or transferees, and the Trustee or the Authenticating Agent shall
authenticate and deliver, a new Debt Security or Debt Securities of the same
series and of like form for the same aggregate principal amount.
SECTION 2.7. Persons deemed owners of Debt Securities. Prior to due
presentation of any series of Debt Securities for registration of transfer, the
person in whose name a Debt Security of any series shall be registered, on books
kept for such purpose in accordance with Section 4.2, shall be deemed the
absolute owner thereof for all purposes of this Indenture, whether or not such
Debt Security is overdue, and neither the Company, the Trustee nor any Paying
Agent or conversion agent nor any series of Debt Securities registrar shall be
affected by notice to the contrary. Subject to the provisions of Section 2.12,
payment of or on account of the principal, premium, if any, and interest shall
be made only to or upon the order in writing of such regis tered owner thereof,
but such registration may be changed as above provided. All such payments shall
be valid and effectual to satisfy and discharge the liability upon such Debt
Security to the extent of the sum or sums so paid.
SECTION 2.8. Provisions for Debt Securities in temporary form. Until Debt
Securities of any series in definitive form are ready for delivery, the Company
and the Guarantors may execute and, upon its request in writing, the Trustee or
the Authenticating Agent shall authenticate and deliver, in lieu thereof and
subject to the same conditions, one or more printed or lithographed Debt
Securities in temporary form, substantially of the tenor of Debt Securities of
the same series, without a recital of specific redemption prices and with such
other appropriate omissions, variations and insertions, all as may be determined
by the Board of Directors. Until exchanged for Debt Securities of the same
series in definitive form such Debt Securities in tempo rary form shall be
entitled to the benefits of this Indenture. The Company and the Guarantors
shall, without unreasonable delay after the issue of Debt Securities in
temporary form, prepare, execute and deliver definitive Debt Securities of the
same series to the Trustee, and upon the presentation and surrender of Debt
Securities in temporary form, the Trustee or the Authenticating Agent shall
authenticate and deliver, in exchange therefor, Debt Securities of the same
series in definitive form for the same
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aggregate principal amount as the Debt Securities in temporary form surrendered.
Such exchange shall be made by the Company at its own expense and without any
charge therefor.
SECTION 2.9. Mutilated, destroyed, lost or stolen Debt Securities. Upon
receipt by the Company, the Guarantors, the Trustee and the Authenticating Agent
of evidence satisfactory to them that any Debt Security of any series has been
mutilated, destroyed, lost or stolen, and upon receipt of indemnity (and in case
of a destroyed, lost or stolen Debt Security, proof of ownership) satisfactory
to them, the Company and the Guarantors shall, in the case of a mutilated Debt
Security, and may in the case of a lost, stolen or destroyed Debt Security,
execute, and thereupon the Trustee or the Authenticating Agent shall
authenticate and deliver, a new Debt Security of the same series of like tenor
bearing a serial number not contemporaneously outstanding (bearing such
notation, if any, as may be required by the rules of any stock exchange upon
which the Debt Securities of the same series are listed or are to be listed), in
exchange and substitution for, and upon surrender and cancellation of, the
mutilated Debt Security, or in lieu of and in substitution for the Debt Security
so destroyed, lost or stolen; or, if any mutilated, destroyed, lost or stolen
Debt Security of any series shall have matured or be about to mature, instead of
issuing a new Debt Security, the Company, upon written notice to the Trustee or
the Authenticating Agent, may pay the same without surrender of the destroyed,
lost or stolen Debt Security. The Company may require payment of the expenses
which may be incurred by the Company or any agent thereof and the charges and
expenses of the Trustee and the Authenticating Agent in the premises. Any
series of Debt Securities issued under the provisions, of this Section 2.9 in
lieu of any series of Debt Securities alleged to have been destroyed, lost or
stolen, shall constitute an additional contractual obligation of the Company and
the Guarantors, whether or not the Debt Security alleged to have been destroyed,
lost or stolen shall be found at any time, and shall be equally and
proportionately entitled to the benefits of this Indenture with all other Debt
Securities of the same series issued under this Indenture.
All Debt Securities shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities, and shall
preclude, to the extent lawful, any and all other rights or remedies,
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 2.10. Exchanges of Debt Securities. Debt Securities of any series
may, upon surrender thereof as hereinafter provided in this Section 2.10, be
exchanged for one or more Debt Securities of the same series of the same
aggregate principal amount, in authorized denominations. The Debt Securities to
be exchanged shall be surrendered at the office or agency of the Company to be
maintained by it as provided in Section 4.2, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, the Trustee and the
registrar, and the Company and the Guarantors shall execute and the Trustee or
the Authenticating Agent shall authenticate and deliver, in exchange therefor,
the Debt Security or Debt Securities of the same series, bearing numbers not
contemporaneously outstanding, which the holder of Debt Securities making the
exchange shall be entitled to receive. Every
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exchange of Debt Securities of any series shall be effected in such manner as
may be prescribed by the Company with the approval of the Trustee and registrar,
and as may be necessary to comply with the regulations of any stock ex change
upon which Debt Securities of such series are listed or are to be listed or to
conform to usage in respect thereof.
Upon every exchange or registration of transfer of Debt Securities, no
service charge shall be made but the Company may require the payment of any
taxes or other governmental charges required to be paid with respect to such
exchange or registration, as a condition precedent to the exercise of the
privilege of such exchange or registration.
All Debt Securities executed, authenticated and delivered in exchange or
upon registration of transfer shall be the valid obligations of the Company and
the Guarantors, evidencing the same debt as the Debt Securities surrendered, and
shall be entitled to the benefits of this Indenture to the same extent as the
Debt Securities in exchange for which they were authenticated and delivered.
The Company shall not be required to make exchanges or registrations of
transfer under any provision of this Article II of: (a) the Debt Securities of
any series for the period of 15 days next preceding the date of any designation
of Debt Securities of such series to be redeemed, as provided in Article V, or
(b) any series of Debt Securities or portion thereof called or to be called for
redemption.
SECTION 2.11. Cancellation of surrendered Debt Securities. All Debt
Securities of any series surrendered for the purpose of payment, exchange,
conversion or cancellation (including Debt Securities authenticated which the
Company has not issued and sold) shall, if surrendered to the Company or any
Paying Agent or conversion agent, be delivered to the Trustee or its designee
and cancelled by it, or, if surrendered to the Trustee or its designee, shall be
cancelled by it, and no Debt Securities shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Indenture or as
otherwise provided in the resolution of the Board of Directors or indenture
supplemental hereto establishing such series as contemplated by Section 2.2.
All Debt Securities of any series surrendered for the purpose of redemption or
credit against any sinking fund shall similarly be delivered to the Trustee or
its designee for cancellation, and no Debt Securities shall be issued in lieu
thereof except Debt Securities of the same series in the case of redemption of a
Debt Security in part only. If the Company shall acquire any of the Debt
Securities, such acquisition shall not operate as a redemption or satisfaction
of the indebtedness represented by such Debt Securities unless and until the
same are delivered to the Trustee or its designee for cancellation. Unless
otherwise directed in writing by the Company, the Trustee or its designee shall
destroy all cancelled Debt Securities and furnish to the Company a certificate
evidencing such destruction.
SECTION 2.12. Payment of interest; Defaulted interest. Except as provided
in Section 13.4, interest (except defaulted interest) on the Debt Securities of
any series which is payable on any interest payment date shall be paid to the
persons who are holders of Debt Securities of such series at the close of
business on the record date specified for that purpose
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as contemplated by Section 2.2. At the option of the Company, payment of
interest on any series of Debt Securities may be made by check mailed to the
holder's registered address.
If the Company defaults in a payment of interest on the Debt Securities of
any series, it shall pay the defaulted interest to the persons who are holders
of Debt Securities of such series at the close of business on a subsequent
special record date. The Company shall fix the record date (which shall be not
less than five Business Days prior to the date of payment of such defaulted
interest) and payment date. At least 15 days before the record date, the
Company shall mail to each holder of Debt Securities of such series a notice
that states the record date, the payment date and the amount of defaulted
interest to be paid. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Debt Security of such
series and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee or any paying agent for such series an amount of
money in immediately available funds by 10:00 a.m. New York time on the payment
date equal to the aggregate amount proposed to be paid in respect of such
defaulted interest or shall make arrangements satisfactory to any Paying Agent
for such series for such deposit prior to the date of the proposed payment. The
Company may pay defaulted interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Debt Security may
be listed, and upon notice as may be required by such exchange if, after notice
given by the Company to the Trustee of the proposed payment pursuant to this
clause, such payment shall be deemed practicable by the Trustee.
SECTION 2.13. Global Securities; Depositary. For the purpose of this
Section, the term "Agent Member" means a member of, or participant in, a
Depositary; the term "Depositary" means, with respect to Debt Securities
issuable or issued in whole or in part in the form of one or more Global
Securities, the entity designated as Depositary by the Company pursuant to
Section 2.2, and, if at any time there is more than one such person,
"Depositary" as used with respect to the Debt Securities shall mean the
respective Depositary with respect to a particular series of Debt Securities;
and the term "Global Security" means a global certificate evidencing all or part
of the series of Debt Securities as shall be specified herein, issued to the
Depositary for the series or such portion of the series, and registered in the
name of such Depositary or its nominee. The Global Security may provide that it
shall represent the aggregate amount of Outstanding Debt Securities from time to
time endorsed thereon which may from time to time be reduced to reflect
exchanges. Any endorsement to reflect the amount, or any increase or decrease
in the amount, of Outstanding Debt Securities shall be made by the Trustee.
Notwithstanding Section 2.10, except as otherwise specified as contemplated
by Section 2.2, hereof, any Global Security shall be exchangeable only as
provided in this paragraph. A Global Security shall be exchangeable pursuant to
this Section 2.13 if (i) the Depositary noti fies the Company that it is
unwilling or unable to continue as Depositary for such Global Security or if at
any time the Depositary ceases to be a clearing agency registered under the
Securities Exchange Act, (ii) the Company in its sole discretion determines that
all Global Securities of any series then outstanding under this Indenture shall
be exchangeable for definitive Debt Securities of such series in registered form
or (iii) an Event of Default with
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respect to the Debt Securities of the series represented by such Global Security
has occurred and is continuing. Any Global Security of such series exchangeable
pursuant to the preceding sentence shall be exchangeable for definitive Debt
Securities of such series in registered form, bearing interest (if any) at the
same rate or pursuant to the same formula, having the same date of issuance,
redemption, conversion (if any) and other provisions, and of differing
denominations aggregating a like amount. Such definitive Debt Securities of such
series shall be registered in the names of the owners of the beneficial
interests in such Global Securities of such series as such names are from time
to time provided by the relevant participants in the Depositary holding such
Global Securities (as such participants are identified from time to time by such
Depositary).
No Global Security may be transferred except as a whole by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor. Except as provided above, owners solely of beneficial interests
in a Global Security shall not be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
holders of Debt Securities thereof for any purpose under this Indenture.
Any Global Security that is exchangeable pursuant to the preceding
paragraph shall be exchangeable for Debt Securities of such series in authorized
denominations and registered in such names as the Depositary that is the holder
of Debt Securities of such Global Securities of such series shall direct.
In the event that a Global Security is surrendered for redemption in part
pursuant to Section 5.2 or 5.5, the Company shall execute, and the Trustee or
the Authenticating Agent shall authenticate and deliver to the Depositary for
such Global Security, without service charge, a new Global Security in a
denomination and tenor equal to and in exchange for the unredeemed portion of
the principal for the Global Security so surrendered.
The Agent Members shall have no rights under this Indenture with respect to
any Global Security held on their behalf by a Depositary, and such Depositary
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee, or any agent of the Company or the Trustee, from giving effect to any
written certification, proxy or other authorization furnished by a Depositary or
impair, as between a Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of a Debt
Security of any series, including without limitation the granting of proxies or
other authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a holder
of Debt Securities is entitled to give or take under this Indenture.
The Trustee shall not be required to authenticate Global Securities until
it has received documentation satisfactory to it.
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ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Rights under Indenture limited to the parties and holders of
Debt Securities. Nothing in this Indenture or the Debt Securities, express or
implied, is intended or shall be construed to confer upon, or to give to, any
person or corporation, other than the parties hereto, their successors and
assigns, and the holders of the Debt Securities, any right, remedy or claim
under or by reason of this Indenture or any provision hereof; and the provisions
of this Indenture are for the exclusive benefit of the parties hereto, their
successors and assigns, and the holders of the Debt Securities.
SECTION 3.2. Certificate of independent accountants conclusive. Unless
otherwise specifically provided, the certificate or opinion of an independent
firm of public accountants of recognized standing selected by the Board of
Directors and acceptable to the Trustee in the exercise of reasonable care
(which firm may be regular independent accountants to the Company ), shall be
conclusive evidence of the correctness of any computation made under the
provisions of this Indenture, and wherever reference is made in this Indenture
to "generally accepted accounting principles" the certificate or opinion of such
a firm shall be conclusive evidence thereof. The Company shall furnish to the
Trustee upon its request a copy of any such certificate or opinion.
SECTION 3.3. Treatment of Debt Securities owned or held by the Company in
determining required percentages. For all purposes of this Indenture, in
determining whether the holders of a required percentage or proportion of the
principal amount of Debt Securities of one or more series have concurred in any
request, waiver, vote, direction or consent, Debt Securities owned or held by or
for the account or for the benefit of the Company or any other obligor under
this Indenture or any Affiliate shall be disregarded and deemed not Outstanding,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such request, waiver, direction or consent, only
Debt Securities which the Trustee knows to be so owned or held shall be so
disregarded. Debt Securities so owned which have been pledged in good faith to
secure an obligation may be regarded as Outstanding for all such purposes, if
the Trustee receives an Officers' Certificate stating that said Debt Securities
have been so pledged, that the pledgee is entitled to vote with respect to such
Debt Securities and that the pledgee is not the Company or any other obligor on
the Debt Securities, an Affiliate of the Company or an Affiliate of such other
obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be conclusive, and, subject to the
provisions of Section 11.1 of this Indenture, shall afford full protection to
the Trustee.
SECTION 3.4. Remaining provisions not affected by invalidity of any other
provisions -required provisions of Trust Indenture Act of 1939 to control. In
case any one or more of the provisions contained in this Indenture or in the
Debt Securities of any series shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality
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or unenforceability shall not affect any other provision of this Indenture, but
this Indenture shall be construed as if such invalid, illegal or unenforceable
provisions had never been contained herein.
If any provision of this Indenture limits, qualifies or conflicts with any
other provision of this Indenture which is required to be included in an
indenture qualified under the Trust Indenture Act of 1939, such provision which
is so required to be included shall control. If any provisions of this
Indenture modifies or excludes any provisions 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 excluded, as the case may be.
SECTION 3.5. Company released from Indenture requirements if entitled to
have Indenture cancelled. Whenever by the terms of this Indenture the Company
and the Guarantors shall be required to do or not to do anything so long as any
of the Debt Securities shall be Outstanding of any series, the Company and the
Guarantors shall, notwithstanding any such provision, not be required to comply
with such provision with respect to such series if it shall be entitled to have
this Indenture satisfied and discharged pursuant to the provisions hereof, even
though in either case the holders of any of the Debt Securities of such series
shall have failed to present and surrender such Debt Securities for payment
pursuant to the terms of this Indenture.
SECTION 3.6. Date of execution. Although this Indenture, for convenience
and for the purpose of reference, is dated as of the date first above written,
the actual date of execution by the Company, the Guarantors and by the Trustee
is as indicated by their respective acknowledgements hereto annexed.
SECTION 3.7. Execution of documents furnished under the Indenture. Unless
otherwise expressly provided, any order, notice, request, demand, certificate or
statement of the Company or any Guarantor required or permitted to be made or
given under any provision hereof shall be sufficiently executed if signed by its
Chairman of the Board, President or any Vice President (regardless of Vice
Presidential designation), and by its Chief Financial Officer, Treasurer, any
Assistant Treasurer, Secretary or any Assistant Secretary.
SECTION 3.8. Officers' Certificate and Opinions of Counsel to be furnished
to Trustee. Upon any application, demand or request by the Company or any
Guarantor to the Trustee to take any action under any of the provisions of this
Indenture, the Company and each Guarantor, as the case may be, shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with, and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with and that such
action is in compliance with applicable law.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the
person making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the
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nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based; (c) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with; and (d) a
statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Any certificate, statement or opinion of an officer of the Company and any
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate, statement or opinion of counsel may be
based, insofar as it relates to factual matters, information with respect to
which is in the possession of the Company and the Guarantors, upon the
certificate, statement or opinion of or representations by an officer or
officers of the Company and the Guarantors, as the case may be, unless such
counsel knows that the certificate, statement or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Company, any
Guarantor, or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant or
firm of accountants in the employ of the Company and the Guarantors, as the case
may be, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 3.9. Presentation of notices and demands. All notices to or
demands upon the Trustee shall be in writing and may be served or presented at
the principal office of the Trustee. Any notice to or demand upon the Company
or any Guarantor shall be deemed to have been sufficiently given or served by
the Trustee or the holders of Debt Securities, for all purposes, by being mailed
by first class mail addressed to the Company, attention of the President, at 300
WillowBrook Office Park, Fairport, New York 14450, or at such other address or
to such other counsel, as may be filed in writing by the Company with the
Trustee.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to holders of Debt Securities of any event, such notice
shall be sufficiently given to holders of Debt Securities if in writing and
mailed, first-class postage prepaid, to each holder of a Debt Security affected
by such event, at the address of such holder as it appears in the Debt Security
register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice.
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In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice to holders of Debt
Securities by mail, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case where notice to holders of Debt Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular holder of a Debt Security shall affect the sufficiency
of such notice with respect to other holders of Debt Securities.
SECTION 3.10. Successors and assigns bound by Indenture. All the
covenants, promises and agreements in this Indenture contained by or on behalf
of the Company, the Guarantors or by or on behalf of the Trustee, shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed or not.
SECTION 3.11. Descriptive headings for convenience only. The descriptive
headings of the several Articles of this Indenture are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 3.12. New York law to govern. This Indenture and each Debt
Security shall be deemed to be a contract made under the laws of the State of
New York, and for all purposes shall be construed in accordance with the laws of
said jurisdiction, and the rights, obligations, duties, immunities and
limitations of rights of the Trustee shall be construed in accordance with the
laws of the State of New York.
SECTION 3.13. Indenture may be executed in counterparts. This Indenture
may be simultaneously executed in any number of counterparts, each of which when
so executed and delivered shall be an original, but such counterparts shall
together constitute but one and the same instrument. Harris Trust and Savings
Bank, as Trustee, hereby accepts the trusts in this Indenture declared and
provided upon the terms and conditions hereinbefore set forth.
ARTICLE IV
COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
SECTION 4.1. Payment of Principal and interest. The Company and each
Guarantor will for the benefit of each series of Debt Securities duly and
punctually pay or cause to be paid the principal of, premium, if any, and
interest on the Debt Securities of such series at the times and place and in the
manner specified in this Indenture, the Guarantees and in the Debt Securities of
such series. At the option of the Company, interest on the Debt Securities
shall be payable without presentation of such Debt Securities by a check to the
registered holder. Any payment of principal and any premium or interest
required to be made on an interest payment date, redemption date or at maturity
which is not a Business Day need not be made on such date, but may be made on
the next succeeding Business Day with the same force and
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effect as if made on such interest payment date, redemption date or at maturity,
as the case may be, and no interest shall accrue for the period from and after
such interest payment date, redemption date or maturity.
SECTION 4.2. Maintenance of office or agency. So long as any of the Debt
Securities of any series remain unpaid, the Company will at all times keep an
office or agency in New York, New York, where Debt Securities of such series may
be presented for registration of transfer and exchange as in this Indenture
provided, where notices and demands with respect to the Debt Securities and this
Indenture may be served and where the Debt Securities may be presented for
payment or, for Debt Securities of each series that is convertible, for
conversion. The principal office of the Trustee shall be the office or agency
for all of the aforesaid purposes unless otherwise provided in a supplemental
indenture or unless the Company shall maintain some other office or agency with
respect to the Debt Securities of any series for such purposes and shall give
the Trustee written notice of the location thereof. In case the Company shall
fail to maintain such office or agency, presentations may be made and notices
and demands may be served at the principal office of the Trustee.
The Company shall keep, at said office or agency, a register or registers
in which, subject to such reasonable regulations as it may prescribe, the
Company shall register or cause to be registered Debt Securities of each series
and shall register or cause to be registered the transfer or exchange of Debt
Securities of each series as in Article II provided. Such register or registers
shall be in written form in the English language or any other form capable of
being converted into written form within a reasonable time. At all reasonable
times, such register or registers shall be open for inspection by the Trustee.
SECTION 4.3. Corporate existence. Subject to Article X hereof, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and the rights (charter and
statutory) and franchises of the Company and each Guarantor; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business and its Guarantors as a whole and that
the loss thereof is not disadvantageous in any material respect to the holders
of Debt Securities.
SECTION 4.4. Restrictions on mergers, sales and consolidations. So long
as any of the Debt Securities remain unpaid, neither the Company nor any
Guarantor will consolidate or merge with or sell, convey or lease all or
substantially all of its property to any other corporation, partnership or
limited liability company except (a) to the extent expressly permitted pursuant
to the terms of any supplemental indenture governing any series of the Debt
Securities and (b) as otherwise permitted in Article X hereof.
SECTION 4.5. Further assurances. From time to time whenever requested by
the Trustee, the Company and the Guarantors will execute and deliver such
further instruments and assurances and do such further acts as may be reasonably
necessary or proper to carry out
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more effectually the purposes of this Indenture or to secure the rights and
remedies hereunder of the holders of the Debt Securities of any series.
SECTION 4.6. File certain reports and information with the Trustee and the
Securities and Exchange Commission - transmit to holders of Debt Securities
summaries of certain documents filed with the Trustee - furnish list of holders
of Debt Securities to the Trustee. The Company will:
(a) file with the Trustee, within 15 days after the Company files the
same with the Securities and Exchange Commission, copies of the annual
reports and of the information, documents and other reports which the
Company may be required to file with the Securities and Exchange Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 (or copies of such portions thereof as may be prescribed by the
Securities and Exchange Commission); or, if the Company is not required to
file with the Securities and Exchange Commission information, documents or
reports pursuant to either Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, then the Company will file with the Trustee and will
file with the Securities and Exchange Commission, in accordance with rules
and regulations prescribed by the Securities and Exchange Commission, such
of the supplementary and periodic information, documents and reports
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed in such rules and regulations;
(b) file with the Trustee and the Securities and Exchange Commission,
in accordance with the rules and regulations prescribed from time to time
by the Securities and Exchange Commission, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be required
by such rules and regulations;
(c) transmit to the holders of Debt Securities, in the manner and to
the extent provided in subdivision (c) of Section 11.10, such summaries of
any information, documents and reports required to be filed with the
Trustee pursuant to the provisions of subdivisions (a) and (b) of this
Section 4.6 as may be required by the rules and regulations of the
Securities and Exchange Commission; and
(d) furnish or cause to be furnished to the Trustee, not more than 15
days after each record date (but in no event less frequently than every six
months) for the payment of interest with respect to Debt Securities of any
series, and 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 in
such form as the Trustee may reasonably require containing all information
in the possession or control of the Company or of any Paying Agent, other
than the Trustee, as to the names and addresses of the holders of Debt
Securities of such series obtained since the date as of which the next
previous list, if any, was furnished; provided, that so long as the Trustee
is Debt Security registrar for such series, no such list need be furnished.
Any such list may be dated as
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of a date not more than 15 days prior to the time such information is
furnished or caused to be furnished, and need not include information
received after such date (excluding from any such list names and addresses
received by the Trustee in its capacity as Debt Security registrar).
SECTION 4.7. File statement by officers annually with the Trustee. Within
120 days after the close of the fiscal year ending February 28, 1999, and within
120 days after the close of each fiscal year thereafter, the Company will file
with the Trustee a brief certificate from the chief executive officer, chief
financial officer or treasurer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For purposes
of this paragraph, such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture.
SECTION 4.8. Duties of Paying Agent. The Company will cause each Paying
Agent for the Debt Securities of any series other than the Trustee to execute
and deliver to the Trustee an instrument in which such agent shall agree with
the Trustee:
(a) that it will hold all sums held by it as such agent for the
payment of the principal of, premium, if any, or interest on the Debt
Securities of such series (whether such sums have been paid to it by the
Company or by any other obligor on the Debt Securities of such series) in
trust for the benefit of the holders of the Debt Securities of such series;
(b) that it will give the Trustee written notice of any failure by the
Company (or by any other obligor on the Debt Securities of such series) to
make any payment of the principal of, premium, if any, or interest on the
Debt Securities of such series when the same shall be due and payable; and
(c) that it will, at any time during the continuance of any Event of
Default with respect to such series, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent.
If the Company acts as its own Paying Agent for the Debt Securities of any
series, it will, on or before each due date of the principal of, premium, if
any, or interest on the Debt Securities of such series, set aside and segregate
and hold in trust for the benefit of the holders of the Debt Securities of such
series a sum sufficient to pay such principal, premium, if any, or interest and
will notify the Trustee of such action or any failure to take such action.
Whenever the Company shall have one or more Paying Agents for any series of
Debt Securities, it will, on or before each due date of the principal of,
premium, if any, or interest on any Debt Securities of such series, deposit with
the Paying Agent or Agents for the Debt Securities of such series a sum, by
10:00 a.m. New York time in immediately available funds on the payment date,
sufficient to pay the principal, premium, if any, or interest so becoming
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due with respect to the Debt Securities of such series, and (unless such paying
agent is the Trustee) the Company will promptly notify the Trustee in writing of
any failure so to act.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture with respect to the Debt Securities of one or
more series or for any other purpose, pay, or by Company order direct any Paying
Agent for such series 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 payment.
Anything in this Section 4.8 to the contrary notwithstanding, the agreement
to hold sums in trust as provided in this Section 4.8 shall be subject to the
provisions of Section 6.3.
ARTICLE V
REDEMPTION OF DEBT SECURITIES; SINKING FUND
SECTION 5.1. Applicability of Article. Debt Securities of any series
which are redeemable before their stated maturity at the election of the Company
or through the operation of any sinking fund for the retirement of Debt
Securities of such series shall be redeemable in accordance with their terms
established pursuant to Section 2.2 and (except as otherwise established
pursuant to Section 2.2 for Debt Securities of such series) in accordance with
this Article.
SECTION 5.2. Notice of redemption to be given to Trustee - deposit of cash
(or other form of payment) with Trustee - selection by Trustee of Debt
Securities to be redeemed. Not less than 30 days (or such lesser number of days
as the Trustee shall approve) nor more than 60 days (or such greater number of
days as the Trustee shall approve) prior to the date fixed by the Company for
the redemption at the option of the Company of any Debt Securities of any series
which are subject to redemption or portions thereof, the Company shall give
written notice, by delivering a Company Order to the Trustee, stating the
aggregate principal amount of Debt Securities of such series which the Company
elects to redeem and the date and place fixed for redemption, that the Company,
in the case of any redemption of Debt Securities subject to any restrictions on
such redemption provided in the terms of Debt Securities of such series
established pursuant to Section 2.2 or elsewhere in this Indenture, is in
compliance with such restrictions. On or before 10:00 a.m. New York time of the
date fixed for redemption, the Company shall deposit with the Trustee or the
Paying Agent money in immediately available funds on such redemption date (or
other form of payment if permitted by the terms of such Debt Securities) in an
amount sufficient to redeem on the date fixed for redemption all the Debt
Securities of such series or portions thereof to be redeemed, other than any
Debt Securities of such series called for redemption on such date which have
been converted prior to the date of such deposit, at the appropriate redemption
price, together with any accrued interest to the date fixed for redemption. If
less than all the Debt Securities then
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Outstanding of such series are to be redeemed, the Trustee shall select,
substantially pro rata or by lot, in such manner as it shall deem appropriate
and fair, in its sole discretion, the numbers of the Debt Securities to be
redeemed as a whole or in part, and shall thereafter promptly notify the Company
in writing of the numbers of the Debt Securities to be redeemed; provided,
however, that Debt Securities of such series registered in the name of the
Company shall be excluded from any such selection for redemption until all Debt
Securities of such series not so registered shall have been previously selected
for redemption. For the purpose of such selection in case of redemption of less
than all of the Debt Securities of any series, the Trustee and the Company shall
have the option to treat as Outstanding Debt Securities any Debt Securities of
such series which are surrendered for conversion after the fifteenth day
immediately preceding the mailing of the notice of such redemption, and need not
treat as Outstanding Debt Securities any Debt Securities authenticated and
delivered during such period in exchange for the unconverted portion of any Debt
Securities converted in part during such period. In case any series of Debt
Securities shall be redeemed in part only, the notice of redemption shall
specify the principal amount thereof to be redeemed and shall state that, upon
surrender thereof for redemption, a new Debt Security or new Debt Securities of
the same series of an aggregate principal amount equal to the unredeemed portion
of such Debt Security will be issued in lieu thereof; and in such case the
Company shall execute and the Trustee or the Authenticating Agent shall
authenticate and deliver such new Debt Security or Debt Securities of such
series to or upon the written order of the holder of Debt Securities, at the
expense of the Company. Provisions of this Indenture that apply to Debt
Securities called for redemption also apply to portions of Debt Securities
called for redemption.
Upon or after the receipt of such notice, the Trustee, in the name of the
Company and as its agent, shall mail by first-class mail, postage prepaid, to
each registered holder of a Debt Security to be redeemed in whole or in part at
his last address appearing on the registration books of the Company, a notice of
redemption. Such notice of redemption shall identify the Debt Securities to be
so redeemed in whole or in part and whether such Debt Securities are to be
redeemed in whole or in part and shall state: (i) the date fixed for
redemption; (ii) the redemption price at which Debt Securities are to be
redeemed and method of payment, if other than in cash; (iii) if applicable, the
current conversion price or rate; (iv) if applicable, that the right of the
holder of Debt Securities to convert Debt Securities called for redemption shall
terminate at the close of business on the date fixed for redemption (or such
other day as may be specified as contemplated by Section 2.2 for Debt Securities
of any series); (v) if applicable, that holders of Debt Securities who want to
convert Debt Securities called for redemption must satisfy the requirements for
conversion contained in such Debt Securities; (vi) that, subject to Section
13.4, interest, if any, accrued to the date fixed for redemption will be paid as
specified in said notice and that on and after said date interest thereon shall
cease to accrue; (vii) the provision of the Debt Security or this Indenture
under which the redemption is being made; and (viii) that the Company so elects
to redeem such Debt Securities or portions thereof at the place or places
specified in such notice. Such notice shall be mailed not later than the tenth,
and not earlier than the sixtieth, day before the date fixed for redemption.
Any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder receives such
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notice; and failure duly to give such notice by mail, or any defect in such
notice, to the holder of any series of Debt Securities designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debt Security.
The Company shall pay to the Trustee the cost of mailing notices of
redemption and any other necessary expenses incurred by the Trustee in
connection therewith.
SECTION 5.3. Debt Securities called for redemption to become due - rights
of holders of redeemed Debt Securities - return of funds on conversion. The
notice of election to redeem having been mailed as hereinbefore provided, the
Debt Securities or portions thereof called for redemption shall become due and
payable on the redemption date at the applicable redemption price, together with
interest accrued to the date fixed for redemption, at the place or places
specified in such notice, and if cash (or other form of payment if permitted by
the terms of such Debt Securities) in the amount necessary to redeem such Debt
Securities or portions thereof has been deposited with the Trustee, interest on
such Debt Securities or portions thereof shall cease to accrue from and after
the date fixed for redemption (unless the Company shall default in the payment
of the redemption price, plus accrued interest, if any) and the right to convert
such Debt Securities or portions thereof, if the terms of such Debt Securities
provide for conversion pursuant to Section 2.2, shall terminate at the close of
business on the date fixed for redemption or such other day as may be specified
as contemplated by Section 2.2 for Debt Securities of such series. The
respective registered holders of Debt Securities or portions thereof so called
for redemption shall be entitled to receive payment of the applicable redemption
price, together with interest accrued to the date fixed for redemption on or
after the date fixed for redemption (unless the Company shall default in the
payment of the redemption price, plus accrued interest, if any), upon
presentation and surrender at the place or places of payment specified in such
notice. Notwithstanding the foregoing, subject to Section 13.4, if the record
date for payment of interest is on or prior to the redemption date, such
interest shall be payable to the persons who are holders of such Debt Securities
on such record date according to the terms of such Debt Securities and Section
2.12.
If any series of Debt Securities called for redemption pursuant to Section
5.1 is converted pursuant to Article XIII, any monies deposited with the Trustee
for the purpose of paying or redeeming any such Debt Security shall be promptly
paid to the Company.
SECTION 5.4. Credits against sinking fund. Against any one or more
sinking fund payments to be made pursuant to the terms of the Debt Securities of
any series providing for a sinking fund, the Company may elect, by delivery of
an Officers' Certificate to the Trustee, at least 45 days prior to the sinking
fund payment date (or such shorter period as may be acceptable to the Trustee or
is otherwise specified as contemplated by Section 2.2 for Debt Securities of any
series), to take credit for any Debt Securities of such series or portions
thereof acquired or redeemed by the Company, pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, which have not
previously been used by the Company for the purposes permitted in this Section
5.4 and for any Debt Securities which have been converted
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pursuant to the terms of such Debt Securities. Such Debt Securities shall be
received and credited for such purpose by the Trustee at the redemption price
specified in such Debt Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. Upon any such election the Company shall receive credit against
such sinking fund payments required to be made in the order in which they are to
be made. Any series of Debt Securities for which credit is elected to be taken
which shall not theretofore have been delivered to the Trustee for cancellation
shall at the time of such election be delivered to the Trustee for cancellation
by the Trustee.
SECTION 5.5. Redemption through sinking fund. Each sinking fund payment
made under the terms of the Debt Securities of any series established pursuant
to Section 2.2 shall be applied to the redemption of Debt Securities of such
series on the date for redemption specified in the Debt Securities of such
series next succeeding such sinking fund payment date; provided, however, if at
any time the amount of cash to be paid into the sinking fund for such series on
the next succeeding such sinking fund payment date; provided, however, if at any
time the amount of cash to be paid into the sinking fund for such series on the
next succeeding sinking fund payment date, together with any unused balance of
any preceding sinking fund payment or payments for such series, shall not exceed
in the aggregate $10,000, the Trustee, unless requested by the Company, shall
not give notice of the redemption of Debt Securities of such series through the
operation of the sinking fund on the succeeding date for redemption specified in
the Debt Securities of such series. At least 45 days (or such lesser number of
days as the Trustee shall approve) prior to the date on which a sinking fund
payment with respect to the Debt Securities of any series is due, the Company
shall give written notice to the Trustee of the principal amount of Debt
Securities of such series registered in the name of the Company (which shall be
excluded from such redemption) and the Trustee shall select, substantially pro
rata or by lot, in such manner as it shall deem appropriate and fair, the
principal amount of Debt Securities of such series to be redeemed in accordance
with the terms of the Debt Securities of such series after allowance for any
credit elected under Section 5.4 and shall, in the name and at the expense of
the Company and as its agent, give notice of such redemption, all in the manner
provided for in Section 5.2, except that such notice shall state that the Debt
Securities of such series are being redeemed for the sinking fund. The notice
of redemption having been mailed as hereinbefore provided, the Debt Securities
or portions thereof called for redemption shall become due and payable on the
next succeeding date for redemption specified in the Debt Securities of such
series at the sinking fund redemption price thereof, all in the manner and with
the effect provided for in Section 5.3.
Any sinking fund payment not so required to be applied to the redemption of
Debt Securities of any series on the date for redemption specified in the Debt
Securities of such series next succeeding any sinking fund payment date may, at
the direction of the Company as evidenced by a Company Order, be applied by the
Trustee prior to the forty-fifth day preceding the next following sinking fund
payment date for such series, in such manner and from time to time, in such
amount as the Company may direct the Trustee in writing, so far as such moneys
shall be adequate, to the purchase for the sinking fund of Debt Securities of
such series or portions thereof, in the open market, from the Company or
otherwise, at prices
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(exclusive of accrued interest and brokerage commissions) not in excess of the
sinking fund redemption price for such series. The Company agrees to pay to the
Trustee, upon request, accrued interest and brokerage commissions paid by the
Trustee with respect to any Debt Securities of such series so purchased by the
Trustee and such accrued interest and brokerage commissions shall not be charged
against the sinking fund for such series.
Any unused balance of sinking fund moneys with respect to Debt Securities
of any series remaining in the hands of the Trustee on the forty-fifth day
preceding the sinking fund payment date for such series in any year shall be
added to any sinking fund payment for such series to be made in cash in such
year, and together with such payment, if any, shall be applied to the redemption
or purchase of Debt Securities of such series in accordance with the provisions
of this Section 5.5, provided that any sinking fund moneys so remaining in the
hands of the Trustee after the date specified in the Debt Securities of such
series and not utilized in the purchase of Debt Securities of such series as
provided in this Section 5.5 shall be applied by the Trustee to the payment of
Debt Securities at maturity.
SECTION 5.6. Debt Securities no longer Outstanding after notice to Trustee
and deposit of cash. If the Company, having given notice to the Trustee as
provided in Section 5.1 or 5.2, shall have deposited with the Trustee or the
Paying Agent, for the benefit of the holders of any Debt Securities of any
series or portions thereof called for redemption in whole or in part cash or
other form of payment if permitted by the terms of such Debt Securities (which
amount shall be immediately due and payable to the holders of such Debt
Securities or portions thereof) in the amount necessary so to redeem all such
Debt Securities or portions thereof on the date fixed for redemption and
provision satisfactory to the Trustee shall have been made for the giving of
notice of such redemption, such Debt Securities, or portions thereof, shall
thereupon, for all purposes of this Indenture, be deemed to be no longer
Outstanding, and the holders thereof shall be entitled to no rights thereunder
or hereunder, except the right to receive payment of the applicable redemption
price, together with interest accrued to the date fixed for redemption, on or
after the date fixed for redemption of such Debt Securities or portions thereof
and the right to convert such Debt Securities or portions thereof, if the terms
of such Debt Securities provide for convertibility pursuant to Section 2.2, at
or prior to the close of business on the date fixed for redemption.
SECTION 5.7. Conversion arrangement on call for redemption. In connection
with any redemption of Debt Securities, the Company may arrange for the purchase
and conversion of any Debt Securities called for redemption by an agreement with
one or more investment bankers or other purchasers to purchase such Debt
Securities by paying to the Trustee or the Paying Agent in trust for the holders
of Debt Securities, on or before 10:00 a.m. New York time on the redemption
date, an amount no less than the redemption price, together with interest, if
any, accrued to the redemption date of such Debt Securities, in immediately
available funds. Notwithstanding anything to the contrary contained in this
Article V, the obligation of the Company and the Guarantors to pay the
redemption price of such Debt Securities, including all accrued interest, if
any, shall be deemed to be satisfied and discharged to the extent such amount is
so paid by such purchasers. If such an agreement is entered into, any Debt
Securities not duly surrendered for conversion by the holders thereof
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may, at the option of the Company, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such holders and (notwithstanding anything
to the contrary contained in Article XIII) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the last day
on which Debt Securities of such series called for redemption may be converted
in accordance with this Indenture and the terms of such Debt Securities, subject
to payment of the above amount aforesaid. The Trustee or the Paying Agent shall
hold and pay to the holders of Debt Securities whose Debt Securities are
selected for redemption any such amount paid to it in the same manner as it
would moneys deposited with it by the Company for the redemption of Debt
Securities. Without the Trustee's and the Paying Agent's prior written consent,
no arrangement between the Company and such purchasers for the purchase and
conversion of any Debt Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any Debt
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Trustee and the Paying Agent in the defense of any
claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations under
this Indenture.
ARTICLE VI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 6.1. Satisfaction and discharge of Indenture with respect to Debt
Securities of any series. If (a) the Company shall deliver to the Trustee for
cancellation all Debt Securities of any series theretofore authenticated (other
than any such Debt Securities which shall have been destroyed, lost or stolen
and in lieu of or in substitution for which other such Debt Securities shall
have been authenticated and delivered or Debt Securities for whose payment money
(or other form of payment if permitted by the terms of such Debt Securities) has
theretofore been held in trust and thereafter repaid to the Company, as provided
in Section 6.3) and not theretofore cancelled, or (b) the Company shall
irrevocably deposit (subject to Section 6.3) with the Trustee or Paying Agent as
trust funds the entire amount in cash or U.S. Government Obligations sufficient
to pay at maturity or upon redemption all of the Debt Securities of such series
(other than any Debt Securities which shall have been destroyed, lost or stolen
and in lieu of or in substitution for which other Debt Securities shall have
been authenticated and delivered or Debt Securities for whose payment money (or
other form of payment if permitted by the terms of such Debt Securities) has
theretofore been held in trust and thereafter repaid to the Company, as provided
in Section 6.3) not theretofore paid, surrendered or delivered to the Trustee
for cancellation, including the principal, premium, if any, and interest due or
to become due to such date of maturity or redemption date, as the case may be,
and if in either case the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company and the Company shall deliver to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that in
the opinion of the signers
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all conditions precedent to the satisfaction and discharge of this Indenture
with respect to the Debt Securities of such series have been complied with (and,
in the event that such deposit shall be made more than one year prior to the
maturity of the Debt Securities of such series, such Opinion of Counsel shall
also state that such deposit will not result in an obligation of the Company,
the Trustee or the trust fund created by such deposit to register as an
investment company under the Investment Company Act of 1940, as amended) and a
certificate (upon which the Trustee may rely) of a firm of independent public
accounts of recognized national standing selected by the Board of Directors (who
may be the regular accountants employed by the Company) stating that the cash,
if any, and U.S. Government Obligations, if any, deposited as set forth above
are sufficient to pay at maturity or upon redemption all of the Debt Securities
of such series as set forth above, then, except with respect to the remaining
rights of conversion of any Debt Securities the terms of which provide for
conversion (which shall continue in full force and effect pursuant to the terms
set forth in Article XIII to the extent provided for in such terms) or to rights
of exchange or registration of transfer or of the Company's right of optional
redemption of any Debt Securities of such series, this Indenture shall cease to
be of further effect with respect to the Debt Securities of such series, and the
Trustee, on demand of and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging this Indenture
with respect to the Debt Securities of such series. Notwithstanding the
satisfaction and discharge of this Indenture with respect to the Debt Securities
of such series, the obligations of the Company and the Guarantors to the Trustee
under Section 11.2 shall survive, and if moneys or U.S. Government Obligations
shall have been irrevocably deposited with the Trustee or Paying Agent pursuant
to clause (b) of this Section, the obligations of the Trustee under Section 6.2
and the first paragraph of Section 6.3 shall survive.
In order to have money available on a payment date to pay the principal of,
premium, if any, or interest, if any, on the Debt Securities, the U.S.
Government Obligations shall be payable as to principal or interest on or before
such payment date in such amounts as will provide the necessary money. Such
U.S. Government Obligations shall not be callable at the issuer's option.
SECTION 6.2. Deposits for payment or redemption of Debt Securities to be
held in trust. Subject to the provisions hereinafter contained in this Article
VI, any moneys or U.S. Government Obligations (or other form of payments if
permitted by the terms of such Debt Security) which at any time shall be
deposited by the Company, or on its behalf with the Trustee or Paying Agent, for
the purpose of paying or redeeming any of the Debt Securities of any series
shall be held in trust and applied by the Trustee to the payment to the holders
of the particular Debt Securities for the payment or redemption of which such
moneys (or other form of payments if permitted by the terms of such Debt
Security) have been deposited, of all sums due and to become due thereon for
principal, premium, if any, and interest, upon presentation and surrender of
such Debt Securities at the office or agency of the Company maintained as
provided in this Indenture. Neither the Company nor the Trustee (except as
provided in Section 11.2) nor any Paying Agent shall be required to pay interest
on any moneys so deposited.
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SECTION 6.3. Repayment of moneys. Any moneys or U.S. Government
Obligations deposited with the Trustee or any Paying Agent remaining unclaimed
by the holders of Debt Securities for two years after the date upon which the
principal of or interest on such Debt Securities shall have become due and
payable, shall (unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law) be repaid to the Company by the
Trustee or Paying Agent and such holders shall (unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law) thereafter be entitled to look to the Company only for payment thereof;
provided, however, that, before being required to make any such payment to the
Company, the Trustee or Paying Agent may, at the expense and written direction
of the Company, cause to be published once, in an Authorized Newspaper, a notice
that such moneys remain unclaimed and that, after the date set forth in said
notice, the balance of such moneys then unclaimed will be returned to the
Company.
Upon satisfaction and discharge of this Indenture, all moneys then held by
any Paying Agent other than the Trustee hereunder shall, upon demand of the
Company, be repaid to it and thereupon such Paying Agent shall be released from
all further liability with respect to such moneys.
The Trustee or any Paying Agent shall deliver or pay to the Company from
time to time upon a request in writing by the Company any moneys or U.S.
Government Obligations (or the principal or interest on such U.S. Government
Obligations) held by it as provided in Section 6.1 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof to the Trustee, are then in excess of the amount
thereof which then would have been required to be deposited for the purpose for
which such money or U.S. Government Obligations were deposited or received.
ARTICLE VII
REMEDIES UPON DEFAULT
SECTION 7.1. Events of Default defined -- acceleration of maturity upon
default --waiver of default after acceleration. The following events are hereby
defined for all purposes of this Indenture (except where the term is otherwise
defined for specific purposes) as Events of Default with respect to Debt
Securities of a particular series, unless it is either inapplicable to a
particular series or is specifically deleted or modified as contemplated by
Section 2.2 for the Debt Securities of such series, in addition to any other
events as may be defined as Events of Default pursuant to Section 2.2 for the
Debt Securities of such series:
(a) Failure of the Company to pay or provide for payment of the
principal of or premium, if any, on any of the Debt Securities of such
series, when and as the same shall become due and payable, whether at
maturity thereof, by call for redemption, through any mandatory sinking
fund, by redemption at the option of the holder of any
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series of Debt Securities pursuant to the terms of such Debt Security, by
declaration of acceleration or otherwise; or
(b) Failure of the Company to pay or provide for payment of any
installment of interest on any of the Debt Securities of such series, when
and as the same shall become due and payable, which failure shall have
continued for a period of 30 days; or
(c) Failure of the Company or the Guarantors to perform or observe any
other of the covenants or agreements on the part of the Company or the
Guarantors in this Indenture or in the Debt Securities of such series
(other than a covenant or agreement which has expressly been included in
this Indenture solely for the benefit of Debt Securities of any series
other than that series or is expressly made inapplicable to the Debt
Securities of such series pursuant to Section 2.2) or in the Guarantees,
which failure shall have continued for a period of 90 days after written
notice by certified or registered mail given to the Company or the
Guarantors, as the case may be, by the Trustee hereunder or to the Company
and to the Trustee from the holders of not less than 25% of the aggregate
principal amount of Debt Securities then Outstanding of such series under
this Indenture specifying such Event of Default or failure and requesting
that it be remedied and stating that such notice is a notice of an event
which, if continued for 90 days after such written notice, will become an
Event of Default;
(d) The institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking relief under any Bankruptcy Law or
the consent by it to the institution of proceedings thereunder or consent
by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or the making by the Company of an assignment for the benefit of
creditors, or the admission by the Company in writing of its inability to
pay its debts generally as they become due;
(e) The entry of a decree or order by a court having jurisdiction for
relief in respect of the Company, or adjudging the Company a bankruptcy or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any Bankruptcy Law or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company
or of any substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 180 consecutive days; or
(f) any Guarantee of any Guarantor that is a Significant Subsidiary
shall for any reason cease to be, or be asserted in writing by any such
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Guarantor thereof or the Company not to be, in full force and effect and
enforceable in accordance with its terms (other than by reason of the
termination of this Indenture or the release of any such Guarantee in
accordance with this Indenture), provided, however, that if the Company or
-------- -------
any Guarantor asserts in writing that any Guarantee is not in full force
and effect and enforceable in accordance with its terms, such assertion
shall not constitute an Event of Default for purposes of this subsection
(f) if (i) such written assertion is accompanied by an Opinion of Counsel
to the effect that, as a matter of law, the defect or defects rendering
such Guarantee unenforceable can be remedied within 10 days of the date of
such assertion, (ii) the Company or such Guarantor delivers an Officers'
Certificate to the effect that the Company or such Guarantor represents
that such defect or defects shall be so remedied within such 10-day period,
and (iii) such defect or defects are in fact so remedied within such 10-day
period: and provided, further, that notwithstanding anything to the
-------- -------
contrary in this subsection (f), any reduction in the maximum amount of any
such Guarantee in accordance with Article V shall not be an Event of
Default hereunder.
If one or more Events of Default shall occur and be continuing with respect
to Debt Securities then Outstanding of any series, then, and in each and every
such case, either the Trustee, by notice in writing to the Company, or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities then Outstanding of such series, by notice in writing to the Company
and to the Trustee, may declare the principal amount (or, if the Debt Securities
of such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of the Debt Securities of such
series) of all Debt Securities of such series and/or such other amount or
amounts as the Debt Securities or supplemental indenture with respect to such
series may provide, if not already due and payable, to be immediately due and
payable; and upon any such declaration all Debt Securities of such series shall
become and be immediately due and payable, anything in this Indenture or in any
of the Debt Securities of such series contained to the contrary notwithstanding.
This provision, however, is subject to the condition that if, at any time after
the principal of (and/or such other specified amount on) the Debt Securities of
such series shall so become due and payable, and before any judgement or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all the Debt
Securities of such series and the principal of (and/or such other specified
amount) and premium, if any, on any and all Debt Securities of such series which
shall have become due otherwise than by acceleration, with interest on such
principal (and/or such other specified amount) and premium, if any, and (to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest, at the rate specified in the Debt Securities of
such series (or, if no such rate is specified, at the rate borne by the Debt
Securities of such series), to the date of such payment or deposit, and the
reasonable compensation and expenses of the Trustee, and any and all defaults
under this Indenture with respect to the Debt Securities of such series, other
than the nonpayment of principal of (and/or such other specified amount) or
premium, if any, and accrued interest on
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Debt Securities of such series which shall have become due by acceleration,
shall have been remedied, then and in every such case the Trustee shall, upon
written request or consent of the holders of a majority in aggregate principal
amount of the Debt Securities then Outstanding of such series delivered to the
Company and to the Trustee, waive such default and its consequences and rescind
or annul such declaration and its consequences, but no such waiver, rescission
or annulment shall extend to or affect any subsequent default, or impair any
right consequent thereon.
For all purposes under this Indenture, if the portion of the principal
amount as may be specified in the terms of any Original Issue Discount
Securities shall have been accelerated and declared due and payable pursuant to
the provisions hereof, then, from and after such declaration, unless such
declaration has been rescinded and annulled, payment of such portion of the
principal amount thereof, together with interest, if any, thereon and all other
amounts owing thereunder, shall constitute payment in full of such Original
Issue Discount Securities.
SECTION 7.2. Covenant of Company to pay to Trustee whole amount due on
default in payment of Principal or interest - Trustee may recover judgment for
whole amount due -application of moneys received by the Trustee. In case the
Company or any Guarantor shall commit an Event of Default with respect to the
Debt Securities of any series described in Section 7.1(a) or (b) or any
Guarantee, then, upon demand of the Trustee, the Company and the Guarantors
shall pay to the Trustee, for the benefit of the holders of the Debt Securities
then Outstanding of such series, the whole amount which then shall have become
due on all such Debt Securities of such series for principal, premium, if any,
and interest, with interest on the overdue principal and premium, if any, and
(to the extent that payment of such interest is enforceable under applicable
law) upon overdue installments of interest, at the rate specified in the Debt
Securities of such series (or, if no such rate is specified, at the rate borne
by the Debt Securities of such series), and in addition thereto, such additional
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, liabilities, disbursements and
advances of the Trustee, any predecessor Trustee, their agents and counsel. In
case the Company or the Guarantors shall pay the same in accordance with the
provisions of this Section 7.2 and, prior to such payment neither the Trustee
nor the holders of the Debt Securities then Outstanding of such series shall
have taken any steps to begin enforcing their rights under this Indenture and so
long as no additional Event of Default with respect to the Debt Securities of
such series shall have occurred, from and after such payment, the Event of
Default giving rise to the demand by the Trustee pursuant to this Section 7.2
shall be deemed to be no longer continuing and shall be deemed to have thereupon
been remedied, cured or waived without further action upon the part of either
the Trustee or any of the holders of Debt Securities. In case the Company or
the Guarantors shall fail to pay the same forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute any
judicial proceedings at law or in equity for the collection of the sums so due
and unpaid and may prosecute such proceedings to judgment or final decree, and
may enforce the same against the Company or the Guarantors or any other obligor
upon the Debt Securities of such series and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Company or the Guarantors or any other obligor upon the Debt Securities of such
series, wherever
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situated. The right of the Trustee to recover such judgment shall not be
affected by the exercise of any other right, power or remedy for the enforcement
of the provisions of this Indenture.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, the Guarantors or any other obligor
upon the Debt Securities or the property of the Company, the Guarantors or of
such other obligor or their creditors, the Trustee (irrespective of whether the
principal of any Debt Securities shall then be due and payable as therein
expressed or by declaration of acceleration 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 to file and prove
a claim for the whole amount of principal, premium, if any, and interest owing
and unpaid in respect of the Debt Securities of any series for which it serves
as Trustee 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, any predecessor Trustee, their agents and counsel) and of the holders
of Debt Securities of such series allowed in such judicial proceeding, and to
receive payment of or on account of such claims and to distribute the same after
the deduction of its charges and expenses; and any receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) in any judicial proceeding
is hereby irrevocably authorized and instructed by each of the holders of Debt
Securities of such series 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 of Debt Securities of such series, to pay to the Trustee any amount
due it or any predecessor Trustee, for compensation and expenses, including
counsel fees incurred up to the date of such distribution. Nothing contained in
this Indenture shall be deemed to give to the Trustee any right to accept or
consent to any plan of reorganization, arrangement, adjustment or composition
affecting the holders of Debt Securities or the rights of any holder of Debt
Securities, or to authorize the Trustee to vote in respect of the claim of any
holder of Debt Securities in any such proceeding; provided, however, that the
Trustee may, on behalf of the holders of Debt Securities, vote for the election
of a trustee in bankruptcy or similar official and may be a member of any
creditors' committee.
Any moneys or property received by the Trustee under this Section 7.2 shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such moneys or property on account of
principal, premium, if any, or interest, upon presentation of the several Debt
Securities of the series in respect of which such moneys were received, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
First: To the payment of costs and expenses of collections, and
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and all advances made and expenses and liabilities incurred by the Trustee,
except as a result of its negligence or bad faith and all other amounts
owing to the Trustee or any predecessor Trustee pursuant to Section 11.2
hereof;
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Second: In case the principal of the Outstanding Debt Securities in
respect of which such moneys were received shall not have become due and be
unpaid, to the payment of interest on such Debt Securities, in the order of
the maturity of the installments of such interest, with interest (so far as
may be lawful) upon the overdue installments of interest at the rate
specified in such Debt Securities (or, if no such rate is specified, at the
rate borne by the Debt Securities of such series), such payments to be made
ratably to the persons entitled thereto;
Third: In case the principal of the Outstanding Debt Securities in
respect of which such moneys were received and/or such other amount or
amounts as the Debt Securities or supplemental indenture with respect to
such series shall provide, shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and unpaid upon
such Debt Securities for principal (and/or such other specified amount),
premium, if any, and interest, with interest on the overdue principal
(and/or such other specified amount), premium, if any, and (so far as may
be lawful) upon overdue installments of interest, at the rate specified in
such Debt Securities (or, if no such rate is specified, at the rate borne
by the Debt Securities of such series), and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon such
Debt Securities, then to the payment of such principal (and/or such other
specified amount), premium, if any, and interest, with interest on the
overdue principal (and/or such other specified amount), premium, if any,
and (so far as may be lawful) upon overdue installments of interest, at the
rate specified in such Debt Securities (or, if no such rate is specified,
at the rate borne by the Debt Securities of such series), without
preference or priority of principal (and/or such other specified amount)
and premium, if any, over interest, or of interest over principal (and/or
specified amount) and premium, if any, or of any installment of interest
over any other installment of interest, or of any such Debt Security over
any other such Debt Security, ratably to the aggregate of such principal
(and/or such other specified amount), premium, if any, and accrued and
unpaid interest; and
Fourth: To the payment of the remainder, if any, to the Company, its
successors or assigns, or to whomever may be so lawfully entitled to
receive the same, or as a court of competent jurisdiction may direct.
SECTION 7.3. Trustee may enforce rights of action without possession of
Debt Securities. All rights of action under this Indenture or any of the Debt
Securities Outstanding of any series hereunder enforceable by the Trustee may be
enforced by the Trustee without the possession of any of the Debt Securities or
the production thereof at the trial or other proceedings relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought for the
ratable benefit of the holders of the Debt Securities with respect to which the
rights are being exercised, subject to the provisions of this Indenture.
SECTION 7.4. Delays or omissions not to impair any rights or powers
accruing upon default. No delay or omission of the Trustee or of the holders of
Debt Securities to exercise any rights or powers accruing upon any default which
shall not have been remedied shall
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impair any such right or power, or shall be construed to be a waiver of any such
default or acquiescence therein; and every power and remedy given by this
Article VII to the Trustee and the holders of the Debt Securities of any series
may be exercised from time to time and as often as may be deemed expedient by
the Trustee or by the holders of the Debt Securities of such series.
SECTION 7.5. In Event of Default Trustee may protect and enforce its
rights by appropriate proceedings - holders of majority in aggregate Principal
amount of Debt Securities of a series may waive default. If any one or more
Events of Default shall happen and be continuing, the Trustee may, in its
discretion, proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee, being advised
by its counsel, shall deem most effectual to protect and enforce any of said
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific performance of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Provided the Debt Securities of any series shall not then be due and
payable by reason of a declaration pursuant to Section 7.1 hereof, the holders
of a majority in aggregate principal amount of the Debt Securities of such
series then Outstanding may on behalf of the holders of all of the Debt
Securities of such series waive by written notice any past default hereunder and
its consequences, except a default in the payment of interest on or principal
and premium, if any, of any of the Debt Securities of such series. In the case
of any such waiver, the Company, the Guarantors, the Trustee and the holders of
the Debt Securities of such series shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 7.6. Holders of majority in aggregate principal amount of Debt
Securities of any series may direct exercise of remedies. The holders of a
majority in aggregate principal amount of the Debt Securities then Outstanding
of any series shall have the right, by an instrument in writing executed and
delivered to the Trustee, to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee, or of exercising any power
or trust conferred upon the Trustee under this Indenture, with respect to the
Debt Securities of such series; provided, however, that subject to the
provisions of Section 11.1 of this Indenture, the Trustee shall have the right
to decline to follow any such direction if the Trustee, being advised by
counsel, determines that the action or proceedings so directed may not lawfully
be taken or if the Trustee in good faith shall, by Responsible Officers,
determine that the action or proceedings so directed would involve the Trustee
in personal liability, or would be unduly prejudicial to the holders of the Debt
Securities of such series not joining in such direction, it being understood
that the Trustee (subject to Section 11.1) shall have no duty to ascertain
whether or not such actions or forebearances are unduly prejudicial to such
holders, and the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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SECTION 7.7. Limitation on suits by holders of Debt Securities. No holder
of any Debt Security of any series shall have the right to institute any suit,
action or proceeding, in equity or at law for the execution of any trust or
power hereof, or for the enforcement of any other remedy under or upon this
Indenture or the Debt Securities of such series, unless the holders of a
majority in aggregate principal amount of the Debt Securities then Outstanding
of such series shall have made written request upon the Trustee and shall have
afforded to it a reasonable opportunity either to proceed to exercise the powers
hereinbefore granted or to institute such suit, action or proceeding in its own
name, as Trustee hereunder, and shall have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee shall have refused or neglected to comply with such
request for 60 days after its receipt of such request and no direction
inconsistent with such request shall have been given to the Trustee pursuant to
Section 7.6; it being understood and intended that no one or more holders of
Debt Securities of any series shall have any right under this Indenture or under
the Debt Securities, by his or their action, to enforce any right hereunder
except in the manner herein provided, and that all proceedings hereunder, at law
or in equity, shall be instituted, had and maintained in the manner herein
provided and for the ratable benefit of all holders of the Debt Securities of
such series. Notwithstanding any provision of this Indenture to the contrary,
the right, which is absolute and unconditional, of any holder of Debt Securities
to receive the payment of the principal of, premium, if any, and interest on his
Debt Securities at and after the respective due dates (including maturity by
call for redemption, through any sinking fund, declaration unless annulled
pursuant to Section 7.1 hereof, or otherwise), of such principal, premium, if
any, or interest, or the right, which is also absolute and unconditional, of any
holder of Debt Securities to require conversion of his Debt Securities pursuant
to Article XIII hereof if the terms of such Debt Securities provide for
convertibility pursuant to Section 2.2, or the right to institute suit for the
enforcement of any such payment at or after such due dates or of such right to
convert, shall not be impaired or affected without the consent of such holder,
and the obligation of the Company, which is also absolute and unconditional, to
pay the principal of, premium, if any, and interest on each of the Debt
Securities to the respective holders thereof at the times and places in the Debt
Securities expressed shall not be impaired or affected.
Notwithstanding anything to the contrary contained in this Section 7.7, the
parties to this Indenture and the holders of Debt Securities agree as follows:
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 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;
provided, however, that the provisions of this paragraph shall not apply to any
suit instituted, directly or through an agent or agents, by the Trustee, to any
suit instituted by any holder of Debt Securities of any series, or group of
holders of Debt Securities of any series, holding in the aggregate more than 10%
in aggregate principal amount of the Debt Securities then Outstanding of such
series or to any suit instituted by any holder of Debt Securities of any
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series for the enforcement of the payment of the principal of, premium, if any,
or interest on, any Debt Security of such series at or after the respective due
dates of such principal, premium, if any, or interest expressed in his Debt
Security of such series.
SECTION 7.8. No Debt Securities owned or held by, for the account of or
for the benefit of the Company to be deemed Outstanding for purpose of payment
or distribution. No Debt Securities owned or held by, for the account of or for
the benefit of the Company or any Affiliate (other than Debt Securities pledged
in good faith which would be deemed Outstanding under the provisions of Section
3.3) shall be deemed Outstanding for the purpose of any payment or distribution
provided for in this Article VII.
SECTION 7.9. Company and Trustee restored to former position on
discontinuance or abandonment of proceedings. If the Trustee shall have
proceeded to enforce any right under this Indenture with respect to the Debt
Securities of any series, and such proceedings shall have been discontinued or
abandoned because of waiver, or for any other reason, or shall have been
determined adversely to the Trustee, then, and in any such case, the Company,
the Guarantors, the Trustee and the holders of Debt Securities of such series
shall each be restored to their former positions and rights hereunder, and all
rights, remedies and powers of the Trustee shall continue as though no such
proceeding had been taken.
ARTICLE VII
EVIDENCE OF ACTION BY HOLDERS OF DEBT SECURITIES
SECTION 8.1. Evidence of action by holders of Debt Securities. Any
demand, request, consent, proxy or other instrument which this Indenture may
require or permit to be signed and executed by the holders of Debt Securities of
any series may be in any number of concurrent instruments of similar tenor, and
may be signed or executed by such holders of Debt Securities in person or by an
attorney duly authorized in writing. Proof of the execution of any such demand,
request, consent, proxy or other instrument, or of a writing appointing any such
attorney, shall be sufficient for any purpose of this Indenture if made in the
following manner: the fact and date of the execution by any person of such
demand, request, consent, proxy or other instrument or writing may be proved by
the certificate of any notary public, or other officer authorized to take
acknowledgments of deeds to be recorded in any state or country, that the person
signing such request or other instrument or writing acknowledged to him the
execution thereof, or by an affidavit of a witness of such execution. Where
such execution is by an officer of a corporation or association or a member of a
partnership on behalf of such corporation, association or partnership, or by a
trustee or other fiduciary, such certificate or affidavit shall also constitute
sufficient proof of his authority. The Trustee may nevertheless in its
discretion accept such other proof or require further proof of any matter
referred to in this Section 8.1 as it shall deem reasonable. The ownership of
Debt Securities shall be proved by the registry books or by a certificate of the
registrar thereof.
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The Trustee shall not be bound to recognize any person as a holder of Debt
Securities of any series unless and until his title to the Debt Securities of
such series held by him is proved in the manner in this Article VIII provided.
Any demand, request, discretion, waiver, consent, vote or other action of
the holder of any series of Debt Securities shall be conclusive and shall bind
all future holders of the same Debt Security and of any series of Debt
Securities issued in exchange or substitution therefor irrespective of whether
or not any notation in regard thereto is made upon such Debt Security. Any such
holder, however, may revoke the consent as to his Debt Security or portion
thereof. Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement, waiver or other
action becomes effective. An amendment, supplement, waiver or other action
shall become effective on receipt by the Trustee of written consents from the
holders of Debt Securities of the requisite percentage in aggregate principal
amount of the Outstanding Debt Securities of the relevant series. After an
amendment, supplement, waiver or other action becomes effective, it shall bind
every holder of Debt Securities of each series of Debt Securities so affected.
The Company or the Trustee, as applicable, may set a date for the purpose
of determining the holders of Debt Securities entitled to consent, vote or take
any other action referred to in this Section 8.1, which date shall be not less
than 10 days nor more than 60 days prior to the taking of the consent, vote or
other action.
ARTICLE IX
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 9.1. Immunity of incorporators, stockholders, officers, directors
and employees. No recourse shall be had for the payment of the principal of,
premium, if any, or interest on any series of Debt Securities or for any claim
based thereon or otherwise in any manner in respect thereof, or in respect of
this Indenture, to or against any subsidiary, incorporator, stockholder,
officer, director or employee, as such, past, present or future, of the Company
or any subsidiary, incorporator, stockholder, officer, director or employee, as
such, past, present or future, of any predecessor or successor corporation,
partnership or limited liability company either directly or through the Company
or such predecessor or successor corporation, partnership or limited liability
company, whether by virtue of any constitutional provision or statute or rule of
law, or by the enforcement of any assessment or penalty, or in any other manner,
all such liability being expressly waived and released by the acceptance of any
series of Debt Securities and as part of the consideration for the issue
thereof.
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ARTICLE X
MERGER, CONSOLIDATION, SALE OR LEASE
SECTION 10.1. Documents required to be filed with the Trustee upon
consolidation, merger, sale, transfer or lease - execution of supplemental
indentures - acts of successor corporation. Nothing in this Indenture or in the
Debt Securities shall prevent any consolidation or merger of the Company or the
Guarantors with or into any other corporation, partnership or limited liability
company, or any consolidation or merger of any other corporation, partnership or
limited liability company with or into the Company or any Guarantor, or any
sale, transfer or lease of all or substantially all of the property and assets
of the Company or any Guarantor to any other corporation, partnership or limited
liability company lawfully entitled to acquire the same; provided, however, and
the Company and the Guarantors hereby covenant and agree, that any consolidation
or merger of the Company or the Guarantors with or into any other corporation,
partnership or limited liability company or the sale, transfer or lease of all
or substantially all of the property and assets of the Company and its
subsidiaries on a consolidated basis shall be upon the condition that (a) the
due and punctual payment of the principal of, premium, if any, and interest on
all the Debt Securities according to their tenor, and the due and punctual
performance and observance of all the terms, covenants and conditions of this
Indenture to be kept or performed by the Company and the Guarantors shall, by an
indenture supplemental hereto complying with the provisions of Section 12.1,
executed and delivered to the Trustee, be expressly assumed by the corporation,
partnership or limited liability company (other than the Company or the
Guarantors) formed by or resulting from any such consolidation or merger, or
which shall have received the transfer or lease of all or substantially all of
the property and assets of the Company and its subsidiaries on a consolidated
basis, just as fully and effectually as if such successor corporation,
partnership or limited liability company had been an original party hereto; and
(b) the Company, the Guarantor or such successor corporation, partnership or
limited liability company, as the case may be, shall not, immediately after such
consolidation, merger, sale, transfer or lease be in default in the performance
of any such covenant or condition. Thereafter, unless otherwise specified
pursuant to Section 2.2 for the Debt Securities of any series, all obligations
of the predecessor corporation, partnership or limited liability company under
the Debt Securities of such series shall terminate. In the event of any such
sale, transfer or lease, the predecessor Company or the Guarantor may be
dissolved, wound up and liquidated at any time thereafter.
Every such successor corporation, partnership or limited liability company,
upon executing an indenture supplemental hereto as provided in this Section 10.1
in form satisfactory to the Trustee, shall succeed to and be substituted for the
Company and the Guarantors, as the case may be, with the same effect as if it
had been named herein as the Company and the Guarantors; and any order,
certificate or resolution of the Board or officers of the Company or the a
Guarantor provided for in this Indenture may be made by like officials of such
successor corporation, partnership or limited liability company. Such successor
corporation, partnership or limited liability company may thereupon cause to be
signed, either in its own name or in the name of the Company or the Guarantors,
with such
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suitable reference, if any, to such consolidation, merger, sale, transfer
or lease as may be required by the Trustee, any or all of the Debt Securities or
Guarantees which shall not theretofore have been signed by the Company or the
Guarantors and authenticated by the Trustee or any Authenticating Agent; and
upon the written order of such successor corporation, partnership or limited
liability company in lieu of the Company or any Guarantor, as the case may be,
signed by the President or any Vice President (regardless of Vice Presidential
designation) and the Chief Financial Officer, Treasurer or any Assistant
Treasurer of such successor corporation, partnership or limited liability
company, and subject to all the terms, conditions and restrictions herein
prescribed with respect to the authentication and delivery of the Debt
Securities and Guarantees, the Trustee or any Authenticating Agent shall
authenticate and deliver any and all Debt Securities and Guarantees which shall
have been previously signed by the proper officers of the Company and the
Guarantors and delivered to the Trustee or any Authenticating Agent for
authentication and any of such Debt Securities and Guarantees which such
successor corporation, partnership or limited liability company shall
thereafter, in accordance with the provisions of this Indenture, cause to be
signed and delivered to the Trustee or any Authenticating Agent for such
purpose. All Debt Securities of any series so authenticated and delivered shall
in all respects have the same rank as the Debt Securities of such series
theretofore or thereafter authenticated and delivered in accordance with the
terms of this Indenture.
Notwithstanding the foregoing, this Section 10.1 shall not apply in the
event, and to the extent, that any such consolidation, merger, sale, transfer or
lease described above is expressly permitted pursuant to the terms of any
supplemental indenture governing any series of Debt Securities, provided that
the Company or the applicable Guarantor (as the case may be) complies with all
conditions set forth in such supplemental indenture for any such consolidation,
merger, sale, transfer or lease.
SECTION 10.2. Trustee may rely upon Opinion of Counsel. The Trustee may
receive and shall, subject to the provisions of Section 11.1 of this Indenture,
be fully protected in relying upon an Officers' Certificate and Opinion of
Counsel as conclusive evidence that any supplemental indenture executed under
the foregoing Section 10.1 complies with the foregoing conditions and provisions
of this Article X.
ARTICLE XI
CONCERNING THE TRUSTEE
SECTION 11.1. Acceptance of Trust - responsibilities of Trustee. (a) The
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this Indenture
or in the Trust Indenture Act of 1939, and no implied covenants or conditions
shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to the Debt Securities of a particular series has occurred
(but only during the continuance thereof), the Trustee shall exercise with
respect to the Debt
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Securities of such series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee pursuant to any provision of this Indenture, shall examine them to
determine whether they conform to the requirements of this Indenture.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(i) prior to the occurrence of an Event of Default with respect to the
Debt Securities of any series hereunder and after the curing or waiving of
all Events of Default with respect to the Debt Securities of such series
which may have occurred, the Trustee shall not be liable with respect to
the Debt Securities of such series except for the performance of such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee, but the duties and obligations of the Trustee with respect to the
Debt Securities of such series, prior to the occurrence of an Event of
Default with respect to the Debt Securities of such series and after the
curing or waiving of all Events of Default with respect to the Debt
Securities of such series which may have occurred, shall be determined
solely by the express provisions of this Indenture;
(ii) Subject to the limitations contained in subsection (a) of this
Section 11.1, prior to the occurrence of an Event of Default with respect
to the Debt Securities of any series hereunder and after the curing or
waiving of all Events of Default with respect to the Debt Securities of
such series which may have occurred, and in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed herein, upon
certificates or opinions conforming to the requirements of this Indenture;
(iii) the Trustee shall not be personally liable for any error of
judgment made in good faith by a Responsible Officer or Officers of the
Trustee unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iv) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less than a majority in
aggregate principal amount of the Debt Securities then Outstanding of any
series relating to the time, method and place of conducting any proceeding
for any remedy available
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to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Debt Securities of such
series.
(c) Subject to the limitations contained in subsections (a) and (b) of
this Section 11.1, the recitals contained herein and in the Debt Securities
(except in the Trustee's certificate of authentication) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture and to perform its obligations hereunder.
(d) Subject to the limitations contained in subsections (a) and (b) of
this Section 11.1:
(i) the Trustee may rely and shall be protected in acting or
refraining from action upon any resolution, certificate, opinion, notice,
consent, request, order, appraisal, report, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) before the Trustee acts or refrains from acting, the Trustee may
consult with counsel and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or Opinion of Counsel;
(iii) whenever in the administration of the trusts of this Indenture,
prior to an Event of Default hereunder and after the curing or waiving of
all Events of Default which may have occurred, the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such certificate shall be full
warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof;
(iv) the Trustee shall be under no obligation to exercise any of the
trusts or powers hereof at the request, order or direction of any of the
holders of Debt Securities, pursuant to the provisions of this Indenture,
unless such holders of Debt Securities shall have offered to the Trustee
reasonable indemnity against all the costs, expenses and liabilities which
might be incurred therein;
(v) the Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within
the discretion or power conferred upon it by this Indenture;
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(vi) prior to the occurrence of an Event of Default with respect to
the Debt Securities of any series hereunder and after the curing or waiving
of all Events of Default with respect to the Debt Securities of such series
which may have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, opinion, notice, consent, request, order, appraisal, report,
bond or other document or instrument concerning such series, unless
requested in writing to do so by the holders of not less than a majority in
aggregate principal amount of the Debt Securities then Outstanding of such
series; provided, however, 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
(subject to the limitations contained in subsections (a) and (b) of this
Section 11.1), 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 expense or liability as a condition to so
proceeding; and provided, further, that nothing in this subdivision (d)(vi)
shall require the Trustee to give the holders of Debt Securities any notice
other than that required by Section 11.3 hereof. The reasonable expense of
every such investigation shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand;
(vii) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder;
(viii) except for (i) a default under Sections 7.1(a) or (b) hereof, or
(ii) any other event which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not
be deemed to have notice of any default or Event of Default unless
specifically notified in writing of such event by the Company or the
holders of not less than 25% aggregate principal amount of the Debt
Securities then outstanding; as used herein, the term "actual knowledge"
means the actual fact or statement of knowing, without any duty to make any
investigation with regard thereto;
(ix) 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
(x) none of the provisions of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any personal financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that
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repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
SECTION 11.2. Trustee to be entitled to compensation - Trustee not to be
accountable for application of proceeds - moneys held by Trustee to be trust
funds. The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for services rendered by it in the execution of the
trusts hereby created, and shall also be entitled to payment of reasonable
expenses and disbursements actually made or incurred hereunder, including the
reasonable fees and expenses of counsel, accountants and of all persons not
regularly in its employ, and all taxes which may have been assessed against the
Trustee as such or any funds on deposit with the Trustee. The Company also
agrees to indemnify each of the Trustee and any predecessor Trustee for and hold
it harmless against loss, liability or expense incurred arising out of or in
connection with the acceptance or administration of this trust or performance of
its duties hereunder, including the costs and expenses of defending itself
against any claim of liability in the premises and the costs and expenses of
enforcing this Section 11.2, except to the extent that such loss, liability or
expense is incurred due to the negligence or willful misconduct of the Trustee
or predecessor Trustee. If any property other than cash shall at any time be
subject to a lien in favor of the holders of Debt Securities, the Trustee, if
and to the extent authorized by a receivership or bankruptcy court of competent
jurisdiction or by the supplemental instrument subjecting such property to such
lien, shall be entitled to make advances for the purpose of preserving such
property or of discharging tax liens or other prior liens or encumbrances
thereon. The obligations of the Company under this Section 11.2 to compensate
the Trustee and to indemnify, pay or reimburse the Trustee or any predecessor
Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the resignation or removal of the
Trustee, the termination of this Indenture, and the satisfaction and discharge
or any other termination pursuant to any Bankruptcy Law hereof. Such additional
indebtedness shall be secured by a lien prior to that of the Debt Securities of
all series with respect to which the Trustee acts as Trustee upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Debt Securities.
The Trustee shall not be accountable for the use or application by the
Company of any Debt Securities authenticated and delivered hereunder or of the
proceeds of such Debt Securities, or for the use or application of any moneys
paid over by the Trustee in accordance with any provision of this Indenture, or
for the use or application of any moneys received by any paying agent.
All moneys received by the Trustee in trust under or pursuant to any
provision of this Indenture shall constitute trust funds for the purposes for
which they were paid or were held, but need not be segregated in any manner from
any other moneys and may be deposited by the Trustee, under such conditions as
may be prescribed by law, in its general banking department, and the Trustee
shall not be liable for any interest thereon, except as otherwise agreed with
the Company.
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The parties hereto, and the holders of Debt Securities by their acceptance
of their Debt Securities, hereby agree, that when the Trustee incurs expenses
and renders services after an Event of Default occurs, such expenses and the
compensation for such services are intended by the holders of the Debt
Securities and Company to constitute expenses of administration under any
Bankruptcy Law.
SECTION 11.3. Trustee to give holders of Debt Securities notice of
default. The Trustee shall give to the holders of Debt Securities of any series
notice of the happening of all defaults with respect to the Debt Securities of
such series known to it, within 90 days after the occurrence thereof unless such
defaults shall have been cured before the giving of such notice; provided,
however, that, except in the case of a default resulting from the failure to
make any payment of principal of, premium, if any, or interest on the Debt
Securities of any series, or in the payment of any mandatory sinking fund
installment with respect to the Debt Securities of such series, the Trustee may
withhold the giving of such notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the holders of Debt Securities of such series. For
the purpose of this Section 11.3, the term "default" means any event which is,
or after notice or lapse of time or both would become, an Event of Default. Such
notice shall be given to the holders of Debt Securities of such series in the
manner and to the extent provided in subsection (c) of Section 11.10.
SECTION 11.4. Trustee acquiring conflicting interest must eliminate it or
resign. Reference is made to Section 310(b) of the Trust Indenture Act of 1939,
as amended. There shall be excluded under Section 310(b)(1) thereof this
Indenture with respect to the Debt Securities of any series other than the Debt
Securities of the first series.
SECTION 11.5. Eligibility of Trustee. There shall at all times be a
corporate Trustee under this Indenture which shall be a bank or trust company
organized and doing business under the laws of the United States or of any State
or the District of Columbia and having a combined capital and surplus of not
less than $50,000,000 which is authorized under the laws of its jurisdiction of
incorporation to exercise corporate trust powers and is subject to supervision
or examination by Federal, State or District of Columbia authority and which has
an office or agency in New York, New York. If the Trustee publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, the combined capital of the
Trustee shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If the Trustee shall at any
time cease to meet the foregoing standards of eligibility, then such Trustee
shall resign immediately in the manner and with the effect specified in Section
11.6.
SECTION 11.6. Resignation or removal of Trustee. (a) Subject to the
limitations contained in subsection (d) of this Section 11.6, the Trustee may
resign and be discharged from the trust hereby created with respect to the Debt
Securities of one or more series by giving notice thereof to the Company and by
giving notice thereof to the holders of Debt Securities of such series, in the
manner and to the extent provided in subsection (c) of Section
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11.10. Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee or trustees (it being understood that any such
successor trustee may be appointed with respect to the Debt Securities of one or
more or all of such series with respect to which the resigning trustee has
resigned and that at any time there shall be only one trustee with respect to
the Debt Securities of any particular series) by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 60 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any holder of Debt
Securities of such series who has been a bona fide holder of a Debt Security or
Debt Securities of such series for at least six months may on behalf of himself
and all others similarly situated, petition any such court for the appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section
11.4 with respect to the Debt Securities of any series after written
request therefor by the Company or by any holder of Debt Securities of such
series who has been a bona fide holder of a Debt Security or Debt
Securities of such series for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 11.5 with respect to the Debt Securities of any
series and shall fail to resign after written request therefor by the
Company or by any such holder of Debt Securities; 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
then, in any such case, the Company may remove the Trustee with respect to all
Debt Securities of such series and appoint a duly qualified successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors of
the Company, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee so appointed, or, subject to the
provisions of Section 7.7, any holder of Debt Securities who has been a bona
fide holder of a Debt Security or Debt Securities of such series 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 with respect
to all Debt Securities of such series 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 duly qualified successor
trustee with respect to the Debt Securities of such series.
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(c) The holders of a majority in aggregate principal amount of the Debt
Securities then Outstanding of any series may at any time remove the Trustee and
appoint a duly qualified successor trustee with respect to such series by
delivery to the Trustee so removed, to the successor trustee and to the Company
of the evidence provided for in Section 8.1 of the action in that regard taken
by holders of Debt Securities.
(d) Any resignation or removal of the Trustee and any appointment of a
duly qualified successor trustee pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 11.7.
SECTION 11.7. Acceptance by successor Trustee.
(a) In case of the appointment hereunder of a successor trustee with
respect to all Debt Securities, every duly qualified successor trustee so
appointed under any of the methods herein provided shall execute, acknowledge
and deliver to its predecessor trustee and to the Company an instrument in
writing accepting such appointment hereunder and thereupon such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with the rights, powers, trusts, duties and obligations of its predecessor in
the trust hereunder with like effect as if originally named as Trustee herein.
The predecessor trustee shall, nevertheless, at the written request of the
successor trustee, pay over to the successor trustee all moneys at the time held
by it herein; and the Company and the predecessor trustee upon payment or
provision therefor of any amounts then due the predecessor trustee pursuant to
the provisions of Section 11.2, shall execute and deliver such instruments and
do such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers, trusts,
duties and obligations. The Company shall promptly give notice of the
appointment of such successor trustee to the holders of Debt Securities in the
manner and to the extent provided in subsection (c) of Section 11.10.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the predecessor trustee and each successor trustee with respect to the Debt
Securities of such series shall execute and deliver an indenture supplemental
hereto wherein each successor trustee shall accept such appointment and which
(i) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor trustee all the rights, powers,
trusts and duties of the predecessor trustee with respect to the Debt Securities
of such series to which the appointment of such successor trustee relates, (ii)
if the predecessor trustee is not retiring with respect to all Debt Securities
of such series, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor trustee with respect to the Debt Securities of such series as to
which the predecessor trustee is not retiring shall continue to be vested in the
predecessor trustee, and (iii) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any
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other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the predecessor trustee shall become
effective to the extent provided therein and each such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the predecessor trustee with respect to the
Debt Securities of such series to which the appointment of such successor
trustee relates; but, on request of the Company or any successor trustee, such
predecessor trustee upon payment of its charges shall duly assign, transfer and
deliver to such successor trustee all property and money held by such
predecessor trustee hereunder with respect to the Debt Securities of such series
to which the appointment of such successor trustee relates. 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, powers and trusts referred to in this subsection (b) of this
Section.
SECTION 11.8. Successor to Trustee by merger or consolidation, etc. Any
corporation or national banking association into which the Trustee may be
merged, or with which it may be consolidated, or to which the Trustee transfers
all or substantially all of its corporate trust assets, or any corporation or
national banking association resulting from any merger or consolidation or
conversion to which the Trustee shall be a party, shall be the successor trustee
under this Indenture without the execution or filing of any instruments or any
further act on the part of any of the parties hereto.
In case at the time such successor trustee shall succeed to the trusts
created by this Indenture any of the Debt Securities shall have been
authenticated but not delivered, any such successor trustee may adopt the
certificate of authentication of its predecessor trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt Securities
shall not have been authenticated, any successor trustee may authenticate such
Debt Securities either in the name of any predecessor hereunder or in the name
of the successor trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debt Securities or in this Indenture
provided that the certificate of authentication of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of
any predecessor trustee or authenticate Debt Securities in the name of any
predecessor trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 11.9. Limitations on right of Trustee as a creditor to obtain
payment of certain claims. Reference is made to Section 311 of the Trust
Indenture Act of 1939, as amended, for purposes of which the following terms
shall have the following meanings:
(i) the term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand; and
(ii) the term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing,
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manufacturing, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds
arising from the sale of the goods, wares, or merchandise previously
constituting the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with the
Company arising from the making, drawing, negotiating or incurring of the
draft, bill of exchange, acceptance or obligation.
SECTION 11.10. Trustee to make annual report to holders of Debt
Securities -Trustee to make other reports to holders of Debt Securities -
holders of Debt Securities to whom reports to be transmitted. (a) The Trustee
shall, so long as any Debt Securities are Outstanding of any series with respect
to which it acts as Trustee, transmit to the holders of Debt Securities of such
series, any report which is required to be transmitted to the holders of Debt
Securities of such series pursuant to Section 313(a) of the Trust Indenture Act
of 1939, as amended.
(b) The Trustee shall, so long as any Debt Securities of any series with
respect to which it acts as Trustee shall be Outstanding, also transmit to the
holders of Debt Securities of such series, as hereinafter provided, within the
times hereinafter specified, a brief report with respect to the character and
amount of any advances (and if the Trustee elects so to state the circumstances
surrounding the making thereof) made by the Trustee, as such, since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section 11.10 (or if no such report has been so transmitted, since the date of
the execution of this Indenture), for the reimbursement of which it claims or
may claim a lien or charge prior to that of the Debt Securities of such series,
on property or funds held or collected by the Trustee, as such, and which it has
not previously reported pursuant to this subsection (b), if such advances
remaining unpaid at any time aggregate more than 10% of the principal amount of
the Debt Securities of such series then Outstanding, such report to be so
transmitted within 90 days after such time.
(c) All reports required by this Section 11.10, and all other reports or
notices which are required by any other provision of this Indenture to be
transmitted in accordance with the provisions of this Section 11.10, shall be
transmitted by mail: (i) to all registered holders of Debt Securities of such
series, as the names and addresses of such holders appear upon the Debt Security
register; (ii) to such holders of Debt Securities of such series as have, within
the two years preceding such transmission, filed their names and addresses with
the Trustee for that purpose; and (iii) except in the case of reports pursuant
to subsection (b) of this Section 11.10, to all holders of Debt Securities of
such series whose names and addresses have been furnished to or received by the
Trustee pursuant to Section 4.6(d).
(d) The Trustee shall, at the time of the transmission to the holders of
Debt Securities of any report or notice pursuant to this Section 11.10, file a
copy thereof with the Securities and Exchange commission. The Company will
notify the Trustee if and when the Debt
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Securities of any series become listed on any stock exchange and the Trustee
will thereafter file a copy of any such report or notice with such stock
exchange.
SECTION 11.11. Preservation of information by Trustee - Trustee to give
certain information to holders of Debt Securities upon application. The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information furnished it pursuant to Section 4.6(d) hereof or received by it as
Debt Security registrar hereunder. The Trustee may destroy such information
upon receipt of new information updating information previously furnished.
Within five Business Days after receipt by the Trustee or its designee of a
written application by any three or more holders of Debt Securities stating that
the applicants desire to communicate with other holders of Debt Securities with
respect to their rights under this Indenture or under the Debt Securities, and
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, and by reasonable proof that each such applicant
has owned a Debt Security or Debt Securities for a period of at least six months
preceding such application, the Trustee or its designee shall, at its election,
either (a) afford to such applicants access to all information so furnished to
or received by the Trustee or its designee and not destroyed pursuant to the
provisions of this Section 11.11, or (b) inform such applicants as to the
approximate number of holders of Debt Securities according to the most recent
information so furnished to or received by the Trustee or its designee, and as
to the approximate cost of mailing to the holders of Debt Securities the form of
proxy or other communication, if any, specified in such application. If the
Trustee or its designee shall elect not to afford to such applicants access to
such information, the Trustee or its designee shall, upon the written request of
such applicants, mail to all holders of Debt Securities whose names and
addresses are contained in the then current information filed with the Trustee
or its designee as aforesaid copies of the form of proxy or other communication
which is specified in such request, with reasonable promptness after a tender to
the Trustee or its designee of the material to be mailed and the payment, or
provision for the payment, of the reasonable expenses of such mailing, unless
within five Business Days after such tender, the Trustee or its designee shall
mail to such applicants, and file with the Securities and Exchange Commission,
together with a copy of the material to be mailed, a written statement to the
effect that, in the opinion of the Trustee or its designee, such mailing would
be contrary to the best interests of the holders of Debt Securities or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Securities and Exchange Commission, after granting
opportunity for a hearing upon the objections specified in said written
statement and on notice to the Trustee or its designee, shall enter an order
refusing to sustain any of such objections, or, if, after the entry of an order
sustaining one or more of such objections, the Securities and Exchange
Commission shall find, after notice and opportunity for a hearing, that all
objections sustained have been met and shall enter an order so declaring, the
Trustee or its designee shall mail copies of such material to all such holders
of Debt Securities with reasonable promptness after such determination and the
renewal of the aforesaid tender; otherwise the Trustee or its designee shall be
relieved of any obligation or duty to such applicants respecting their
application.
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Neither the Company, the Trustee or its designee nor any person acting as
Debt Security registrar or paying agent shall be liable or accountable to the
Company or to any holder of Debt Securities by reason of the disclosure of any
such information as to the names and addresses of holders of Debt Securities in
accordance with the provisions of this Section 11.11, regardless of the source
from which such information was derived, nor by reason of the mailing of any
material pursuant to a request made under this Section 11.11.
SECTION 11.12. Trustee may hold Debt Securities and otherwise deal with
Company. The Trustee, the Debt Security registrar, any paying agent or any
other agent of the Company in its individual or any other capacity may buy, own,
hold and sell any of the Debt Securities or any other evidences of indebtedness
or other securities, whether heretofore or hereafter created or issued, of the
Company or any subsidiary or Affiliate with the same rights it would have if it
were not Trustee, Debt Security registrar, paying agent or such other agent; and
subject to the provisions of this Article XI, the Trustee may engage or be
interested in any financial or other transaction with the Company or any
subsidiary or Affiliate, including, without limitation, secured and unsecured
loans to the Company or any subsidiary or Affiliate; and may maintain any and
all other general banking and business relations with the Company and any
subsidiary or Affiliate with like effect and in the same manner and to the same
extent as if the Trustee were not a party to this Indenture; and no implied
covenant shall be read into this Indenture against the Trustee in respect of any
such matters.
SECTION 11.13. Trustee may comply with any rule, regulation or order of
the Securities and Exchange Commission. The Trustee may comply in good faith
with any rule, regulation or order of the Securities and Exchange Commission
made pursuant to the terms and provisions of the Trust Indenture Act of 1939 and
shall be fully protected in so doing notwithstanding that such rule, regulation
or order may thereafter be amended or rescinded or determined by judicial or
other authority to be invalid for any reason, but nothing herein contained shall
require the Trustee to take any action or omit to take any action in accordance
with such rule, regulation or order, except as is in this Indenture otherwise
required.
SECTION 11.14. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Debt Securities which shall be authorized to act on behalf of the Trustee to
authenticate Debt Securities of such series issued upon exchange, registration
of transfer or partial redemption or partial conversion thereof, and if the
Trustee is required to appoint one or more Authenticating Agents with respect to
any series of Debt Securities, to authenticate Debt Securities of such series
and to take such other actions as are specified in Sections 2.4, 2.8, 2.11, 5.2
and 13.3, and Debt Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Debt Securities by the Trustee
or the Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent (except in respect of original issue and
Section 2.9). Each Authenticating Agent shall be acceptable to the Company and
shall at all times be a corporation organized and doing
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business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $1,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section 11.14, the combined capital and surplus of such
Authenticating Agent 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 an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 11.14, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 11.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 11.14, without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
or resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 11.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall provide
notice to the holders of the Debt Securities of the series as to which the
Authenticating Agent will serve as provided in Section 3.9. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 11.14.
The Trustee agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 11.2.
If an appointment with respect to one or more series is made pursuant to
this Section 11.14, the Debt Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
Harris Trust and Savings Bank, as Trustee
By: __________________________________
As Authenticating Agent
By: __________________________________
Authorized Officer
If all of the Debt Securities of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Debt Securities upon original issuance located where the Company wishes to have
Debt Securities of such series authenticated upon original issuance, the
Trustee, if so requested by the Company in writing (which writing need not
comply with Section 3.8 and need not be accompanied by an Opinion of Counsel),
shall appoint in accordance with this Section 11.14 an Authenticating Agent
having an office in a place designated by the Company with respect to such
series of Debt Securities.
ARTICLE XII
SUPPLEMENTAL INDENTURES
SECTION 12.1. Company and Trustee may enter into supplemental indenture
for special purposes. Without the consent of any of the holders of Debt
Securities, the Company, when authorized by resolution of its Board of
Directors, and, upon receipt of an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture, is
duly authorized by all necessary corporate action, constitutes the legal, valid
and binding obligation of the Company and is in compliance with applicable law,
the Trustee from time to time and at any time, subject to the conditions and
restrictions in this Indenture contained, may enter into an indenture or
indentures supplemental hereto in form satisfactory to the Trustee, which
thereafter shall form a part hereof, for any one or more of the following
purposes:
(a) to add to the covenants and agreements of the Company and the
Guarantors in this Indenture contained, other covenants and agreements
thereafter to be observed for the benefit of the holders of all or any
series of Debt Securities (and if such covenants and agreements are to be
for the benefit of less than all series of Debt Securities, stating that
such covenants and agreements are expressly being included
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solely for the benefit of such series) or to surrender any right or power
herein reserved to or conferred upon the Company or the Guarantors; or
(b) to cure any ambiguity or to cure, correct or supplement any defect
or inconsistent provision contained in this Indenture or in any
supplemental indenture; or
(c) to make such provisions in regard to matters or questions arising
under this Indenture which may be necessary or desirable, or otherwise
change this Indenture in any manner which shall not adversely affect the
interests of the holders of Debt Securities of any series; or
(d) to evidence the succession of another corporation to the Company
or any Guarantor, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of the
Company or any Guarantor pursuant to Article X and to provide for the
adjustment of conversion rights pursuant to Section 13.7; or
(e) to establish the form or terms of the Debt Securities of any
series as permitted by Sections 2.1 and 2.2; or
(f) to change or eliminate any of the provisions of this Indenture,
provided that, except as otherwise contemplated by Section 2.2(11), any
such change or elimination shall become effective only when there is no
Debt Security outstanding of any series created prior thereto which is
entitled to the benefit of such provision; or
(g) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Debt
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to provide for uncertificated Debt
Securities in addition to certificated Debt Securities (so long as any
"registration-required obligation" within the meaning of Section 163(f)(2)
of the Code is in registered form for purposes of the Code); or
(h) to amend or supplement any provision contained herein, which was
required to be contained herein in order for this Indenture to be qualified
under the Trust Indenture Act of 1939, if the Trust Indenture Act of 1939
or regulations thereunder change what is so required to be included in
qualified indentures, in any manner not inconsistent with what then may be
required for such qualification; or
(i) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series of Debt Securities,
stating that such Events of Default are expressly being included solely to
be applicable to such series); or
(j) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Debt Securities of one or more series any property or
assets; or
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(k) to add a Guarantor; or
(l) to add to or change any of the provisions of this Indenture as
contemplated in Section 11.7(b);
and the Company hereby covenants that it will fully perform all the requirements
of any such supplemental indenture which may be in effect from time to time.
Nothing in this Article XII contained shall affect or limit the right or
obligation of the Company to execute and deliver to the Trustee any instrument
of further assurance or other instrument which elsewhere in this Indenture it is
provided shall be delivered to the Trustee.
The Trustee shall join with the Company in the execution of any such
supplemental indenture, make any further appropriate agreements and stipulations
which may be therein contained and accept the conveyance, transfer, assignment,
mortgage or pledge of any property thereunder, but the Trustee shall not be
obligated to enter into any such supplemental indenture which adversely affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section
12.1 may be executed by the Company, the Guarantors and the Trustee without the
consent of the holders of any of the Debt Securities at the time Outstanding,
notwithstanding any of the provisions of Section 12.2.
SECTION 12.2. Modification of Indenture with consent of holders of Debt
Securities. With the consent (evidenced as provided in Section 8.1) of the
holders of more than 50% in aggregate principal amount of the Debt Securities at
the time Outstanding of each series affected by such supplement, the Company and
the Guarantors, when authorized by a resolution of each of their respective
Board of Directors, and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provision to or changing in any manner or eliminating any of the provisions
of this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of such series of the Debt Securities; provided,
however, that no such supplemental indenture shall (i) extend the time or times
of payment of the principal of, premium, if any, or the interest on, any series
of Debt Securities, or reduce the principal amount of, premium, if any, or the
rate of interest on, any series of Debt Securities (and/or such other amount or
amounts as any Debt Securities or supplemental indentures with respect thereto
may provide to be due and payable upon declaration of acceleration of the
maturity thereof pursuant to Section 7.1) or change the currency of payment of
principal of, premium, if any, or interest on, any series of Debt Securities or
reduce any amount payable on redemption thereof or alter or impair the right to
convert the same at the rate and upon the terms provided in the Indenture or
alter or impair the right to require redemption at the option of the holder,
without the consent of the holder of each Debt Security so affected, or (ii)
reduce the percentage of Debt Securities of any series, the vote or consent of
the holders of which is required for such modifications and alterations, without
the consent of the holders of all Debt Securities then Outstanding of such
series under the Indenture. Notwithstanding the
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foregoing, no consent of the holders of Debt Securities shall be necessary to
permit the execution of supplemental indentures pursuant to Section 13.7.
Upon the request of the Company, accompanied by a copy of a resolution of
its Board of Directors certified by the Secretary or an Assistant Secretary of
the Company authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of holders of Debt
Securities as aforesaid, the Trustee shall join with the Company and the
Guarantors, as the case may be, in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may, in
its discretion, but shall not be obligated, to enter into such supplemental
indenture.
It shall not be necessary for the consent of the holders of Debt Securities
under this Section 12.2 to approve the particular form of any proposed
supplemental indenture, but is shall be sufficient if such consent shall approve
the substance thereof.
A supplemental indenture which changes or eliminates any provision of this
Indenture which has expressly been included solely for the benefit of one or
more particular series of Debt Securities, or which modifies the rights of the
holders of Debt Securities of such series with respect to such provision, shall
be deemed not to affect the rights under this Indenture of the holders of Debt
Securities of any other series.
SECTION 12.3. Effect of supplemental indentures. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article XII, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company, the Guarantors
and the holders of Debt Securities shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
The Trustee, subject to the provisions of Section 11.1, may receive an
Opinion of Counsel as conclusive evidence that any such supplemental indenture
complies with the provisions of this Article XII.
SECTION 12.4. Supplemental indentures to conform to Trust Indenture Act.
Any supplemental indenture executed and delivered pursuant to the provisions of
this Article XII shall conform in all respects to the requirements of the Trust
Indenture Act of 1939 as then in effect.
SECTION 12.5. Notation on or exchange of Debt Securities. If an amendment,
supplement or waiver changes the terms of a Debt Security of any series, the
Trustee may require the holder of the Debt Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Debt Security
about the changed terms and return it to the holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the
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Debt Security of any series shall issue and the Trustee shall authenticate a new
Debt Security of such series that reflects the changed terms.
ARTICLE XIII
CONVERSION OF DEBT SECURITIES
SECTION 13.1. Applicability of Article. Debt Securities of any series
which are convertible into Capital Stock at the option of the holder of Debt
Securities shall be convertible in accordance with their terms and (unless
otherwise specified as contemplated by Section 2.2 for Debt Securities of any
series) in accordance with this Article. Each reference in this Article XIII to
"a Debt Security" or "the Debt Securities" refers to the Debt Securities of the
particular series that is convertible into Capital Stock. Each reference in
this Article to "Capital Stock" into which Debt Securities of any series are
convertible refers to the class of Capital Stock into which the Debt Securities
of such series are convertible in accordance with their terms (as specified as
contemplated by Section 2.2). If more than one series of Debt Securities with
conversion privileges are outstanding at any time, the provisions of this
Article XIII shall be applied separately to each such series.
SECTION 13.2. Right of holders of Debt Securities to convert Debt
Securities. Subject to and upon compliance with the terms of the Debt
Securities and the provisions of Section 5.7 and this Article XIII, at the
option of the holder thereof, any series of Debt Securities of any series of any
authorized denomination, or any portion of the principal amount thereof which is
$1,000 or any integral multiple of $1,000, may, at any time during the period
specified in the Debt Securities of such series, or in case such Debt Security
or portion thereof shall have been called for redemption, then in respect of
such Debt Security or portion thereof until and including, but not after (unless
the Company shall default in payment due upon the redemption thereof) the close
of business on the date fixed for redemption except that in the case of
redemption at the option of the holder of Debt Securities, if specified in the
terms of such Debt Securities, such right shall terminate upon receipt of
written notice of the exercise of such option, be converted into duly
authorized, validly issued, fully paid and nonassessable shares of the class of
Preferred Stock or Class A Common Stock, or combination thereof, as specified in
such Debt Security, at the conversion rate for each $1,000 principal amount of
Debt Securities (such initial conversion rate reflecting an initial conversion
price specified in such Debt Security) in effect on the conversion date, or, in
case an adjustment in the conversion rate has taken place pursuant to the
provisions of Section 13.5, then at the applicable conversion rate as so
adjusted, upon surrender of the Debt Security or Debt Securities, the principal
amount of which is so to be converted, to the Company at any time during usual
business hours at the office or agency to be maintained by it in accordance with
the provisions of Section 4.2, accompanied by a written notice of election to
convert as provided in Section 13.3 and, if so required by the Company and the
Trustee, by a written instrument or instruments of transfer in form satisfactory
to the Company and the Trustee duly executed by the registered holder or his
attorney duly authorized in writing. All Debt Securities surrendered for
conversion shall, if surrendered to
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the Company or any conversion agent, be delivered to the Trustee for
cancellation and cancelled by it, or shall, if surrendered to the Trustee, be
cancelled by it, as provided in Section 2.11.
The initial conversion price or conversion rate in respect of a series of
Debt Securities shall be as specified in the Debt Securities of such series.
The conversion price or conversion rate will be subject to adjustment on the
terms set forth in Section 13.5 or such other or different terms, if any, as may
be specified by Section 2.2 for Debt Securities of such series. Provisions of
this Indenture that apply to conversion of all of a Debt Security also apply to
conversion of a portion of it.
SECTION 13.3. Issuance of shares of Capital Stock on conversion. As
promptly as practicable after the surrender, as herein provided, of any series
of Debt Securities or Debt Securities for conversion, the Company shall deliver
or cause to be delivered at its said office or agency to or upon the written
order of the holder of the Debt Security or Debt Securities so surrendered a
certificate or certificates representing the number of duly authorized, validly
issued, fully paid and nonassessable shares of Capital Stock into which such
Debt Security or Debt Securities may be converted in accordance with the terms
thereof and the provisions of this Article XIII. Prior to delivery of such
certificate or certificates, the Company shall require a written notice at its
said office or agency from the holder of the Debt Security or Debt Securities so
surrendered stating that the holder irrevocably elects to convert such Debt
Security or Debt Securities, or, if less than the entire principal amount
thereof is to be converted, stating the portion thereof to be converted. Such
notice shall also state the name or names (with address and social security or
other taxpayer identification number) in which said certificate or certificates
are to be issued. Such conversion shall be deemed to have been made at the time
that such Debt Security or Debt Securities shall have been surrendered for
conversion and such notice shall have been received by the Company or the
Trustee, the rights of the holder of such Debt Security or Debt Securities as a
holder of Debt Securities shall cease at such time, the person or persons
entitled to receive the shares of Capital Stock upon conversion of such Debt
Security or Debt Securities shall be treated for all purposes as having become
the record holder or holders of such shares of Capital Stock at such time and
such conversion shall be at the conversion rate in effect at such time. In the
case of any series of Debt Securities of any series which is converted in part
only, upon such conversion, the Company shall execute and the Trustee or an
Authenticating Agent shall authenticate and deliver to the holder thereof, as
requested by such holder, a new Debt Security or Debt Securities of such series
of authorized denominations in aggregate principal amount equal to the
unconverted portion of such Debt Security.
If the last day on which a Debt Security may be converted is not a Business
Day in a place where a conversion agent is located, the Debt Security may be
surrendered to that conversion agent on the next succeeding day that is a
Business Day.
The Company will not be required to deliver certificates for shares of
Capital Stock upon conversion while its stock transfer books are closed for a
meeting of stockholders or for
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the payment of dividends or for any other purpose, but certificates for shares
of Capital Stock shall be delivered as soon as the stock transfer books shall
again be opened.
SECTION 13.4. No payment or adjustment for interest or dividends. Unless
otherwise specified as contemplated by Section 2.2 for Debt Securities of such
series, Debt Securities surrendered for conversion during the period from the
close of business on any regular record date (or special record date for payment
of defaulted interest) next preceding any interest payment date to the opening
of business on such interest payment date (except Debt Securities called for
redemption on a redemption date within such period) when surrendered for
conversion must be accompanied by payment of an amount equal to the interest
thereon which the registered holder is to receive on such interest payment date.
Payment of interest shall be made, as of such interest payment date or such
date, as the case may be, to the holder of record of the Debt Securities as of
such regular, or special record date, as applicable. Except where Debt
Securities surrendered for conversion must be accompanied by payment as
described above, no interest on converted Debt Securities will be payable by the
Company on any interest payment date subsequent to the date of conversion. No
other payment or adjustment for interest or dividends is to be made upon
conversion. Notwithstanding the foregoing, upon conversion of any series of
Debt Securities with original issue discount, the fixed number of shares of
Capital Stock into which such Debt Security is convertible delivered by the
Company to the holder thereof shall be applied, first, to pay the accrued
original issue discount attributable to the period from the date of issuance to
the date of conversion of such Debt Security, and, second, to pay the balance of
the principal amount of such Debt Security.
SECTION 13.5. Adjustment of conversion rate. Unless otherwise specified as
contemplated by Section 2.2 for Debt Securities of such series, the conversion
rate for Debt Securities in effect at any time shall be subject to adjustment as
follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on the class of Capital Stock into which Debt Securities of
such series are convertible in shares of its Capital Stock, (ii) subdivide
the outstanding shares of the class of Capital Stock into which Debt
Securities of such series are convertible into a greater number of shares,
(iii) combine the outstanding shares of the class of Capital Stock into
which Debt Securities of such series are convertible into a smaller number
of shares, or (iv) issue by reclassification of the shares of the class of
Capital Stock into which Debt Securities of such series are convertible
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation) any shares, the
conversion rate for the Debt Securities of such series in effect at the
time of the record date for such dividend or distribution, or the effective
date of such subdivision, combination or reclassification, shall be
proportionately adjusted so that the holder of any series of Debt
Securities of such series surrendered for conversion after such time shall
be entitled to receive the number and kind of shares which he would have
owned or have been entitled to receive had such Debt Security been
converted immediately prior to such time. Similar adjustments shall be made
whenever any event listed above shall occur.
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(b) In case the Company shall fix a record date for the issuance of
rights or warrants to all holders of the class of Capital Stock into which
Debt Securities of such series are convertible entitling them (for a period
expiring within 45 days after such record date) to subscribe for or
purchase shares of such class of Capital Stock (or securities convertible
into shares of such class of Capital Stock) at a price per share (or, in
the case of a right or warrant to purchase securities convertible into such
class of Capital Stock, having a conversion price per share, after adding
thereto the exercise price, computed on the basis of the maximum number of
shares of such class of Capital Stock issuable upon conversion of such
convertible securities, per share of such class of Capital Stock, so
issuable) less than the current market price per share of such class of
Capital Stock (as defined in subsection (d) below) on the date on which
such issuance was declared or otherwise announced by the Company (the
"Determination Date"), the number of shares of such class of Capital Stock
into which each $1,000 principal amount of Debt Securities shall be
convertible after such record date shall be determined by multiplying the
number of shares of such class of Capital Stock into which such principal
amount of Debt Securities was convertible immediately prior to such record
date by a fraction, of which the numerator shall be the number of shares of
such class of Capital Stock outstanding on the Determination Date plus the
number of additional shares of such class of Capital Stock offered for
subscription or purchase (or in the case of a right or warrant to purchase
securities convertible into such class of Capital Stock, the aggregate
number of additional shares of such class of Capital Stock into which the
convertible securities so offered are initially convertible), and of which
the denominator shall be the number of shares of such class of Capital
Stock outstanding on the Determination Date plus the number of shares of
such class of Capital Stock obtained by dividing the aggregate offering
price of the total number of shares so offered (or, in the case of a right
or warrant to purchase securities convertible into such class of Capital
Stock, the aggregate initial conversion price of the convertible securities
so offered, after adding thereto the aggregate exercise price of such
rights or warrants computed on the basis of the maximum number of shares of
such class of Capital Stock issuable upon conversion of such convertible
securities) by such current market price. Shares of such class of Capital
Stock of the Company owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed;
and to the extent that shares of such class of Capital Stock are not
delivered (or securities convertible into shares of such class of Capital
Stock are not delivered) after the expiration of such rights or warrants
(or, in the case of rights or warrants to purchase securities convertible
into such class of Capital Stock once exercised, the expiration of the
conversion right of such securities) the conversion rate shall be
readjusted to the conversion rate which would then be in effect had the
adjustments made upon the issuance of such rights or warrants (or
securities convertible into shares) been made upon the basis of delivery of
only the number of shares actually delivered. In the event that such rights
or warrants are not so issued, the conversion rate shall again be adjusted
to the conversion rate which would then be in effect if such record date
had not been fixed.
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(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the class of Capital Stock into which Debt
Securities of such series are convertible (including any such distribution
made in connection with a consolidation or merger in which the Company is
the continuing corporation) of evidences of its indebtedness or assets
(excluding any cash dividends paid from retained earnings and dividends
payable in Capital Stock for which adjustment is made pursuant to
subsection (a) above) or subscription rights or warrants (excluding
subscription rights or warrants to purchase the class of Capital Stock into
which Debt Securities of such series are convertible), the number of shares
of such class of Capital Stock into which each $1,000 principal amount of
Debt Securities of such series shall be convertible after such record date
shall be determined by multiplying the number of shares of such class of
Capital Stock into which such principal amount of Debt Securities was
convertible immediately prior to such record date by a fraction, of which
the numerator shall be the fair market value of the assets of the Company,
after deducting therefrom all liabilities of the Company and all
preferences (including accrued but unpaid dividends) in respect of classes
of Capital Stock having a preference with respect to the assets of the
Company over such class of Capital Stock (all as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
certificate signed by any Chairmen of the Board, President or any Vice
President (regardless of Vice Presidential designation) and the Chief
Financial Officer or Treasurer of the Company, filed with the Trustee and
each conversion agent) on such record date, and of which the denominator
shall be such fair market value after deducting therefrom such liabilities
and preferences, less the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
statement filed with the Trustee and each conversion agent) of the assets
or evidences of indebtedness, so distributed or of such subscription rights
or warrants applicable, so distributed. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the conversion rate shall again be
adjusted to the conversion rate which would then be in effect if such
record date had not been fixed.
(d) For the purpose of any computation under subsection (b) above and
Section 13.6, the current market price per share of the Capital Stock on
any date as of which such price is to be computed shall mean the average of
the Closing Prices for the 30 consecutive Business Days commencing 45
Business Days before such date.
(e) No adjustment in the conversion rate shall be required unless such
adjustment would require a cumulative increase or decrease of at least 1%
in such rate; provided, however, that any adjustments which by reason of
this subsection (e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment, and provided, further,
that adjustments shall be required and made in accordance with the
provisions of this Article XIII (other than this subsection (e)) not later
than such time as may be required in order to preserve the tax-free nature
of a distribution for United States income tax purposes to the holders of
Debt Securities or the class of Capital Stock into which such Debt
Securities are convertible. All
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calculations under this Article XIII shall be made to the nearest cent or
to the nearest one-thousandth of a share, as the case may be. Anything in
this Section 13.5 to the contrary notwithstanding, the Company shall be
entitled to make such adjustments in the conversion rate, in addition to
those required by this Section 13.5, as it in its discretion shall
determine to be advisable in order that any stock dividend, subdivision of
shares, distribution of rights to purchase stock or securities, or
distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable for
United States income tax purposes.
(f) Whenever the conversion rate is adjusted, as herein provided, the
Company shall promptly file with the Trustee and with the office or agency
maintained by the Company for the conversion of Debt Securities of such
series pursuant to Section 4.2, a certificate of a firm of independent
public accountants of recognized national standing selected by the Board of
Directors (who may be the regular accountants employed by the Company)
setting forth the conversion rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment and a computation
thereof. Such certificate shall be conclusive evidence of the correctness
of such adjustment. Neither the Trustee nor any conversion agent shall be
under any duty or responsibility with respect to any such certificate or
any facts or computations set forth therein, except to exhibit said
certificate from time to time to any holder of Debt Securities of such
series desiring to inspect the same. The Company shall promptly cause a
notice setting forth the adjusted conversion rate to be mailed to the
holders of Debt Securities of such series, as their names and addresses
appear upon the registration books of the Company.
(g) In the event that at any time, as a result of shares of any other
class of Capital Stock becoming issuable in exchange or substitution for or
in lieu of shares of the class of Capital Stock into which such Debt
Securities are convertible or as a result of an adjustment made pursuant to
subsection (a) above, the holder of any series of Debt Securities of such
series thereafter surrendered for conversion shall become entitled to
receive any shares of the Company other than shares of the class of Capital
Stock into which the Debt Securities of such series are convertible,
thereafter the number of such other shares so receivable upon conversion of
any series of Debt Securities shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the class of Capital Stock into which the Debt
Securities of such series are convertible contained in subsections (a) to
(f), inclusive, above, and the provisions of this Article XIII with respect
to the class of Capital Stock into which the Debt Securities of such series
are convertible shall apply on like terms to any such other shares.
(h) The conversion rate with respect to any Debt Securities with
original issue discount, the terms of which provide for convertibility,
shall not be adjusted during the term of such Original Issue Discount
Securities for accrued original issue discount.
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(i) In the event that the Debt Securities of any series are
convertible into more than one class of Capital Stock, the provisions of
this Section 13.5 shall apply separately to events affecting each such
class.
SECTION 13.6. No fractional shares to be issued. No fractional shares of
Capital Stock shall be issued upon conversions of Debt Securities. If more than
one Debt Security of any series shall be surrendered for conversion at one time
by the same holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of Debt Securities of such series (or specified portions thereof to the
extent permitted hereby) so surrendered. Instead of a fraction of a share of
Capital Stock which would otherwise be issuable upon conversion of any series
of Debt Securities or Debt Securities (or specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction of a share in an
amount equal to the same fractional interest of the current market price (as
defined in Section 13.5) per share of Capital Stock on the Business Day next
preceding the day of conversion.
SECTION 13.7. Preservation of conversion rights upon consolidation, merger,
sale or conveyance. In case of any consolidation of the Company with, or merger
of the Company into, any other corporation (other than a consolidation or merger
in which the Company is the continuing corporation), or in the case of any sale
or transfer of all or substantially all of the assets of the Company, the
corporation formed by such consolidation or the corporation into which the
Company shall have been merged or the corporation which shall have acquired such
assets, as the case may be, shall execute and deliver to the Trustee, a
supplemental indenture, subject to the provisions of Article X and XII as they
relate to supplemental indentures, providing that the holder of each Debt
Security then Outstanding of a series which was convertible into Capital Stock
shall have the right thereafter to convert such Debt Security into the kind and
amount of shares of stock and other securities and property, including amount of
shares of stock and other securities and property, including cash, receivable
upon such consolidation, merger, sale or transfer by a holder of the number of
shares of Capital Stock of the Company into which such Debt Securities might
have been converted immediately prior to such consolidation, merger, sale or
transfer. Such supplemental indenture shall conform to the provisions of the
Trust Indenture Act of 1939 as then in effect and shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article XIII. Neither the Trustee nor any conversion agent
shall be under any responsibility to determine the correctness of any provision
contained in any such supplemental indenture relating either to the kind or
amount of shares of stock or other securities or property receivable by holders
of Debt Securities upon the conversion of their Debt Securities after any such
consolidation, merger, sale or transfer, or to any adjustment to be made with
respect thereto and, subject to the provisions of Section 11.1, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, an Opinion of Counsel with respect thereto. If in
the case of any such consolidation, merger, sale or transfer, the stock or other
securities and property receivable by a holder of the Debt Securities includes
stock or other securities and property of a corporation other than the successor
or purchasing corporation, then such supplemental indenture shall
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also be executed by such other corporation and shall contain such additional
provisions to protect the interests of the holders of the Debt Securities as the
Board of Directors shall reasonably consider necessary. The above provisions of
this Section 13.7 shall similarly apply to successive consolidations, mergers,
sales or transfers.
SECTION 13.8. Notice to holders of Debt Securities of a series prior to
taking certain types of action. With respect to the Debt Securities of any
series, in case:
(a) the Company shall authorize the issuance to all holders of the
class of Capital Stock into which Debt Securities of such series are
convertible of rights or warrants to subscribe for or purchase shares of
its Capital Stock or of any other right:
(b) the Company shall authorize the distribution to all holders of the
class of Capital Stock into which Debt Securities of such series are
convertible of evidences of its indebtedness or assets (except for the
exclusions with respect to certain dividends set forth in Section 13.5(c));
(c) of any subdivision, combination or reclassification of the class
of Capital Stock into which Debt Securities of such series are convertible
or of any consolidation or merger to which the Company is a party and for
which approval by the stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company;
or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee and at the office or
agency maintained for the purpose of conversion of Debt Securities of such
series pursuant to Section 4.2, and shall cause to be mailed to the holders of
Debt Securities of such series, at their last addresses as they shall appear
upon the registration books of the Company, at least ten days prior to the
applicable record date hereinafter specified, a notice stating (i) the date as
of which the holders of such class of Capital Stock to be entitled to receive
any such rights, warrants or distribution are to be determined, or (ii) the date
on which any such subdivision, combination, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation, winding up or other action is
expected to become effective, and the date as of which it is expected that
holders of record of such class of Capital Stock shall be entitled to exchange
their Capital Stock of such class for securities or other property, if any,
deliverable upon such subdivision, combination, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation, winding up or other action.
The failure to give the notice required by this Section 13.8 or any defect
therein shall not affect the legality or validity of any distribution, right,
warrant, subdivision, combination, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation, winding up or other action, or the
vote upon any of the foregoing. Such notice shall also be published by and at
the expense of the Company not later than the aforesaid filing date at least
once in an Authorized Newspaper.
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SECTION 13.9. Covenant to reserve shares for issuance on conversion of Debt
Securities. The Company covenants that at all times it will reserve and keep
available out of each class of its authorized Capital Stock, free from
preemptive rights, solely for the purpose of issue upon conversion of Debt
Securities of any series as herein provided, such number of shares of Capital
Stock of such class as shall then be issuable upon the conversion of all
Outstanding Debt Securities of such series. The Company covenants that all
shares of Capital Stock which shall be so issuable shall, when issued or
delivered, be duly and validly issued shares of the class of authorized Capital
Stock into which Debt Securities of such series are convertible, and shall be
fully paid and nonassessable, free of all liens and charges and not subject to
preemptive rights and that, upon conversion, the appropriate capital stock
accounts of the Company will be duly credited.
SECTION 13.10. Compliance with governmental requirements. The Company
covenants that if any shares of Capital Stock required to be reserved for
purposes of conversion of Debt Securities hereunder require registration or
listing with or approval of any governmental authority under any Federal or
State law, pursuant to the Securities Act of 1933, as amended, or the Securities
Exchange Act, or any national or regional securities exchange on which such
Capital Stock is listed at the time of delivery of any shares of such Capital
Stock, before such shares may be issued upon conversion, the Company will use
its best efforts to cause such shares to be duly registered, listed or approved,
as the case may be.
SECTION 13.11. Payment of taxes upon certificates for shares issued upon
conversion. The issuance of certificates for shares of Capital Stock upon the
conversion of Debt Securities shall be made without charge to the converting
holders of Debt Securities for any tax (including, without limitation, all
documentary and stamp taxes) in respect of the issuance and delivery of such
certificates, and such certificates shall be issued in the respective names of,
or in such names as may be directed by, the holders of the Debt Securities
converted; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate in a name other than that of the holder of the
Debt Security converted, and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 13.12. Trustee's duties with respect to conversion provisions. The
Trustee and any conversion agent shall not at any time be under any duty or
responsibility to any holder of Debt Securities to determine whether any facts
exist which may require any adjustment of the conversion rate, or with respect
to the nature or extent of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee nor any conversion agent
shall be accountable with respect to the registration under securities laws,
listing, validity or value (or the kind or amount) of any shares of Capital
Stock, or of any other securities or property, which may at any time be issued
or delivered upon the conversion of any series of Debt Securities; and neither
the Trustee nor any conversion agent
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makes any representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or stock
certificates or other securities or property upon the surrender of any series of
Debt Securities for the purpose of conversion; and the Trustee, subject to the
provisions of Section 11.1, and any conversion agent shall not be responsible
for any failure of the Company to comply with any of the covenants of the
Company contained in this Article XIII.
ARTICLE XIV
GUARANTEES
SECTION 14.1. Guarantee. If any of the Guarantors guarantee any series of
Debt Securities, such series of Debt Securities shall be guaranteed, jointly and
severally, by each Guarantor. Subject to the provisions of this Article XIV and
the terms of a Debt Security of any series, each Guarantor hereby irrevocably
and unconditionally guarantees, jointly and severally, to each holder of Debt
Securities and the Trustee, on behalf of the holders of Debt Securities, (a) the
due and punctual payment of the principal of, premium if any, and interest on
each Debt Security, when and as the same shall become due and payable, whether
at stated maturity, acceleration, or otherwise, the due and punctual payment of
interest on the overdue principal of and interest, if any, on the Debt
Securities, to the extent lawful, and the due and punctual performance of all
other obligations of the Company to the holders of Debt Securities or the
Trustee all in accordance with the terms of such Debt Security and this
Indenture provided that this Guarantee shall not be applicable to, or guarantee
the Company's obligation with respect to the conversion of Debt Securities into
Preferred Stock or Class A Common Stock if applicable to the Debt Securities of
such series, and (b) in the case of any extension of time of payment or renewal
of any Debt Securities or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, at stated maturity, by declaration of acceleration or
otherwise (the obligations in subsections (a) and (b) hereof being the
"Guaranteed Obligations"). Without limiting the generality of the foregoing,
each Guarantor's liability shall extend to all amounts that constitute part of
the Guaranteed Obligations and would be owed by the Company to the holders of
Debt Securities, or the Trustee under the Debt Securities and this Indenture but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving the Company.
The Guarantors hereby agree that their obligations hereunder shall be absolute
and unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Debt Security or this Indenture,
any failure to enforce the provisions of any such Debt Security or this
Indenture, any waiver, modification or indulgence granted to the Company with
respect thereto, by any Guaranteed Party or any other circumstances which may
otherwise constitute a legal or equitable discharge or defense of the Company or
a surety or guarantor. The Guarantors hereby waive diligence, presentment,
filing of claims with a court in the event of merger or bankruptcy of the
Company, any right to require a proceeding first against the Company, the
benefit of
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discussion, protest or notice with respect to any such Debt Security or the
indebtedness evidenced thereby and all demands whatsoever (except as specified
above), and covenant that this Guarantee will not be discharged as to any such
Debt Security except by payment in full of the Guaranteed Obligations, pursuant
to Article X, or upon conversion of such Debt Security in accordance with
Article XIII. Each Guarantor further agrees that, as between such Guarantor and
the Guaranteed Parties, (x) the maturity of Guaranteed Obligations may be
accelerated as provided in Article VII for the purpose of the Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations, and (y) in the event of
any declaration of acceleration of such Guaranteed Obligations as provided in
Article VII, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by each Guarantor for the purpose of this
Guarantee. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article VII, the Trustee shall promptly
make a demand for payment on the Debt Securities under each Guarantee provided
for in this Article XIV and not discharged.
Each Guarantor hereby irrevocably waives any claim or other rights that it
may now or hereafter acquire against the Company that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under this
Indenture, or any other document or instrument including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of the
Guaranteed Parties against the Company, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or in any other manner, payment or
security on account of such claim or other rights. If any amount shall be paid
to any Guarantor in violation of the preceding sentence and the Guaranteed
Obligations shall not have been paid in full, such amount shall be deemed to
have been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Guaranteed Parties, and shall forthwith be paid to the Trustee.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the issuance of the Debt Securities and that the waiver set forth in this
Section is knowingly made in contemplation of such benefits.
SECTION 14.2. Obligations of the Guarantors Unconditional. Nothing
contained in this Article XIV elsewhere in this Indenture or in any series of
Debt Securities or in the Guarantee is intended to or shall impair, as between
the Guarantors and the holders of Debt Securities, the obligations of the
Guarantors, which obligations are independent of the obligations of the Company
under the Debt Securities and this Indenture and are absolute and unconditional,
to pay to the holders of Debt Securities the Guaranteed Obligations as and when
the same shall become due and payable in accordance with the provisions of this
Guarantee and this Indenture, nor shall anything herein or therein prevent the
Trustee or any holder of Debt Securities from exercising all remedies otherwise
permitted by applicable law upon an Event of Default under this Indenture. Each
payment to be made by any Guarantor hereunder in respect of the Guaranteed
Obligations shall be payable in the currency or currencies in which such
Guaranteed Obligations are denominated.
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<PAGE>
SECTION 14.3. Execution of Guarantee. To evidence its obligations under
this Article XIV, each Guarantor hereby agrees to execute a guarantee in a form
set forth in the supplemental indenture for such series of Debt Securities, to
be endorsed on each Debt Security authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of the Guarantors by their
respective Presidents or Vice Presidents (regardless of Vice Presidential
designation), under their corporate seals reproduced thereon attested by their
respective Secretaries or Assistant Secretaries. The signature of any of these
officers on the Debt Securities may be manual or facsimile. Each Guarantor
hereby agrees that its Guarantee set forth in this Article XIV shall remain in
full force and effect notwithstanding any failure to endorse such Guarantee on
any series of Debt Securities.
If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates a Debt Security on which this
Guarantee is endorsed, the Guarantee shall be valid nevertheless.
SECTION 14.4. Withholding. All payments made by a Guarantor with respect
to the Guarantees will be made without withholding or deduction for, or on
account of, any present or future taxes, duties, assessments or governmental
charges of whatever nature imposed or levied by or on behalf of any country
(other than the United States) or any political subdivision thereof or any
authority therein or thereof, having power to tax, unless the withholding or
deduction of such taxes, duties, assessments or governmental charges is then
required by law. In the event that any country (other than the United States)
or any political subdivision thereof or any authority therein or thereof,
imposes any such withholding or deduction on (a) any payments made by a
Guarantor with respect to the Guarantees or (b) any net proceeds on the sale to
or exchange with any Guarantor of the Debt Securities, such Guarantor will pay
such additional amounts (the "Additional Amounts") as may be necessary in order
that the net amounts received in respect of such payments or sale or exchange by
the holders of the Debt Securities or the Trustee, as the case may be, after
such withholding or deduction shall equal the respective amounts that would have
been received in respect of such payments or sale or exchange in the absence of
such withholding or deduction; except that no such Additional Amounts shall be
payable with respect to any series of Debt Securities held by or on behalf of a
holder who is liable for such taxes, duties, assessments or governmental charges
in respect of such Debt Security by reason of his being a citizen or resident
of, or carrying on a business in, the country of residence of any Guarantor.
Notwithstanding the foregoing, a Guarantor making a payment on the Debt
Securities pursuant to the Guarantee shall not be required to pay any Additional
Amounts if (x) the beneficial holder of a Debt Security receives by certified
mail (evidenced by a return receipt signed by such beneficial holder) (i)
written notice from such Guarantor no less than 60 days in advance of making
such payment and (ii) the appropriate forms or instructions necessary to enable
such beneficial holder to certify or document the availability of an exemption
from, or reduction of, the withholding or deduction of such taxes under
applicable law, which such instructions shall clearly specify that Additional
Amounts hereunder may not be paid if such forms are not completed by such
beneficial holder, and (y) the Guarantor that would otherwise have to pay such
Additional Amounts establishes to the satisfaction of the Trustee that the
obligation to pay such Additional Amounts would not have arisen but for the
failure
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<PAGE>
of such beneficial holder to (i) duly complete such forms as were actually
received by such beneficial holder or respond to such instructions and (ii)
provide to such Guarantor such duly completed forms or responses to
instructions. Without prejudice to the survival of any of the agreements of the
Guarantors hereunder, the agreements and obligations of the Guarantors contained
in this Section 14.4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guarantee.
SECTION 14.5. Limitation of Guarantee. The Company and each holder of a
Debt Security by his or her acceptance thereof, hereby confirm that it is the
intention of all such parties that any Guarantee of the Guaranteed Obligations
executed by a Guarantor pursuant to this Indenture and the terms of a
supplemental indenture for any series of Debt Securities not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act or any similar federal or state law. To
effectuate the foregoing intention, the holders of Debt Securities hereby
irrevocably agree that in the event that any such Guarantee would constitute or
result in a violation of any applicable fraudulent conveyance or similar law of
any relevant jurisdiction, the liability of the Guarantor under such Guarantee
shall be reduced to the maximum amount, after giving effect to all other
contingent and fixed liabilities of such Guarantor, permissible under the
applicable fraudulent conveyance or similar law.
SECTION 14.6. Release of Guarantee. (a) Concurrently with the payment in
full of all of the Guaranteed Obligations, the Guarantors shall be released from
and relieved of their obligations under this Article XIV. Upon the delivery by
the Company to the Trustee of an Officers' Certificate and, if requested by the
Trustee, an Opinion of Counsel to the effect that the transaction giving rise to
the release of such obligations was made by the Company in accordance with the
provisions of this Indenture and the Debt Securities, the Trustee shall execute
any documents reasonably required in order to evidence the release of the
Guarantors from their obligations. If any of the Guaranteed 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
Guaranteed Obligations are paid in full, and the Guarantors shall enter into an
amendment to this Guarantee, reasonably satisfactory to the Trustee, evidencing
such revival and reinstatement.
(b) Upon the sale or disposition of all the Capital Stock of a Guarantor
(by merger or otherwise) to a Person other than the Company or any other
Guarantor and which sale or disposition is otherwise in compliance with the
terms of this Indenture, such Guarantor shall be deemed released from all
obligations under this Article XIV; provided, however, that any such termination
-------- -------
upon such sale or disposition shall occur if and only to the extent that all
obligations of such Guarantor under all of its guarantees of, and under all of
its pledges of assets or other security interests which secure, indebtedness of
the Company or any other Guarantor shall also terminate upon such sale or
disposition. Upon the delivery by the Company to the Trustee of an Officers'
Certificate and, if requested by the Trustee, an Opinion of Counsel to the
effect that the transaction giving rise to the release of such obligations was
made in accordance with the provisions of this Indenture and the Debt
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Securities, the Trustee shall execute any documents reasonably required in order
to evidence the release of such Guarantor from its obligations. Any Guarantor
not so released remains liable for the full amount of principal of and interest
on the Debt Securities as provided in this Article XIV.
(c) With respect to any series of Debt Securities, upon conversion of such
Debt Security in accordance with the provisions of Article XIII, the Guarantors
shall be released from and relieved of their obligations with respect to such
Debt Security under this Article XIV. Upon such conversion, if so requested by
a Guarantor, the Trustee shall execute any documents reasonably required in
order to evidence the release of the Guarantors from their obligations. If any
of the Guaranteed 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 Guaranteed Obligations are paid in full, and
the Guarantors shall enter into an amendment to this Guarantee, reasonably
satisfactory to the Trustee, evidencing such revival and reinstatement.
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<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 BRANDS, INC.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
BATAVIA WINE CELLARS, INC.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
BARTON INCORPORATED
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
<PAGE>
BARTON BRANDS, LTD.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
BARTON BEERS, LTD.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
BARTON BRANDS OF CALIFORNIA, INC.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
BARTON BRANDS OF GEORGIA, INC.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
<PAGE>
BARTON DISTILLERS IMPORT CORP.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
BARTON FINANCIAL CORPORATION
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
STEVENS POINT BEVERAGE CO.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
MONARCH IMPORT COMPANY
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
<PAGE>
CANANDAIGUA WINE COMPANY, INC.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
THE VIKING DISTILLERY, INC.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
CANANDAIGUA EUROPE LIMITED
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
POLYPHENOLICS, INC.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
<PAGE>
CANANDAIGUA LIMITED
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
ROBERTS TRADING CORP.
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
<PAGE>
HARRIS TRUST AND SAVINGS BANK, as
Trustee
By: __________________________________
Name:
Title:
Attest: ____________________
Name:
Title:
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the ____ day of ____________, ____, 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 CANANDAIGUA BRANDS, INC., a Delaware corporation, the
corporation described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
---------------------------
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
BATAVIA WINE CELLARS, INC., a New York corporation, the corporation described in
and which executed the above instrument; that he or she knows the seal of said
corporation; that the seal affixed to the said instrument is such seal; that it
was so affixed by authority of the Board of Directors of said corporation; and
that he or she signed his or her name thereto by like authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the ____ day of ____________, ____, 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 INCORPORATED, a Delaware corporation, the
corporation described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
---------------------------
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
BARTON BRANDS, LTD., a Delaware corporation, the corporation described in and
which executed the above instrument; that he or she knows the seal of said
corporation; that the seal affixed to the said instrument is such seal; that it
was so affixed by authority of the Board of Directors of said corporation; and
that he or she signed his or her name thereto by like authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the ____ day of ____________, ____, 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 BEERS, LTD., a Maryland corporation, the corporation
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
---------------------------
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
BARTON BRANDS OF CALIFORNIA, INC., a Connecticut corporation, the corporation
described in and which executed the above instrument; that he or she knows the
seal of said corporation; that the seal affixed to the said instrument is such
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he or she signed his or her name thereto by like
authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the ____ day of ____________, ____, 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 BRANDS OF GEORGIA, INC., a Georgia corporation, the
corporation described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
---------------------------
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
BARTON DISTILLERS IMPORT CORP., a New York corporation, the corporation
described in and which executed the above instrument; that he or she knows the
seal of said corporation; that the seal affixed to the said instrument is such
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he or she signed his or her name thereto by like
authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the ____ day of ____________, ____, 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 FINANCIAL CORPORATION, a Delaware corporation, the
corporation described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
---------------------------
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
STEVENS POINT BEVERAGE CO., a Wisconsin corporation, the corporation described
in and which executed the above instrument; that he or she knows the seal of
said corporation; that the seal affixed to the said instrument is such seal;
that it was so affixed by authority of the Board of Directors of said
corporation; and that he or she signed his or her name thereto by like
authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
MONARCH IMPORT COMPANY, an Illinois corporation, the corporation described in
and which executed the above instrument; that he or she knows the seal of said
corporation; that the seal affixed to the said instrument is such seal; that it
was so affixed by authority of the Board of Directors of said corporation; and
that he or she signed his or her name thereto by like authority.
[NOTARIAL SEAL]
---------------------------
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
CANANDAIGUA WINE COMPANY, INC., a New York corporation, the corporation
described in and which executed the above instrument; that he or she knows the
seal of said corporation; that the seal affixed to the said instrument is such
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he or she signed his or her name thereto by like
authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
THE VIKING DISTILLERY, INC., a Georgia corporation, the corporation described in
and which executed the above instrument; that he or she knows the seal of said
corporation; that the seal affixed to the said instrument is such seal; that it
was so affixed by authority of the Board of Directors of said corporation; and
that he or she signed his or her name thereto by like authority.
[NOTARIAL SEAL]
---------------------------
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
she resides at _________________, that he or she is ______________________ of
CANANDAIGUA EUROPE LIMITED, a New York corporation, the corporation described in
and which executed the above instrument; that he or she knows the seal of said
corporation; that the seal affixed to the said instrument is such seal; that it
was so affixed by authority of the Board of Directors of said corporation; and
that he or she signed his or her name thereto by like authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the ____ day of ____________, ____, 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 POLYPHENOLICS, INC., a New York corporation, the
corporation described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the ____ day of ____________, ____, 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 CANANDAIGUA LIMITED, a company organized under the laws of
England and Wales, the company described in and which executed the above
instrument; that he knows the corporate seal of said company; that the seal
affixed to the said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said company; and that he signed his name
thereto by like authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the ____ day of ____________, ____, 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 ROBERTS TRADING CORP., a New York corporation, the
corporation described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
STATE OF NEW YORK __________ )
) ss.:
COUNTY OF __________________ )
On the _____ day of ________________, ____, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
he or she resides at _________________, that he or she is ______________________
of HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation described in
and which executed the above instrument; that she knows the seal of said
corporation; that the seal affixed to the said instrument is such seal; that it
was so affixed by authority of the Board of Directors of said corporation; and
that he or she signed his or her name thereto by like authority.
[NOTARIAL SEAL]
---------------------------
<PAGE>
- --------------------------------------------------------------------------------
CANANDAIGUA BRANDS, INC.,
as Issuer
------
Batavia Wine Cellars, Inc.
Barton Incorporated
Barton Brands, Ltd.
Barton Beers, Ltd.
Barton Brands of California, Inc.
Barton Brands of Georgia, Inc.
Barton Distillers Import Corp.
Barton Financial Corporation
Stevens Point Beverage Co.
Canandaigua Limited
Monarch Import Company
Canandaigua Wine Company, Inc.
The Viking Distillery, Inc.
Canandaigua Europe Limited
Roberts Trading Corp.
Polyphenolics, Inc.,
as Guarantors
----------
and
HARRIS TRUST AND SAVINGS BANK,
as Trustee
-------
_____________________
Supplemental Indenture No. 1
Dated as of February 25, 1999
_____________________
$200,000,000
of
8 1/2% Senior Subordinated Notes due 2009
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.1. Relation to Indenture....................................... 2
SECTION 1.2. Definitions................................................. 2
ARTICLE TWO
THE SERIES OF DEBT SECURITIES
SECTION 2.1. Title of the Debt Securities................................ 21
SECTION 2.2. Limitation on Aggregate Principal Amount.................... 21
SECTION 2.3. Interest and Interest Rates; Maturity Date of Notes......... 21
SECTION 2.4. Optional Redemption......................................... 22
SECTION 2.5. Sinking Fund................................................ 22
SECTION 2.6. Method of Payment........................................... 23
SECTION 2.7. Currency.................................................... 23
SECTION 2.8. Registered Securities; Global Form.......................... 23
SECTION 2.9. Form of Notes............................................... 23
ARTICLE THREE
COVENANTS
SECTION 3.1. Payment of Taxes and Other Claims........................... 24
SECTION 3.2. Maintenance of Properties................................... 24
SECTION 3.3. Insurance................................................... 25
SECTION 3.4. Limitation on Indebtedness.................................. 25
SECTION 3.5. Limitation on Restricted Payments........................... 28
SECTION 3.6. Limitation on Transactions with Affiliates.................. 32
SECTION 3.7. Limitation on Senior Subordinated Indebtedness.............. 33
SECTION 3.8. Limitation on Liens......................................... 33
SECTION 3.9. Limitation on Sale of Assets................................ 35
SECTION 3.10. Limitation on Guarantees by Restricted Subsidiaries......... 40
SECTION 3.11. Purchase of Notes upon a Change of Control.................. 42
SECTION 3.12. Limitation on Restricted Subsidiary Capital Stock........... 46
i
<PAGE>
SECTION 3.13. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted
Subsidiaries.............................................. 46
SECTION 3.14. Designation of Unrestricted Subsidiaries..................... 47
SECTION 3.15. Provision of Financial Statements............................ 48
SECTION 3.16. Statement by Officers as to Default.......................... 49
SECTION 3.17. Waiver of Certain Covenants.................................. 50
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 4.1. Satisfaction and Discharge of Indenture...................... 50
SECTION 4.2. Application of Trust Money................................... 52
SECTION 4.3. Termination of Company's Obligations......................... 52
SECTION 4.4. Application of Trust Money................................... 54
SECTION 4.5. Repayment to Company......................................... 54
SECTION 4.6. Reinstatement................................................ 55
ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default............................................ 55
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment........... 58
ARTICLE SIX
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
SECTION 6.1. Company or Any Guarantor May Consolidate,
etc., Only on Certain Terms................................ 60
SECTION 6.2. Successor Substituted........................................ 63
ARTICLE SEVEN
SUBORDINATION OF NOTES
SECTION 7.1. Notes Subordinated to Senior Indebtedness.................... 63
SECTION 7.2. No Payment on Notes in Certain Circumstances................. 64
SECTION 7.3. Payment Over of Proceeds upon Dissolution, etc............... 65
SECTION 7.4. Subrogation.................................................. 67
SECTION 7.5. Obligations of Company Unconditional......................... 68
ii
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SECTION 7.6. Notice to Trustee............................................ 68
SECTION 7.7. Reliance on Judicial Order or Certificate
of Liquidating Agent....................................... 69
SECTION 7.8. Trustee's Relation to Senior
Indebtedness............................................... 70
SECTION 7.9. Subordination Rights Not Impaired by Acts
or Omissions of the Company or Holders
of Senior Indebtedness.................................... 70
SECTION 7.10. Holders Authorize Trustee To Effectuate
Subordination of Notes.................................... 71
SECTION 7.11. This Article Not To Prevent Events of Default................ 71
SECTION 7.12. Trustee's Compensation Not Prejudiced........................ 71
SECTION 7.13. No Waiver of Subordination Provisions........................ 71
SECTION 7.14. Subordination Provisions Not Applicable
to Money Held in Trust for Holders;
Payments May Be Paid Prior to
Dissolution............................................... 72
SECTION 7.15. Acceleration of Notes........................................ 72
ARTICLE EIGHT
SUBORDINATION OF GUARANTEE
SECTION 8.1. Guarantee Obligations Subordinated to Guarantor Senior
Indebtedness.............................................. 73
SECTION 8.2. No Payment on Guarantees in Certain Circumstances............ 73
SECTION 8.3. Payment Over of Proceeds upon Dissolution, etc............... 75
SECTION 8.4. Subrogation.................................................. 76
SECTION 8.5. Obligations of Guarantors Unconditional...................... 77
SECTION 8.6. Notice to Trustee............................................ 78
SECTION 8.7. Reliance on Judicial Order or Certificate
of Liquidating Agent....................................... 79
SECTION 8.8. Trustee's Relation to Guarantor Senior Indebtedness.......... 79
SECTION 8.9. Subordination Rights Not Impaired by Acts
or Omissions of the Guarantors or
Holders of Guarantor Senior
Indebtedness............................................... 80
SECTION 8.10. Holders Authorize Trustee To Effectuate
Subordination of Guarantee................................. 80
SECTION 8.11. This Article Not To Prevent Events of Default................ 81
SECTION 8.12. Trustee's Compensation Not Prejudiced........................ 81
SECTION 8.13. No Waiver of Guarantee Subordination
Provisions................................................. 81
iii
<PAGE>
SECTION 8.14. Payments May Be Paid Prior to Dissolution.................... 81
ARTICLE NINE
MISCELLANEOUS PROVISIONS
SECTION 9.1. Ratification of Indenture.................................... 82
SECTION 9.2. Governing Law................................................ 82
SECTION 9.3. Counterparts................................................. 82
ARTICLE TEN
GUARANTEES
SECTION 10.1. Guarantors' Guarantee........................................ 83
SECTION 10.2. Continuing Guarantee; No Right of Set-
Off; Independent Obligation................................ 83
SECTION 10.3. Guarantee Absolute........................................... 84
SECTION 10.4. Right To Demand Full Performance............................. 87
SECTION 10.5. Waivers...................................................... 87
SECTION 10.6. The Guarantors Remain Obligated in Event
the Company Is No Longer Obligated to
Discharge Indenture Obligations............................ 88
SECTION 10.7. Fraudulent Conveyance; Subrogation........................... 88
SECTION 10.8. Guarantee Is in Addition to Other Security................... 89
SECTION 10.9. Release of Security Interests................................ 89
SECTION 10.10. No Bar to Further Actions.................................... 89
SECTION 10.11. Failure To Exercise Rights Shall Not
Operate as a Waiver; No Suspension of
Remedies................................................... 89
SECTION 10.12. Trustee's Duties; Notice to Trustee.......................... 90
SECTION 10.13. Successors and Assigns....................................... 90
SECTION 10.14. Release of Guarantee......................................... 90
SECTION 10.15. Execution of Guarantee....................................... 91
SUPPLEMENTAL INDENTURES
SECTION 11.1. Supplemental Indentures and Agreements
Without Consent of Holders................................. 92
SECTION 11.2. Supplemental Indentures and Agreements
with Consent of Holders.................................... 93
SECTION 11.3. Effect on Senior Indebtedness................................ 94
Exhibit A Form of Note
iv
<PAGE>
Exhibit B Form of Intercompany Note
Exhibit C Form of Guarantee
v
<PAGE>
SUPPLEMENTAL INDENTURE NO. 1, dated as of February 25, 1999 (the
"Supplemental Indenture"), between CANANDAIGUA BRANDS, INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the "Company"), the guarantors named herein and from time to time parties
hereto, and HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation as
Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
-----------------------
WHEREAS, the Company has heretofore delivered to the Trustee an
Indenture dated as of February 25, 1999 (the "Indenture"), a form of which has
been filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, as an exhibit to the Company's Registration Statement on
Form S-3 (Registration No. 333-40571), providing for the issuance from time to
time of Debt Securities of the Company.
WHEREAS, Sections 2.1 and 2.2 of the Indenture provide for various
matters with respect to any series of Debt Securities issued under the Indenture
to be established in an indenture supplemental to the Indenture.
WHEREAS, Section 12.1 of the Indenture provides for the Company and
the Trustee to enter into an indenture supplemental to the Indenture to
establish the form or terms of Debt Securities of any series as provided by
Sections 2.1 and 2.2 of the Indenture.
WHEREAS, all the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
series of Debt Securities provided for herein by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Notes, as follows:
<PAGE>
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
----------------------------------
SECTION 1.1. Relation to Indenture.
---------------------
This Supplemental Indenture constitutes an integral part of the
Indenture.
SECTION 1.2. Definitions.
-----------
For all purposes of this Supplemental Indenture, except as otherwise
expressly provided for or unless the context otherwise requires:
(1) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture; and
(3) To the extent terms defined herein differ from the Indenture the
terms defined herein will govern.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
the time such Person becomes a Restricted Subsidiary or (ii) assumed in
connection with the acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or such acquisition. Acquired
Indebtedness shall be deemed to be incurred on the date of the related
acquisition of assets from any Person or the date the acquired Person becomes a
Restricted Subsidiary.
"Affiliate" means, with respect to any specified Person: (i) any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person; (ii) any other Person
that owns, directly or indirectly, 5% or more of such Person's Capital Stock or
any officer or director of any such Person or other Person or, with respect to
any natural Person, any person having a relationship with such Person by blood,
marriage or adoption not more remote than first cousin; or (iii) any other
Person 10% or more of the voting Capital Stock of which is beneficially owned or
held directly or indirectly by such specified
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<PAGE>
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person directly or indirectly, whether through ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions of: (i) any
Capital Stock of any Restricted Subsidiary; (ii) all or substantially all of the
properties and assets of any division or line of business of the Company or its
Restricted Subsidiaries; or (iii) any other properties or assets of the Company
or any Restricted Subsidiary, other than in the ordinary course of business.
For the purposes of this definition, the term "Asset Sale" shall not include (x)
any transfer of properties and assets (A) that is governed by Section 6.1(a) or
(B) that is of the Company to any Restricted Subsidiary, or of any Subsidiary to
the Company or any Subsidiary in accordance with the terms of this Supplemental
Indenture and the Indenture or (y) transfers of properties and assets in any
given fiscal year with an aggregate Fair Market Value of less than $3,000,000.
"Asset Swap" means the execution of a definitive agreement, subject
only to customary closing conditions that the Company in good faith believes
will be satisfied, for a substantially concurrent purchase and sale, or
exchange, of Productive Assets between the Company or any of its Restricted
Subsidiaries and another Person or group of affiliated Persons; it being
understood that an Asset Swap may include a cash equalization payment made in
connection therewith provided that such cash payment, if received by the Company
or its Subsidiaries, shall be deemed to be proceeds received from an Asset Sale
and applied in accordance with Section 3.9.
"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.
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<PAGE>
"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.
"Borrowing Base" means the sum of (i) 85% of accounts receivable of
the Company and its Subsidiaries and (ii) 50% of the net book value of the
inventory of the Company and its Subsidiaries, in each case, as determined on a
consolidated basis in accordance with GAAP.
"Capital Lease Obligation" means any obligations of the Company and
its Restricted Subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
"Change of Control" shall mean 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
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<PAGE>
Directors then in office; (iii) the Company consolidates with or merges with or
into any Person or conveys, transfers or leases all or substantially all of its
assets to any Person, or any corporation consolidates with or merges into or
with the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for cash,
securities or other property, other than any such transaction where the
outstanding Voting Stock of the Company is not changed or exchanged at all
(except to the extent necessary to reflect a change in the jurisdiction of
incorporation of the Company) or where (A) the outstanding Voting Stock of the
Company is changed into or exchanged for (x) Voting Stock of the surviving
corporation which is not Redeemable Capital Stock or (y) cash, securities and
other property (other than Capital Stock of the surviving corporation) in an
amount which could be paid by the Company as a Restricted Payment in accordance
with Section 3.5 (and such amount shall be treated as a Restricted Payment
subject to the provisions set forth in Section 3.5) and (B) no "person" or
"group" other than Permitted Holders owns immediately after such transaction,
directly or indirectly, more than the greater of (1) 30% of the voting power of
the total outstanding Voting Stock of the surviving corporation voting as one
class and (2) the percentage of such voting power of the surviving corporation
held, directly or indirectly, by Permitted Holders immediately after such
transaction; or (iv) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with the
provisions described in Section 6.1.
"Change of Control Offer" shall have the meaning set forth in Section
3.11(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Supplemental Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means Canandaigua Brands, Inc., a corporation incorporated
under the laws of Delaware, until a successor Person shall have become such
pursuant to the applicable provisions of this Supplemental Indenture or the
Indenture, and thereafter "Company" shall mean such successor Person.
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<PAGE>
"Consolidated Fixed Charge Coverage Ratio" of the Company means, for
any period, the ratio of (a) the sum of Consolidated Net Income (Loss),
Consolidated Interest Expense, Consolidated Income Tax Expense and Consolidated
Non-cash Charges deducted in computing Consolidated Net Income (Loss) in each
case, for such period, of the Company and its Restricted Subsidiaries on a
Consolidated basis, all determined in accordance with GAAP to (b) the sum of
Consolidated Interest Expense for such period and cash and non-cash dividends
paid on any Preferred Stock of the Company and its Restricted Subsidiaries
during such period; provided that (i) in making such computation, the
Consolidated Interest Expense attributable to interest on any Indebtedness
computed on a pro forma basis and (A) bearing a floating interest rate, shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period and (B) which was not outstanding during
the period for which the computation is being made but which bears, at the
option of the Company, a fixed or floating rate of interest, shall be computed
by applying at the option of the Company, either the fixed or floating rate and
(ii) in making such computation, the Consolidated Interest Expense of the
Company attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period.
"Consolidated Income Tax Expense" means for any period, as applied to
the Company, the provision for federal, state, local and foreign income taxes of
the Company and its Restricted Subsidiaries for such period as determined in
accordance with GAAP on a Consolidated basis.
"Consolidated Interest Expense" of the Company means, without
duplication, for any period, the sum of (a) the interest expense of the Company
and its Restricted Subsidiaries for such period, on a Consolidated basis,
including, without limitation, (i) amortization of debt discount, (ii) the net
cost under interest rate contracts (including amortization of discounts), (iii)
the interest portion of any deferred payment obligation and (iv) accrued
interest, plus (b) (i) the interest component of the Capital Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by the Company and its
Restricted Subsidiaries during such period and (ii) all capitalized interest of
the Company and its Restricted Subsidiaries, in each case as determined in
accordance with GAAP on a Consolidated basis. Whenever pro forma effect is to
be given to an acquisition or disposition of assets for the purpose of
calculating the Consolidated Fixed Charge Coverage Ratio, the
-6-
<PAGE>
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection with such acquisition or disposition of assets shall be
calculated on a pro forma basis in accordance with Regulation S-X under the
Securities Act, as in effect on the date of such calculation.
"Consolidated Net Income (Loss)" of the Company means, for any period,
the Consolidated net income (or loss) of the Company and its Restricted
Subsidiaries for such period as determined in accordance with GAAP on a
Consolidated basis, adjusted, to the extent included in calculating such net
income (loss), by excluding, without duplication: (i) all extraordinary gains
or losses (less all fees and expenses relating thereto); (ii) the portion of net
income (or loss) of the Company and its Restricted Subsidiaries allocable to
minority interests in unconsolidated Persons to the extent that cash dividends
or distributions have not actually been received by the Company or one of its
Restricted Subsidiaries; (iii) net income (or loss) of any Person combined with
the Company or any of its Restricted Subsidiaries on a "pooling of interests"
basis attributable to any period prior to the date of combination; (iv) any gain
or loss, net of taxes, realized upon the termination of any employee pension
benefit plan; (v) net gains (but not losses) (less all fees and expenses
relating thereto) in respect of dispositions of assets other than in the
ordinary course of business; or (vi) the net income of any Restricted Subsidiary
to the extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulations
applicable to that Restricted Subsidiary or its stockholders. Whenever pro
forma effect is to be given to an acquisition or disposition of assets for the
purpose of calculating the Consolidated Fixed Charge Coverage Ratio, the amount
of income or earnings related to such assets shall be calculated on a pro forma
basis in accordance with Regulation S-X under the Securities Act, as in effect
on the date of such calculation.
"Consolidated Net Tangible Assets" means with respect to any Person,
as of any date of determination, the book value of such Person's total assets,
less goodwill, deferred financing costs and other intangibles and less
accumulated amortization, shown on the most recent balance sheet of such Person,
determined on a consolidated basis in accordance with GAAP.
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<PAGE>
"Consolidated Net Worth" of any Person means the Consolidated
stockholders' equity (excluding Redeemable Capital Stock) of such Person and its
subsidiaries, as determined in accordance with GAAP on a Consolidated basis.
"Consolidated Non-cash Charges" of the Company means, for any period,
the aggregate depreciation, amortization and other non-cash charges of the
Company and its Restricted Subsidiaries for such period, as determined in
accordance with GAAP on a Consolidated basis (excluding any non-cash charge
which requires an accrual or reserve for cash charges for any future period).
"Consolidation" means, with respect to any Person, the consolidation
of the accounts of such Person and each of its subsidiaries if and to the extent
the accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.
"Credit Agreement" means the First Amended and Restated Credit
Agreement, dated as of November 2, 1998, between the Company, the Subsidiaries
of the Company identified on the signature pages thereof, the lenders named
therein and The Chase Manhattan Bank, as administrative agent, including any
deferrals, renewals, extensions, replacements, refinancings or refundings
thereof or amendments, modifications or supplements thereto and any agreements
therefor (including any of the foregoing that increase the principal amount of
Indebtedness or the commitments to lend thereunder and have been made in
compliance with the provisions of Section 3.4; provided that, for purposes of
the definition of "Permitted Indebtedness," no such increase may result in the
principal amount of Indebtedness of the Company under the Credit Agreement
exceeding the amount permitted by subparagraph (b)(i) of Section 3.4), whether
by or with the same or any other lender, creditor, group of lenders or group of
creditors, and including related notes, guarantees and note agreements and other
instruments and agreements executed in connection therewith.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" or "DTC" has the meaning set forth in Section 2.6.
"Designated Guarantor Senior Indebtedness" means, with respect to any
Guarantor, (i) any Indebtedness of such
-8-
<PAGE>
Guarantor outstanding under the Credit Agreement and (ii) any other Guarantor
Senior Indebtedness of such Guarantor which, at the time of determination, has
an aggregate principal amount outstanding, together with any commitments to lend
additional amounts, of at least $50,000,000 if the instrument governing such
other Guarantor Senior Indebtedness expressly states that such Indebtedness is
"Designated Guarantor Senior Indebtedness" for purposes of this Supplemental
Indenture.
"Designated Senior Indebtedness" means (i) any Indebtedness
outstanding under the Credit Agreement and (ii) any other Senior Indebtedness
which, at the time of determination, has an aggregate principal amount
outstanding, together with any commitments to lend additional amounts, of at
least $50,000,000 if the instrument governing such other Senior Indebtedness
expressly states that such Indebtedness is "Designated Senior Indebtedness" for
purposes of this Supplemental Indenture.
"Designation" has the meaning set forth in Section 3.14.
"Designation Amounts" has the meaning set forth in Section 3.14.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary of the
Company organized under the laws of the United States or any political
subdivision thereof or the operations of which are located substantially inside
the United States.
"Excess Proceeds" has the meaning set forth in Section 3.9(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Notes" means the Company's outstanding
8 3/4% Senior Subordinated Notes due 2003.
"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.
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<PAGE>
"Foreign Restricted Subsidiary" means a Restricted Subsidiary of the
Company not organized under the laws of the United States or any political
subdivision thereof and the operations of which are located substantially
outside of the United States.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of this Supplemental Indenture.
"Guarantee" means the guarantee by each Guarantor of the Company's
Indenture Obligations pursuant to a guarantee given in accordance with this
Supplemental Indenture, including the Guarantees by the Guarantors and any
Guarantee delivered pursuant to provisions of Section 3.10.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
contained in this Section 1.2 guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.
"Guarantor" means the Subsidiaries listed on the signature pages of
this Supplemental Indenture as guarantors and each other Subsidiary required to
become a Guarantor after the Issue Date pursuant to Section 3.10.
"Hedging Agreement" means, with respect to any Person, all interest
rate swap or similar agreements or foreign currency or commodity hedge, exchange
or similar agreements of such Person.
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"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under Hedging Agreements.
"Holders" mean the registered holders of the Notes.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Acquired Person or any of
its Subsidiaries existing at the time such Acquired Person becomes a Subsidiary
(or is merged into or consolidated with the Company or any Subsidiary), whether
or not such Indebtedness was Incurred in connection with, as a result of, or in
contemplation of, such Acquired Person becoming a Subsidiary (or being merged
into or consolidated with the Company or any Subsidiary), shall be deemed
Incurred at the time any such Acquired Person becomes a Subsidiary or merges
into or consolidates with the Company or any Subsidiary.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities arising in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit issued under letter of credit
facilities, acceptance facilities or other similar facilities and in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any Capital Stock of such Person, or any warrants, rights or options
to acquire such Capital Stock, now or hereafter outstanding, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all Hedging Obligations of such Person, (v) all Capital Lease
Obligations of such Person, (vi) all Indebtedness referred to in clauses (i)
through (v) above of other Persons and all dividends of other Persons, the
payment
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of which is secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien, upon or
with respect to property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, (vii) all Guaranteed Debt of such
Person, (viii) all Redeemable Capital Stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends, and (ix) any amendment, supplement, modification, deferral, renewal,
extension, refunding or refinancing of any liability of the types referred to in
clauses (i) through (viii) above. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
the Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Redeemable Capital Stock, such Fair Market Value to be determined
in good faith by the board of directors of the issuer of such Redeemable Capital
Stock.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Supplemental Indenture or under the Notes, including
any Guarantor, to pay principal of, premium, if any, and interest when due and
payable, and all other amounts due or to become due under or in connection with
this Supplemental Indenture, the Notes and the performance of all other
obligations to the Trustee and the Holders under this Supplemental Indenture and
the Notes, according to the terms hereof or thereof.
"Insolvency or Liquidation Proceeding" means, with respect to any
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Interest Payment Date" has the meaning set forth in Section 2.3.
"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 Per-
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son of any Capital Stock, bonds, notes, debentures or other securities issued or
owned by, any other Person and all other items that would be classified as
investments on a balance sheet prepared in accordance with GAAP.
"Issue Date" means the original issue date of the Notes.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Maturity" when used with respect to any Note means the date on which
the principal of such Note becomes due and payable as therein provided or as
provided in this Supplemental Indenture, whether at Stated Maturity, the Offer
Date or the redemption date and whether by declaration of acceleration, Offer in
respect of Excess Proceeds, Change of Control, call for redemption or otherwise.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof in the form of cash or Temporary Cash Investments
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed for, cash or Temporary Cash
Investments (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary) net of (i) brokerage
commissions and other actual fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii) provisions for
all taxes payable as a result of such Asset Sale, (iii) payments made to retire
Indebtedness where payment of such Indebtedness is secured by the assets or
properties the subject of such Asset Sale, (iv) amounts required to be paid to
any Person (other than the Company or any Restricted Subsidiary) owning a
beneficial interest in the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as reflected in an Officers'
Certificate delivered to the Trustee and (b) with re-
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spect to any issuance or sale of Capital Stock or options, warrants or rights to
purchase Capital Stock, or debt securities or Capital Stock that have been
converted into or exchanged for Capital Stock, as referred to in Section 3.5,
the proceeds of such issuance or sale in the form of cash or Temporary Cash
Investments, including payments in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed for, cash or
Temporary Cash Investments (except to the extent that such obligations are
financed or sold with recourse to the Company or any Restricted Subsidiary), net
of attorneys' fees, accountants' fees and brokerage, consultation, underwriting
and other fees and expenses actually incurred in connection with such issuance
or sale and net of taxes paid or payable as a result thereof.
"Note Amount" has the meaning specified in Section 3.9 hereof.
"Notes" has the meaning specified in Section 2.1 hereof.
"Obligations" means any principal, interest (including, without
limitation, Post-Petition Interest), penalties, fees, indemnifications,
reimbursement obligations, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offer" has the meaning set forth in Section 3.9 hereof.
"Offer Date" has the meaning set forth in Section 3.9 hereof.
"Offer Price" has the meaning set forth in Section 3.9 hereof.
"Other Indebtedness" has the meaning set forth in Section 3.10 hereof.
"Pari Passu Indebtedness" means any Indebtedness of the Company or a
Guarantor that is pari passu in right of payment with the Notes or a Guarantee,
as the case may be.
"Pari Passu Offer" has the meaning set forth in Section 3.9 hereof.
"Permitted Holders" means as of the date of determination (i) Marvin
Sands, Richard Sands and Robert Sands;
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(ii) family members or the relatives of the Persons described in clause (i) or
the Mac and Sally Sands Foundation, Incorporated; (iii) any trusts created for
the benefit of the Persons described in clause (i), (ii) or (v) or for the
benefit of Andrew Stern or any trust for the benefit of any such trust; (iv) any
partnerships that are controlled by (and a majority of the partnership interests
in which are owned by) any of the Persons described in clauses (i), (ii), (iii)
or (v) or by any partnership that satisfies the conditions of this clause (iv);
or (v) in the event of the incompetence or death of any of the persons described
in clauses (i) and (ii), such Person's estate, executor, administrator,
committee or other personal representative or beneficiaries, in each case who at
any particular date shall beneficially own or have the right to acquire,
directly or indirectly, Capital Stock of the Company.
"Permitted Indebtedness" has the meaning set forth in Section 3.4.
"Permitted Investment" means (i) Investments in any Wholly Owned
Restricted Subsidiary or any Person which, as a result of such Investment,
becomes a Wholly Owned Restricted Subsidiary; (ii) Indebtedness of the Company
or a Restricted Subsidiary described under clauses (iv) and (v) of the
definition of "Permitted Indebtedness"; (iii) Temporary Cash Investments; (iv)
Investments acquired by the Company or any Restricted Subsidiary in connection
with an Asset Sale permitted under Section 3.9 to the extent such Investments
are non-cash proceeds as permitted under such covenant; (v) guarantees of
Indebtedness otherwise permitted by this Supplemental Indenture; (vi)
Investments in existence on the date of the Indenture; and (vii) Investments in
joint ventures in an aggregate amount not to exceed at any one time the greater
of (x) $50.0 million and (y) 5.0% of Consolidated Net Tangible Assets.
"Permitted Junior Securities" means any securities of the Company or
any successor corporation provided for by a plan of reorganization or
readjustment that are (i) equity securities without special covenants or (ii)
debt securities expressly subordinated in right of payment to all Senior
Indebtedness that may at the time be outstanding, to substantially the same
extent as, or to a greater extent than, the Notes are subordinated as provided
in this Supplemental Indenture, in any event pursuant to a court order so
providing and as to which (a) the rate of interest on such securities shall not
exceed the effective rate of interest on the Notes on the date of this
Supplemental Indenture, (b) such securities shall not be entitled to the
benefits of covenants or defaults materially more
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beneficial to the holders of such securities than those in effect with respect
to the Notes on the date of this Supplemental Indenture and (c) such securities
shall not provide for amortization (including sinking fund and mandatory
prepayment provisions) commencing prior to the date six months following the
final scheduled maturity date of the Senior Indebtedness (as modified by the
plan of reorganization or readjustment pursuant to which such securities are
issued).
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.
"Post-Petition Interest" means, with respect to any Indebtedness of
any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument creating,
evidencing or governing such Indebtedness, whether or not, pursuant to
applicable law or otherwise, the claim for such interest is allowed as a claim
in such Insolvency or Liquidation Proceeding.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's preferred stock, whether now outstanding, or issued after the date
of the Issue Date, and including, without limitation, all classes and series of
preferred or preference stock.
"Productive Assets" means assets of a kind used or usable by the
Company and its Restricted Subsidiaries in their respective businesses
(including, without limitation, contracts, leases, licenses or other agreements
of value to the Company or any of its Restricted Subsidiaries), provided,
however, that productive assets to be acquired by the Company or any Restricted
Subsidiary shall be, in the good faith judgment of management of the Company or
such Restricted Subsidiary, assets which are reasonably related, ancillary or
complementary to the business of the Company and its Restricted Subsidiaries as
conducted on the Issue Date.
"Public Equity Offering" means, with respect to the Company, an
underwritten public offering of Qualified Capital Stock of the Company pursuant
to an effective registration
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statement filed under the Securities Act (excluding registration statements
filed on Form S-8).
"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 (other than as a
result of a change of control provision substantially similar to that contained
in Section 3.11) or passage of time would be, required to be redeemed prior to
any Stated Maturity of the principal of the Notes or is redeemable at the option
of the holder thereof at any time prior to any such Stated Maturity, or is
convertible into or exchangeable for debt securities at any time prior to any
such Stated Maturity at the option of the holder thereof.
"Restricted Payment" has the meaning set forth in Section 3.5.
"Restricted Subsidiary" means any Subsidiary of the Company that has
not been designated by the Board of Directors of the Company, by a resolution of
the Board of Directors of the Company delivered to the Trustee, as an
Unrestricted Subsidiary pursuant to Section 3.14. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of such covenant.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a Restricted Subsidiary
sells or transfers any property 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.
"Senior Guarantor Indebtedness" means, at any date, (a) all
Obligations of the Guarantors 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
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to any other Indebtedness of any Guarantor; (b) all Hedging Obligations of the
Guarantors; (c) all Obligations of the Guarantors under stand-by letters of
credit; and (d) all other Indebtedness of the Guarantors for borrowed money,
including principal, premium, if any, and interest (including Post-Petition
Interest) on such Indebtedness, unless the instrument under which such
Indebtedness of the Guarantors for money borrowed is Incurred expressly provides
that such Indebtedness for money borrowed is not senior or superior in right of
payment to the Notes, and all renewals, extensions, modifications, amendments or
refinancings thereof. Notwithstanding the foregoing, Senior Guarantor
Indebtedness shall not include (a) to the extent that it may constitute
Indebtedness, any Obligation for Federal, state, local or other taxes; (b) any
Indebtedness among or between the Guarantors and any Subsidiary of the
Guarantors or any Affiliate of the Guarantors or any of such Affiliate's
Subsidiaries, unless and for so long as such Indebtedness has been pledged to
secure obligations under or in respect of Senior Guarantor Indebtedness; (c) to
the extent that it may constitute Indebtedness, any Obligation in respect of any
trade payable Incurred for the purchase of goods or materials, or for services
obtained, in the ordinary course of business; (d) that portion of any
Indebtedness that is Incurred in violation of the Indenture; (e) Indebtedness
evidenced by the Notes; (f) Indebtedness of the Guarantors that is expressly
subordinate or junior in right of payment to any other Indebtedness of the
Guarantors; (g) to the extent that it may constitute Indebtedness, any
obligation owing under leases (other than Capital Lease Obligations) or
management agreements; (h) any obligation that by operation of law is
subordinate to any general unsecured obligations of the Guarantors; (i)
Indebtedness represented by the Existing Notes; (j) Indebtedness incurred by the
Guarantors as part of the purchase price of the acquisition of assets or a
business; and (k) Indebtedness of the Guarantors to the extent such Indebtedness
is owed to and held by any Federal, state, local or other governmental
authority.
"Senior Indebtedness" means, at any date, (a) all Obligations of the
Company 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; (b) all Hedging Obligations of the Company; (c) all Obligations of the
Company under stand-by letters of credit; and (d) all other Indebtedness of the
Company for borrowed money, including principal, premium, if any, and in-
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terest (including Post-Petition Interest) on such Indebtedness, unless the
instrument under which such Indebtedness of the Company for money borrowed is
Incurred expressly provides that such Indebtedness for money borrowed is not
senior or superior in right of payment to the Notes, and all renewals,
extensions, modifications, amendments or refinancings thereof. Notwithstanding
the foregoing, Senior Indebtedness shall not include (a) to the extent that it
may constitute Indebtedness, any Obligation for Federal, state, local or other
taxes; (b) any Indebtedness among or between the Company and any Subsidiary of
the Company or any Affiliate of the Company or any of such Affiliate's
Subsidiaries, unless and for so long as such Indebtedness has been pledged to
secure obligations under or in respect of Senior Indebtedness; (c) to the extent
that it may constitute Indebtedness, any Obligation in respect of any trade
payable Incurred for the purchase of goods or materials, or for services
obtained, in the ordinary course of business; (d) that portion of any
Indebtedness that is Incurred in violation of the Indenture; (e) Indebtedness
evidenced by the Notes; (f) Indebtedness of the Company that is expressly
subordinate or junior in right of payment to any other Indebtedness of the
Company; (g) to the extent that it may constitute Indebtedness, any obligation
owing under leases (other than Capital Lease Obligations) or management
agreements; (h) any obligation that by operation of law is subordinate to any
general unsecured obligations of the Company; (i) Indebtedness represented by
the Existing Notes; (j) Indebtedness incurred by the Company as part of the
purchase price of the acquisition of assets or a business; and (k) Indebtedness
of the Company to the extent such Indebtedness is owed to and held by any
Federal, state, local or other governmental authority.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor subordinated in right of payment to the Notes, the Existing Notes or a
Guarantee, as the case may be.
"Subsidiary" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
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"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.
"United States Government Obligations" means direct non-callable
obligations of the United States of America for the payment of which the full
faith and credit of the United States is pledged.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 3.14. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of Section 3.14.
"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).
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"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
all the Capital Stock of which (other than directors' qualifying shares and up
to 5% of the issued and outstanding Capital Stock which may be owned by
executive officers of such Subsidiary) is owned by the Company or another Wholly
Owned Restricted Subsidiary.
ARTICLE TWO
THE SERIES OF DEBT SECURITIES
-----------------------------
SECTION 2.1. Title of the Debt Securities.
----------------------------
There shall be a series of Debt Securities designated the "8 1/2%
Senior Subordinated Notes due 2009" (the "Notes").
SECTION 2.2. Limitation on Aggregate Principal
Amount.
---------------------------------
The aggregate principal amount of the Notes shall be limited to
$200,000,000, and, except as provided in this Section and in Section 2.5 of the
Indenture, the Company shall not execute and the Trustee shall not authenticate
or deliver Notes in excess of such aggregate principal amount.
SECTION 2.3. Interest and Interest Rates;
Maturity Date of Notes.
----------------------------
The Notes will mature on March 1, 2009 and will be unsecured senior
subordinated obligations of the Company. Each Note will bear interest at the
rate of 8 1/2% per annum from March 4, 1999 or from the most recent interest
payment date to which interest has been paid, payable semi-annually on March 1
and September 1 in each year (each an "Interest Payment Date"), commencing
September 1, 1999, to the Person in whose name the Note (or any predecessor
Note) is registered at the close of business on the February 15 or August 15
next preceding such interest payment date. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months. The interest so
payable on any Note which is not punctually paid or duly provided for on any
Interest Payment Date shall forthwith cease to be payable to the Person in whose
name such Note is registered on the relevant regular record date, and such
defaulted interest shall instead be payable to the Person in whose name such
Note is registered on the special record date
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or other specified date determined in accordance with the Indenture.
If any Interest Payment Date or Stated Maturity falls on a day that is
not a Business Day, the required payment shall be made on the next Business Day
as if it were made on the date such payment was due and no interest shall accrue
on the amount so payable for the period from and after such Interest Payment
Date or Stated Maturity, as the case may be.
SECTION 2.4. Optional Redemption.
-------------------
The Notes may not be redeemed prior to March 1, 2004 except to the
extent permitted in connection with a Public Equity Offering as described in the
Form of Note attached hereto as Exhibit A. On or after March 1, 2004 the
Company will have the right to redeem all or any part of the Notes at the
Redemption Prices set forth in the Form of Note attached hereto as Exhibit A.
In the event that less than all of the Notes are to be redeemed at any
time pursuant to an optional redemption, selection of such Notes for redemption
will be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided, however, that no Notes of a principal amount of $1,000 or less shall
be redeemed in part; provided, further, however, that if a partial redemption is
made with the net cash proceeds of a Public Equity Offering by the Company,
selection of the Notes or portions thereof for redemption shall be made by the
Trustee only on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of The Depository Trust Company), unless
such method is otherwise prohibited. A new Note in a principal amount equal to
the unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation of the original Note.
SECTION 2.5. Sinking Fund.
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The Notes are not entitled to the benefit of any sinking fund.
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SECTION 2.6. Method of Payment.
-----------------
Settlement for the Notes will be made in same day funds. All payments
of principal and interest will be made by the Company in same day funds. The
Notes will trade in the Same-Day Funds Settlement System of The Depository Trust
Company (the "Depositary" or "DTC") until maturity, and secondary market trading
activity for the Notes will therefore settle in same day funds.
Principal of, premium, if any, and interest on the Notes will be
payable, and the Notes will be exchangeable and transferable, at the office or
agency of the Company in the City of New York maintained for such purposes
(which initially will be the Trustee); provided, however, that payment of
interest may be made at the option of the Company by check mailed to the Person
entitled thereto as shown on the security register.
SECTION 2.7. Currency.
--------
Principal and interest on the Notes shall be payable in United States
Dollars or in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
SECTION 2.8. Registered Securities; Global
Form.
-----------------------------
The Notes shall be issuable only in fully registered form without
coupons, in denominations of $1,000 and any integral multiple thereof. No
service charge will be made for any registration of transfer, exchange or
redemption of Notes, except in certain circumstances for any tax or other
governmental charge that may be imposed in connection therewith. The depository
for the Notes shall be the DTC. The Notes shall not be issuable in definitive
form.
SECTION 2.9. Form of Notes.
-------------
The Notes shall be substantially in the form attached as Exhibit A
hereto.
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ARTICLE THREE
COVENANTS
---------
The following covenants shall apply to the Notes (but not with respect
to any other series of Debt Securities), and are in addition to the covenants
set forth in Article IV of the Indenture. To the extent inconsistent with the
covenants contained in Article IV of the Indenture the covenants set forth in
this Supplemental Indenture shall govern with respect to the Notes (but not with
respect to any other series of Debt Securities).
SECTION 3.1. Payment of Taxes and Other
Claims.
--------------------------
The Company will pay or discharge or cause to be paid or discharged,
on or before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Restricted Subsidiary shown to be due on any return of the Company or any
Restricted Subsidiary or otherwise assessed or upon the income, profits or
property of the Company or any Restricted Subsidiary if failure to pay or
discharge the same could reasonably be expected to have a material adverse
effect on the ability of the Company or any Guarantor to perform its obligations
hereunder and (b) all lawful claims for labor, materials and supplies, which, if
unpaid, would by law become a Lien upon the property of the Company or any
Restricted Subsidiary, except for any Lien permitted to be incurred under
Section 3.8, if failure to pay or discharge the same could reasonably be
expected to have a material adverse effect on the ability of the Company or any
Guarantor to perform its obligations hereunder; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and in respect of which appropriate reserves
(in the good faith judgment of management of the Company) are being maintained
in accordance with GAAP consistently applied.
SECTION 3.2. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or
any Restricted Subsidiary or used or held for use in the conduct of its business
or the business of any Re-
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<PAGE>
stricted Subsidiary to be maintained and kept in good condition, repair and
working order (ordinary wear and tear excepted) and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be consistent with sound business practice and necessary so that
the business carried on in connection therewith may be properly conducted at all
times; provided, however, that nothing in this Section shall prevent the Company
from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Restricted Subsidiary and not reasonably
expected to have a material adverse effect on the ability of the Company to
perform its obligations hereunder.
SECTION 3.3. Insurance.
---------
The Company will at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by corporations
similarly situated and owning like properties.
SECTION 3.4. Limitation on Indebtedness.
--------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (including any Acquired Indebtedness),
except that the Company and any Guarantor may Incur Indebtedness (including any
Acquired Indebtedness) and any Restricted Subsidiary that is not a Guarantor may
Incur Acquired Indebtedness if, in each case, the Consolidated Fixed Charge
Coverage Ratio for the Company for the four full fiscal quarters immediately
preceding the Incurrence of such Indebtedness taken as one period (and after
giving pro forma effect to (i) the Incurrence of such Indebtedness and (if
applicable) the application of the net proceeds therefrom, including to
refinance other Indebtedness, as if such Indebtedness was Incurred, and the
application of such proceeds occurred, at the beginning of such four-quarter
period; (ii) the Incurrence, repayment or retirement of any other Indebtedness
by the Company and its Restricted Subsidiaries since the first day of such four-
quarter period as if such Indebtedness was Incurred, repaid or retired at the
beginning of such four-quarter period (except that, in making such computation,
the amount of Indebtedness under any revolving credit facility shall be computed
based upon the average daily balance
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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 Restricted Subsidiaries of any company or any
business or any assets out of the ordinary course of business, whether by
merger, stock purchase or sale or asset purchase or sale, or any related
repayment of Indebtedness, in each case since the first day of such four-quarter
period, assuming such acquisition or disposition had been consummated on the
first day of such four-quarter period) is equal to at least 2.00:1.00.
(b) The foregoing limitation will not apply to the Incurrence of any
of the following (collectively "Permitted Indebtedness"):
(i) Indebtedness of the Company and any Restricted Subsidiary
under the Credit Agreement in an aggregate principal amount at any one time
outstanding not to exceed an amount equal to the greater of (x) $1.0
billion, minus the amount of any repayment of such Indebtedness under the
Credit Agreement pursuant to Section 3.9, and (y) the Borrowing Base;
(ii) Indebtedness of the Company pursuant to the Notes and other
Indebtedness of the Company and its Restricted Subsidiaries outstanding on
the Issue Date (other than Indebtedness under the Credit Agreement);
(iii) Indebtedness of any Guarantor pursuant to a Guarantee;
(iv) Indebtedness of the Company owing to a Restricted Subsidiary;
provided that any Indebtedness of the Company owing to a Restricted
Subsidiary that is not a Guarantor is made pursuant to an intercompany note
in the form attached to this Supplemental Indenture as Exhibit B and is
subordinated in right of payment from and after such time as the Notes
shall become due and payable (whether at Stated Maturity, acceleration or
otherwise) to the payment and performance of the Company's obligations
under the Notes; provided, further, that any disposition, pledge or
transfer of any such Indebtedness to a Person (other than a disposition,
pledge or transfer to a Restricted Subsidiary or a pledge to or for the
benefit of the lenders under the Credit Agreement) shall be deemed to
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be an Incurrence of such Indebtedness by the obligor not permitted by this
clause (iv);
(v) Indebtedness of a Restricted Subsidiary owing to the Company or
a Wholly Owned Restricted Subsidiary; provided that, with respect to
Indebtedness owing to a Wholly Owned Restricted Subsidiary that is not a
Guarantor, (x) any such Indebtedness is made pursuant to an intercompany
note in the form attached to this Supplemental Indenture as Exhibit B and
(y) any such Indebtedness shall be subordinated in right of payment from
and after such time as the obligations under the Guarantee by such Wholly
Owned Restricted Subsidiary shall become due and payable to the payment and
performance of such Wholly Owned Restricted Subsidiary's obligations under
its Guarantee; provided further that (a) any disposition, pledge or
transfer of any such Indebtedness to a Person (other than a disposition,
pledge or transfer to the Company or a Restricted Subsidiary or a pledge to
or for the benefit of the lenders under the Credit Agreement) shall be
deemed to be an Incurrence of such Indebtedness by the obligor not
permitted by this clause (v), and (b) any transaction pursuant to which any
Restricted Subsidiary which has Indebtedness owing to the Company or any
other Restricted Subsidiary, ceases to be a Restricted Subsidiary shall be
deemed to be the Incurrence of Indebtedness by such Restricted Subsidiary
that is not permitted by this clause (v);
(vi) guarantees of any Restricted Subsidiary made in accordance with
the provisions of Section 3.10 of this Supplemental Indenture;
(vii) Hedging Obligations of the Company or any Guarantor entered
into in the ordinary course of business (and not for speculative purposes)
designed to protect against fluctuations in: (x) interest rates in respect
of Indebtedness of the Company or any of its Restricted Subsidiaries, as
long as such obligations at the time Incurred do not exceed the aggregate
principal amount of such Indebtedness then outstanding or in good faith
anticipated to be outstanding within 90 days of such Incurrence, (y)
currencies or (z) commodities;
(viii) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any
Indebted-ness described in clauses (ii) and (iii) of this definition of
"Permitted Indebted-
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<PAGE>
ness," including any successive refinancings so long as the aggregate
principal amount of Indebtedness represented thereby is not increased by
such refinancing plus the lesser of (1) the stated amount of any premium,
interest or other payment required to be paid in connection with such a
refinancing pursuant to the terms of the Indebtedness being refinanced or
(2) the amount of premium, interest or other payment actually paid at such
time to refinance the Indebtedness, plus, in either case, the amount of
expenses of the Company incurred in connection with such refinancing and,
in the case of Pari Passu Indebtedness or Subordinated Indebtedness, such
refinancing does not reduce the Average Life to Stated Maturity or the
Stated Maturity of such Indebtedness; and
(ix) Indebtedness, in addition to that described in clauses (i)
through (viii) of this definition of "Permitted Indebtedness," and any
renewals, extensions, substitutions, refinancings or replacements of such
Indebtedness, not to exceed $75.0 million outstanding at any one time in
the aggregate.
SECTION 3.5. Limitation on Restricted
Payments.
------------------------
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Company's Capital Stock (other than dividends
or distributions payable solely in shares of its Qualified Capital Stock or
in options, warrants or other rights to acquire such Qualified Capital
Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of the Capital Stock of the Company or
any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of
the Company) or options, warrants or other rights to acquire such Capital
Stock;
(iii) make any principal payment on, or repurchase, redeem,
defease, retire or otherwise acquire for value, prior to any scheduled
principal payment, sinking fund or maturity, any Subordinated Indebtedness;
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<PAGE>
(iv) declare or pay any dividend or distribution on any Capital
Stock of any Restricted Subsidiary to any Person (other than the Company or
any of its Restricted Subsidiaries) or purchase, redeem or otherwise
acquire or retire for value any Capital Stock of any Restricted Subsidiary
held by any Person (other than the Company or any of its Wholly Owned
Restricted Subsidiaries);
(v) Incur, create or assume any guarantee of Indebtedness of any
Affiliate (other than a Wholly Owned Restricted Subsidiary of the Company);
or
(vi) make any Investment in any Person (other than any Permitted
Investments);
(any of the foregoing payments described in clauses (i) through (vi), other than
any such action that is a Permitted Payment, collectively, "Restricted
Payments") unless after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Certified Resolution), (1) no Default or Event of Default shall
have occurred and be continuing and such Restricted Payment shall not be an
event which is, or after notice or lapse of time or both, would be, an "event of
default" under the terms of any Indebtedness of the Company or its Restricted
Subsidiaries; (2) immediately before and immediately after giving effect to such
transaction on a pro forma basis, the Company could Incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under the provisions contained
in Section 3.4; and (3) the aggregate amount of all such Restricted Payments
declared or made after the date of this Supplemental Indenture does not exceed
the sum of:
(A) 50% of the aggregate cumulative Consolidated Net Income of the
Company accrued on a cumulative basis during the period beginning on the
first day of the Company's fiscal quarter commencing prior to the date of
the 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); plus
(B) the aggregate Net Cash Proceeds received after the date of the
Indenture by the Company from the issuance or sale (other than to any of
its Subsidiaries) of its shares of Qualified Capital Stock or any options,
warrants or rights to purchase such shares of Qualified Capi-
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<PAGE>
tal 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); plus
(C) the aggregate Net Cash Proceeds received after the date of the
Indenture by the Company (other than from any of its Subsidiaries) upon the
exercise of any options or warrants to purchase shares of Qualified Capital
Stock of the Company; plus
(D) the aggregate Net Cash Proceeds received after the date of the
Indenture by the Company from debt securities or Redeemable Capital Stock
that has been converted into or exchanged for Qualified Capital Stock of
the Company to the extent such debt securities or Redeemable Capital Stock
is originally sold for cash plus the aggregate Net Cash Proceeds received
by the Company at the time of such conversion or exchange; plus
(E) in the event the Company or any Restricted Subsidiary makes an
Investment in a Person that, as a result of or in connection with such
Investment, becomes a Restricted Subsidiary, an amount equal to the
Company's or any Restricted Subsidiary's existing Investment in such Person
that was previously treated as a Restricted Payment; plus
(F) so long as the Designation thereof was treated as a Restricted
Payment made after the Issue Date, with respect to any Unrestricted
Subsidiary that has been redesignated as a Restricted Subsidiary after the
Issue Date in accordance with Section 3.14, an amount equal to the
Company's Investment in such Unrestricted Subsidiary (provided that such
amount shall not in any case exceed the Designation Amount with respect to
such Restricted Subsidiary upon its Designation); plus
(G) $50.0 million; minus
(H) the Designation Amount (measured as of the date of Designation)
with respect to any Subsidiary of the Company which has been designated as
an Unrestricted Subsidiary after the Issue Date in accordance with Section
3.14.
(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 provi-
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<PAGE>
sions shall not prohibit the following actions (clauses (i) through (iv) being
referred to as a "Permitted Payment"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would be
permitted by the provisions of paragraph (a) of this Section 3.5 and such
payment shall be deemed to have been paid on such date of declaration for
purposes of the calculation required by paragraph (a) of this Section 3.5;
(ii) the repurchase, redemption or other acquisition or retirement
of any shares of any class of Capital Stock of the Company in exchange for
(including any such exchange pursuant to the exercise of a conversion right
or privilege or in which cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the Net Cash Proceeds of, a substantially
concurrent issue and sale for cash (other than to a Subsidiary) of other
shares of Qualified Capital Stock of the Company; provided that the Net
Cash Proceeds from the issuance of such shares of Qualified Capital Stock
are excluded from clause (3)(B) of paragraph (a) of this Section 3.5;
(iii) any repurchase, redemption, defeasance, retirement,
refinancing or acquisition for value or payment of principal of any
Subordinated Indebtedness in exchange for, or out of the Net Cash Proceeds
of, a substantially concurrent issuance and sale for cash (other than to
any Subsidiary of the Company) of any Qualified Capital Stock of the
Company, provided that the Net Cash Proceeds from the issuance of such
shares of Qualified Capital Stock are excluded from clause (3)(B) of
paragraph (a) of this Section 3.5;
(iv) the repurchase, redemption, defeasance, retirement, refinancing
or acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Redeemable Capital Stock) (a "refinancing")
through the issuance of new Subordinated Indebtedness of the Company,
provided that any such new Subordinated Indebtedness (1) shall be in a
principal amount that does not exceed the principal amount so refinanced
(or, if such Subordinated Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration or
acceleration thereof, then such lesser amount as of the date of
determination), plus the lesser of (x) the stated amount of any premium,
interest or other payment
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required to be paid in connection with such a refinancing pursuant to the
terms of the Indebtedness being refinanced or (y) the amount of premium,
interest or other payment actually paid at such time to refinance the
Indebtedness, plus, in either case, the amount of expenses of the Company
Incurred in connection with such refinancing; (2) has an Average Life to
Stated Maturity greater than the remaining Average Life to Stated Maturity
of the Notes; (3) has a Stated Maturity for its final scheduled principal
payment later than the Stated Maturity for the final scheduled principal
payment of the Notes; and (4) is expressly subordinated in right of payment
to the Notes at least to the same extent as the Indebtedness to be
refinanced.
SECTION 3.6. Limitation on Transactions with
Affiliates.
-------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with any
Affiliate of the Company (other than the Company or a Wholly Owned Restricted
Subsidiary) unless (i) such transaction or series of transactions is in writing
on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction in arm's-length dealings with an unrelated third party, (ii) with
respect to any transaction or series of transactions involving aggregate
payments in excess of $10.0 million, the Company delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of related
transactions complies with clause (i) above and such transaction or series of
related transactions has been approved by the Board of Directors of the Company,
and (iii) with respect to a transaction or series of related transactions
involving aggregate value in excess of $25.0 million, the Company delivers to
the Trustee an opinion of an independent investment banking firm of national
standing stating that the transaction or series of transactions is fair to the
Company or such Restricted Subsidiary; provided, however, that this provision
shall not apply to any transaction with an officer or director of the Company
entered into in the ordinary course of business (including compensation or
employee benefit arrangements with any officer or director of the Company).
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<PAGE>
SECTION 3.7. 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 Notes or the Guarantee of such
Guarantor or subordinate in right of payment to the Notes or such Guarantee to
at least the same extent as the Notes 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 Supplemental Indenture.
SECTION 3.8. Limitation on Liens.
-------------------
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, Incur, affirm or suffer to exist any Lien of
any kind upon any of its property or assets (including any intercompany notes),
owned at the date of this Supplemental Indenture or acquired after the date of
this Supplemental Indenture, or any income or profits therefrom, except if the
Notes (or a Guarantee, in the case of Liens of a Guarantor) are directly secured
equally and ratably with (or prior to in the case of Liens with respect to
Subordinated Indebtedness or Indebtedness of a Guarantor subordinated in right
of payment to any Guarantee) the obligation or liability secured by such Lien,
excluding, however, from the operation of the foregoing any of the following:
(a) any Lien existing as of the date of this Supplemental Indenture;
(b) any Lien arising by reason of (1) any judgment, decree or order of
any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have
expired; (2) taxes not yet delinquent or which are being contested in good
faith; (3) security for payment of workers' compensation or other
insurance; (4) good faith deposits in connection with tenders, leases or
contracts (other than contracts for the payment of money); (5) zoning
restrictions, easements, li-
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censes, reservations, provisions, covenants, conditions, waivers,
restrictions on the use of property or minor irregularities of title (and
with respect to leasehold interests, mortgages, obligations, liens and
other encumbrances incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased property,
with or without consent of the lessee), none of which materially impairs
the use of any parcel of property material to the operation of the business
of the Company or any Restricted Subsidiary or the value of such property
for the purpose of such business; (6) deposits to secure public or
statutory obligations, or in lieu of surety or appeal bonds; (7) certain
surveys, exceptions, title defects, encumbrances, easements, reservations
of, or rights of others for, rights of way, sewers, electric lines,
telegraph or telephone lines and other similar purposes or zoning or other
restrictions as to the use of real property not interfering with the
ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries; (8) operation of law in favor of mechanics, materialmen,
laborers, employees or suppliers, incurred in the ordinary course of
business for sums which are not yet delinquent or are being contested in
good faith by negotiations or by appropriate proceedings which suspend the
collection thereof; or (9) standard custodial, bailee or depository
arrangements (including (x) in respect of deposit accounts with banks and
other financial institutions and (y) standard customer agreements in
respect of accounts for the purchase and sale of securities and other
property with brokerage firms or other types of financial institutions);
(c) any Lien now or hereafter existing on property of the Company or
any Guarantor securing Senior Indebtedness or Senior Guarantor
Indebtedness, in each case which Indebtedness is permitted under the
provisions of Section 3.4 and provided that the provisions of Section 3.10
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 Restricted Subsidiary, in each case
which Indebtedness is permitted under the provisions of Section 3.4;
provided that any such Lien only extends to the assets that were subject to
such lien securing such Acquired Indebtedness prior to the related
transaction by the Company or its Restricted Subsidiaries; and
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(e) any extension, renewal, refinancing or replacement, in whole or in
part, of any Lien described in the foregoing clauses (a) through (d) so
long as the amount of security is not increased thereby.
SECTION 3.9. Limitation on Sale of Assets.
----------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale (other than an
Asset Swap permitted by clause (g) below of this Section 3.9) unless (i) at
least 75% of the proceeds from such Asset Sale are received in cash; provided,
however, that the amount of (A) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet or the notes thereto) of
the Company or any Restricted Subsidiary that are assumed by the transferee in
such Asset Sale and from which the Company or such Restricted Subsidiary is
released and (B) any notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are immediately converted
by the Company or such Restricted Subsidiary into cash, shall be deemed cash for
purposes of this Section 3.9, and (ii) the Company or such Restricted Subsidiary
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the shares or assets sold (other than in the case of an
involuntary Asset Sale, as determined by the Board of Directors of the Company
and evidenced in a Certified 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 12 months of the Asset Sale, invest the Net Cash
Proceeds in other properties and assets that (as determined by the Board of
Directors of the Company or the applicable Restricted Subsidiary) replace the
properties and assets that were the subject of the Asset Sale or in properties
and assets that will be used in the businesses of the Company or its Restricted
Subsidiaries as existing at such time or reasonably related thereto. The amount
of such Net Cash Proceeds neither used to permanently repay or prepay Senior
Indebtedness or Senior Guarantor Indebtedness nor used or invested as set forth
in this paragraph constitutes "Excess Proceeds."
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<PAGE>
(c) When the aggregate amount of Excess Proceeds equals $10,000,000 or
more, the Company shall apply the Excess Proceeds to the repayment of the Notes
and any Pari Passu Indebtedness required to be repurchased under the instrument
governing such Pari Passu Indebtedness as follows: (a) the Company shall make
an offer to purchase (an "Offer") from all holders of the Notes in accordance
with the procedures set forth in this Supplemental Indenture in the maximum
principal amount (expressed as a multiple of $1,000) of Notes that may be
purchased out of an amount (the "Note Amount") equal to the product of such
Excess Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Notes, and the denominator of which is the
sum of the outstanding principal amount of the Notes and such Pari Passu
Indebtedness (subject to proration in the event such amount is less than the
aggregate Offered Price (as defined below) of all Notes tendered) and (b) to the
extent required by such Pari Passu Indebtedness to permanently reduce the
principal amount of such Pari Passu Indebtedness, the Company shall make an
offer to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (a
"Pari Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the
excess of the Excess Proceeds over the Note Amount; provided that in no event
shall the Pari Passu Debt Amount exceed the principal amount of such Pari Passu
Indebtedness plus the amount of any premium required to be paid to repurchase
such Pari Passu Indebtedness. The offer price shall be payable in cash in an
amount equal to 100% of the principal amount of the Notes plus accrued and
unpaid interest, if any, to the date (the "Offer Date") such Offer is
consummated (the "Offered Price"), in accordance with the procedures set forth
in this Supplemental Indenture. To the extent that the aggregate Offered Price
of the Notes tendered pursuant to the Offer is less than the Note Amount
relating thereto or the aggregate amount of Pari Passu Indebtedness that is
purchased is less than the Pari Passu Debt Amount (the amount of such shortfall,
if any, constituting a "Deficiency"), the Company shall use such Deficiency in
the business of the Company and its Restricted Subsidiaries. Upon completion of
the purchase of all the Notes tendered pursuant to an Offer and the purchase of
the Pari Passu Indebtedness pursuant to a Pari Passu Offer, the amount of Excess
Proceeds, if any, shall be reset at zero.
(d) If the Company becomes obligated to make an Offer pursuant to
clause (c) above, the Notes shall be purchased by the Company, at the option of
the holder thereof, in whole or in part in integral multiples of $1,000, on a
date that is not earlier than 45 days and not later than 60 days from the
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date the notice is given to holders, or such later date as may be necessary for
the Company to comply with the requirements under the Exchange Act, subject to
proration in the event the Note Amount is less than the aggregate Offered Price
of all Notes tendered.
(e) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
(f) The Company will not, and will not permit any Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions existing under (i) Indebtedness as in effect on the date of this
Supplemental Indenture as such Indebtedness may be refinanced from time to time,
provided that such restrictions are no less favorable to the Holders of Notes
than those existing on the date of this Supplemental Indenture 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 Notes or, if
such Offer is made, to pay for the Notes tendered for purchase.
(g) The Company will not, and will not permit any Restricted
Subsidiary to, engage in any Asset Swaps, unless: (i) at the time of entering
into such Asset Swap, and immediately after giving effect to such Asset Swap, no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof; (ii) in the event such Asset Swap involves an
aggregate amount in excess of $10.0 million, the terms of such Asset Swap have
been approved by a majority of the members of the board of directors of the
Company which determination shall include a determination that the Fair Market
Value of the assets being received in such swap are at least equal to the Fair
Market Value of the assets being swapped and (iii) in the event such Asset Swap
involves an aggregate amount in excess of $20.0 million, the Company has also
received a written opinion from an independent investment banking firm of
nationally recognized standing that such Asset Swap is fair to the Company or
such Restricted Subsidiary, as the case may be, from a financial point of view.
(h) Subject to paragraphs (c) and (f) above, within 30 days after the
date on which the amount of Excess Proceeds equals or exceeds $10,000,000, the
Company shall send or cause to be sent by first-class mail, postage prepaid, to
the Trustee
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and to each Holder of the Notes, at its address appearing in the Security
Register, a notice stating or including:
(1) that the Holder has the right to require the Company to
repurchase, subject to proration, such Holder's Notes at the Offered Price;
(2) the Offer Date;
(3) the instructions a Holder must follow in order to have its Notes
purchased in accordance with paragraph (c) of this Section; and
(4) (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on
Form 8-K of the Company filed subsequent to such Quarterly Report, other
than Current Reports describing Asset Sales otherwise described in the
offering materials (or corresponding successor reports) (or in the event
the Company is not required to prepare any of the foregoing Forms, the
comparable information required pursuant to Section 3.15), (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 Notes purchased hereunder will be
required to surrender such Notes at the address specified in the notice at least
three Business Days prior to the Offer Date. Holders will be entitled to
withdraw their election to have their Notes purchased pursuant to this Section
3.9 if the Company receives, not later than three Business Days prior to the
Offer Date, a telegram, telex, facsimile transmission or letter setting forth
(1) the name of the Holder, (2) the certificate number of the Note in respect of
which such notice of withdrawal is being submitted, (3) the principal amount of
the Note (which shall be $1,000 or an integral multiple thereof) delivered for
purchase by the Holder as to which its election is to be withdrawn, (4) a
statement that such Holder is withdrawing its election to have such principal
amount of such Note purchased, and (5) the principal amount, if any, of such
Note (which shall be $1,000 or an integral multiple thereof) that remains
subject to the original notice of the Of-
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<PAGE>
fer and that has been or will be delivered for purchase by the Company.
(j) The Company shall (i) not later than the Offer Date, accept for
payment Notes or portions thereof tendered pursuant to the Offer, (ii) not later
than 10:00 a.m. (New York time) on the Offer Date, deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 4.8 of the Indenture) an
amount of money in same day funds (or New York Clearing House funds if such
deposit is made prior to the Offer Date) sufficient to pay the aggregate Offered
Price of all the Notes or portions thereof which are to be purchased on that
date and (iii) not later than the Offer Date, deliver to the Paying Agent (if
other than the Company) an Officers' Certificate stating the Notes or portions
thereof accepted for payment by the Company.
Subject to applicable escheat laws, as provided in the Notes, the
Trustee and the Paying Agent shall return to the Company any cash that remains
unclaimed, together with interest, if any, thereon, held by them for the payment
of the Offering Price; provided, however, that, (x) to the extent that the
aggregate amount of cash deposited by the Company with the Trustee in respect of
an Offer exceeds the aggregate Offered Price of the Notes or portions thereof to
be purchased, then the Trustee shall hold such excess for the Company and (y)
unless otherwise directed by the Company in writing, promptly after the Business
Day following the Offer Date the Trustee shall return any such excess to the
Company together with interest or dividends, if any, thereon.
(k) Notes to be purchased shall, on the Offer Date, become due and
payable at the Offered Price and from and after such date (unless the Company
shall default in the payment of the Offered Price) such Notes shall cease to
bear interest. Such Offered Price shall be paid to such Holder promptly
following the later of the Offer Date and the time of delivery of such Note to
the relevant Paying Agent at the office of such Paying Agent by the Holder
thereof in the manner required. Upon surrender of any such Note for purchase in
accordance with the foregoing provisions, such Note shall be paid by the Company
at the Offered Price; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Offer Date shall be payable to the Holders
of such Notes, registered as such on the relevant record dates according to the
terms and the provisions of Section 2.12 of the Indenture and Section 2.3 of
this Supplemental Indenture; provided, further, that Notes
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to be purchased are subject to proration in the event the Excess Proceeds are
less than the aggregate Offered Price of all Notes tendered for purchase, with
such adjustments as may be appropriate by the Trustee so that only Notes in
denominations of $1,000 or integral multiples thereof, shall be purchased. If
any Note tendered for purchase shall not be so paid upon surrender thereof by
deposit of funds with the Trustee or a Paying Agent in accordance with paragraph
(j) above, the principal thereof (and premium, if any, thereon) shall, until
paid, bear interest from the Offer Date at the rate borne by such Note. Any Note
that is to be purchased only in part shall be surrendered to a Paying Agent at
the office of such Paying Agent (with, if the Company, the note registrar
designated pursuant to Section 4.2 of the Indenture or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the note registrar or the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without service charge, one or more new Notes of any authorized
denomination as requested by such Holder in an aggregate principal amount equal
to, and in exchange for, the portion of the principal amount of the Note so
surrendered that is not purchased.
SECTION 3.10. Limitation on Guarantees by
Restricted Subsidiaries.
---------------------------
In the event the Company (i) organizes or acquires any Domestic
Restricted Subsidiary after the Issue Date that is not a Guarantor and causes or
permits such Restricted Subsidiary to, directly or indirectly, guarantee the
payment of any Indebtedness ("Other Indebtedness") of the Company or any
Guarantor or (ii) causes or permits any Foreign Restricted Subsidiary that is
not a Guarantor to, directly or indirectly, guarantee the payment of any Other
Indebtedness, then, in each case the Company shall cause such Restricted
Subsidiary to simultaneously execute and deliver a supplemental indenture to the
Indenture pursuant to which it will become a Guarantor under the Indenture;
provided, however, that in the event a Domestic Restricted Subsidiary is
acquired in a transaction in which a merger agreement is entered into, such
Domestic Restricted Subsidiary shall not be required to execute and deliver such
supplemental indenture until the consummation of the merger contemplated by any
such merger agreement; provided, further, that if such Other Indebtedness is (i)
Indebtedness that is ranked pari passu in right of payment with the Notes or the
Guarantees of such Restricted Subsidiary, as the case may be, the Guaran-
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<PAGE>
tee of such Restricted Subsidiary shall be pari passu in right of payment with
the guarantee of the Other Indebtedness; or (ii) Subordinated Indebtedness, the
Guarantees of such Restricted Subsidiary shall be senior in right of payment to
the guarantee of the Other Indebtedness (which guarantee of such Subordinated
Indebtedness shall provide that such guarantee is subordinated to the Guarantees
of such Subsidiary to the same extent and in the same manner as the Other
Indebtedness is subordinated to the Notes or the Guarantee of such Restricted
Subsidiary, as the case may be). Within 120 days of the Issue Date, the Company
will cause Canandaigua, B.V. to become a Guarantor under the Indenture.
If the Notes are defeased in accordance with the terms of Article Four
of this Supplemental Indenture, or if, subject to the requirements of Article
Six of this Supplemental Indenture, all or substantially all of the assets of
any Guarantor or all of the Capital Stock of any Guarantor are sold (including
by issuance or otherwise) by the Company in a transaction constituting an Asset
Sale, and if (x) the Net Cash Proceeds from such Asset Sale are used in
accordance with Section 3.9 or (y) the Company delivers to the Trustee an
Officers' Certificate to the effect that the Net Cash Proceeds from such Asset
Sale shall be used in accordance with Section 3.9 and within the time limits
specified by such Section, then such Guarantor or the Guarantors, as the case
may be (in the event of a defeasance of the Notes or sale or other disposition
of all of the Capital Stock of such Guarantor), or the corporation acquiring
such assets (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) shall be released and discharged of its
Guarantee obligations in respect of the Indenture, the Supplemental Indenture
and the Notes.
Any Guarantor that is designated an Unrestricted Subsidiary pursuant
to and in accordance with Section 3.14 shall upon such Designation be released
and discharged of its Guarantee obligations in respect of the Indenture, the
Supplemental Indenture and the Notes and any Unrestricted Subsidiary whose
Designation is revoked pursuant to Section 3.14 will be required to become a
Guarantor in accordance with Article Ten.
In addition, a Guarantee of a Guarantor shall be released upon the
sale or transfer of all or substantially all of the assets or all of the Capital
Stock of such Guarantor; provided, that either (i) such sale or transfer
--------
complies with the provisions set forth in Section 3.9 or (ii) such sale or
transfer need not comply with the provisions set forth in Section
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3.9 because the Capital Stock so sold or transferred does not constitute an
"Asset Sale" by operation of the provision in clause (y) of the last sentence of
the definition of Asset Sale.
SECTION 3.11. Purchase of Notes upon a Change
of Control.
-------------------------------
(a) If a Change of Control shall occur at any time, then each Holder
of Notes shall have the right to require that the Company purchase such Holder's
Notes in whole or in part in integral multiples of $1,000, at a purchase price
(the "Change of Control Purchase Price") in cash in an amount equal to 101% of
the principal amount of such Notes, plus accrued and unpaid interest, if any, to
the date of purchase (the "Change of Control Purchase Date"), pursuant to the
offer described in subsection (b) of this Section (the "Change of Control
Offer") and in accordance with the procedures set forth in subsections (b), (c),
(d) and (e) of this Section.
(b) Within 15 days following any Change of Control, the Company shall
notify the Trustee thereof 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 its 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 Notes at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro forma
historical income, cash flow and capitalization after giving effect to such
Change of Control, if any);
(3) (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q, as applicable, and any
Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report (or in the event the Company is not required to prepare
any of the foregoing Forms, the comparable information required to be
prepared by the Company and any Guarantor pursuant to Section 3.15), (ii) a
description of material developments in the Company's busi-
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<PAGE>
ness subsequent to the date of the latest of such reports and (iii) such
other information, if any, concerning the business of the Company which the
Company in good faith believes will enable such Holders to make an informed
investment decision;
(4) that the Change of Control Offer is being made pursuant to this
Section 3.11 and that all Notes properly tendered pursuant to the Change of
Control Offer will be accepted for payment at the Change of Control
Purchase Price;
(5) the Change of Control Purchase Date, which shall be a Business Day
no earlier than 30 days nor later than 60 days from the date such notice is
mailed, or such later date as is necessary to comply with requirements
under the Exchange Act;
(6) the Change of Control Purchase Price;
(7) the names and addresses of the Paying Agent and the offices or
agencies referred to in Section 4.2 of the Indenture;
(8) that Notes must be surrendered on or prior to the Change of
Control Purchase Date to the Paying Agent at the office of the Paying Agent
or to an office or agency referred to in Section 4.2 of the Indenture to
collect payment;
(9) that the Change of Control Purchase Price for any Note which has
been properly tendered and not withdrawn will be paid promptly following
the Change of Control Offer Purchase Date;
(10) the procedures for withdrawing a tender of Notes and Change of
Control Purchase Notice;
(11) that any Note not tendered will continue to accrue interest; and
(12) that, unless the Company defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date.
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<PAGE>
(c) Upon receipt by the Company of the proper tender of Notes, the
Holder of the Note in respect of which such proper tender was made shall (unless
the tender of such Note is properly withdrawn) thereafter be entitled to receive
solely the Change of Control Purchase Price with respect to such Note. Upon
surrender of any such Note for purchase in accordance with the foregoing
provisions, such Note shall be paid by the Company at the Change of Control
Purchase Price; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Change of Control Purchase Date shall be payable
to the Holders of such Notes registered as such on the relevant record dates
according to the terms and the provisions of Section 2.3. If any Note tendered
for purchase shall not be so paid upon surrender thereof, the principal thereof
(and premium, if any, thereon) shall, until paid, bear interest from the Change
of Control Purchase Date at the rate borne by such Note. Holders electing to
have Notes purchased will be required to surrender such Notes to the Paying
Agent at the address specified in the Change of Control Purchase Notice at least
two Business Days prior to the Change of Control Purchase Date. Any Note that
is to be purchased only in part shall be surrendered to a Paying Agent at the
office of such Paying Agent (with, if the Company, the note registrar designated
pursuant to Section 4.2 of the Indenture or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the note registrar or the Trustee, 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 Note, without service charge, one or more new Notes of any
authorized denomination as requested by such Holder in an aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of the
Note so surrendered that is not purchased.
(d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (ii) not later than 11:00 a.m. (New York time) on
the Change of Control Purchase Date, deposit with the Paying Agent an amount of
cash sufficient to pay the aggregate Change of Control Purchase Price of all the
Notes or portions thereof which are to be purchased as of the Change of Control
Purchase Date and (iii) not later than the Change of Control Pur-
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<PAGE>
chase Date, deliver to the Paying Agent an Officers' Certificate stating the
Notes or portions thereof accepted for payment by the Company. The Paying Agent
shall promptly mail or deliver to Holders of Notes so accepted payment in an
amount equal to the Change of Control Purchase Price of the Notes purchased from
each such Holder, and the Company shall execute and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in principal
amount to any unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by the Paying Agent at the
Company's expense to the Holder thereof. The Company will publicly announce the
results of the Change of Control Offer on the Change of Control Purchase Date.
For purposes of this Section 3.11, the Company shall choose a Paying Agent which
shall not be the Company.
(e) A Change of Control Purchase Notice may be withdrawn before or
after delivery by the Holder to the Paying Agent at the office of the Paying
Agent of the Note to which such Change of Control Purchase Notice relates, by
means of a written notice of withdrawal delivered by the Holder to the Paying
Agent at the office of the Paying Agent or to the office or agency referred to
in Section 4.2 of the Indenture to which the related Change of Control Purchase
Notice was delivered not later than three Business Days prior to the Change of
Control Purchase Date specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Note in respect of which such notice
of withdrawal is being submitted;
(3) the principal amount of the Note (which shall be $1,000 or an
integral multiple thereof) delivered for purchase by the Holder as to which
such notice of withdrawal is being submitted; and
(4) the principal amount, if any, of such Note (which shall be $1,000
or an integral multiple thereof) that remains subject to the original
Change of Control Purchase Notice and that has been or will be delivered
for purchase by the Company.
(f) Subject to applicable escheat laws, as provided in the Notes, the
Trustee and the Paying Agent shall return to the Company any cash that remains
unclaimed, together with interest or dividends, if any, thereon, held by them
for the payment of the Change of Control Purchase Price; provided, however,
that, (x) to the extent that the aggregate amount of cash deposited by the
Company pursuant to clause (ii) of paragraph (d) above exceeds the aggregate
Change of Control Purchase Price of the Notes or portions thereof to be
purchased, then
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<PAGE>
the Trustee shall hold such excess for the Company and (y) unless otherwise
directed by the Company in writing, promptly after the Business Day following
the Change of Control Purchase Date the Trustee shall return any such excess to
the Company together with interest, if any, thereon.
(g) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with a Change of Control Offer.
(h) The Company will not, and will not permit any Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions existing under Indebtedness as in effect on the date of this
Supplemental Indenture) that would materially impair the ability of the Company
to make a Change of Control Offer to purchase the Notes or, if such Change of
Control Offer is made, to pay for the Notes tendered for purchase.
SECTION 3.12. Limitation on Restricted
Subsidiary Capital Stock.
------------------------
The Company will not permit any Restricted Subsidiary of the Company
to issue any Capital Stock, except for (i) Capital Stock issued to and held by
the Company or a Wholly Owned Restricted Subsidiary, (ii) Capital Stock issued
by a Person prior to the time (A) such Person becomes a Restricted Subsidiary,
(B) such Person merges with or into a Restricted Subsidiary or (C) a Restricted
Subsidiary merges with or into such Person, provided that such Capital Stock was
not issued or incurred by such Person in anticipation of the type of transaction
contemplated by subclauses (A), (B) or (C), and (iii) Capital Stock issued or
sold by a Restricted Subsidiary where, immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary.
SECTION 3.13. Limitation on Dividends and Other
Payment Restrictions Affecting
Restricted Subsidiaries.
---------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (i) pay dividends or make any other
distribution on its Capital Stock, (ii) pay any Indebtedness
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<PAGE>
owed to the Company or a Restricted Subsidiary of the Company, (iii) make any
Investment in the Company or a Restricted Subsidiary of the Company or (iv)
transfer any of its properties or assets to the Company or any Restricted
Subsidiary, except (a) any encumbrance or restriction pursuant to an agreement
in effect on the date of this Supplemental Indenture; (b) any encumbrance or
restriction, with respect to a Restricted Subsidiary that was not a Restricted
Subsidiary of the Company on the date of this Supplemental Indenture, in
existence at the time such Person becomes a Restricted Subsidiary of the Company
and, in the case of clauses (a) and (b), not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary; (c) any
encumbrance or restriction existing under any agreement that extends, renews,
refinances or replaces the agreements containing the encumbrances or
restrictions in the foregoing clauses (a) and (b), or in this clause (c),
provided that the terms and conditions of any such encumbrances or restrictions
are not materially less favorable to the holders of the Notes than those under
or pursuant to the agreement evidencing the Indebtedness so extended, renewed,
refinanced or replaced (except that an encumbrance or restriction that is not
more restrictive than those set forth in this Supplemental Indenture shall in
any event be permitted hereunder); and (d) any encumbrance or restriction
created pursuant to an asset sale agreement, stock sale agreement or similar
instrument pursuant to which an Asset Sale permitted under Section 3.9 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 3.14. Designation of Unrestricted
Subsidiaries.
---------------------------
The Company may designate after the Issue Date any Subsidiary of the
Company as an "Unrestricted Subsidiary" under this Supplemental Indenture (a
"Designation") only if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
(ii) at the time of and after giving effect to such Designation, the
Company could Incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the Consolidated Fixed Charge Coverage Ratio of the
first paragraph of Section 3.4(a); and
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(iii) the Company would be permitted to make an Investment (other
than a Permitted Investment) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to Section 3.5(a) above in an
amount (the "Designation Amount") equal to the amount of the Company's
Investment in such Subsidiary on such date.
Neither the Company nor any Restricted Subsidiary shall at any time
(x) provide credit support for, subject any of its property or assets (other
than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of,
or guarantee, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness) or (y) be
directly or indirectly liable for any Indebtedness of any Unrestricted
Subsidiary. For purposes of the foregoing, the Designation of a Subsidiary of
the Company as an Unrestricted Subsidiary shall be deemed to include the
Designation of all of the Subsidiaries of such Subsidiary.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") only if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of the
Indenture.
All Designations and Revocations must be evidenced by resolutions of
the Board of Directors of the Company, delivered to the Trustee certifying
compliance with the foregoing provisions.
SECTION 3.15. 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
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file such documents if the Company were so subject. The Company will also in any
event (x) within 15 days of each Required Filing Date (i) transmit by mail to
all Holders, as their names and addresses appear in the security register,
without cost to such Holders and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company would have been
required to file with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act if the Company were subject to such Sections and (y) if filing such
documents by the Company with the Commission is not permitted under the Exchange
Act, promptly upon written request and payment of the reasonable cost of
duplication and delivery, supply copies of such documents to any prospective
Holder at the Company's cost.
SECTION 3.16. Statement by Officers as to
Default.
---------------------------
(a) The Company will deliver to the Trustee, on or before a date not
more than 60 days after the end of each fiscal quarter and not more than 120
days after the end of each fiscal year of the Company ending after the date
hereof, a written statement signed by two executive officers of the Company, one
of whom shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating whether or not, after a
review of the activities of the Company during such year or such quarter and of
the Company's performance under this Supplemental Indenture and the Indenture,
to the best knowledge, based on such review, of the signers thereof, the Company
has fulfilled all its obligations and is in compliance with all conditions and
covenants under this Supplemental Indenture and the Indenture throughout such
year or quarter, as the case may be, and, if there has been a Default specifying
each Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Restricted Subsidiary
gives any notice or takes any other action with respect to a claimed default
(other than with respect to Indebtedness in the principal amount of less than
$10,000,000), the Company shall deliver to the Trustee by registered or
certified mail or facsimile transmission followed by hard copy an Officers'
Certificate specifying such Default, Event of Default, notice or other action
within five Business Days of its occurrence.
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SECTION 3.17. Waiver of Certain Covenants.
---------------------------
The Company may omit in a particular instance to comply with any
covenant or condition set forth in Sections 3.1 through 3.15, if, before or
after the time for such compliance, the Holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding or shall, by Act
of such Holders, waive such compliance in such instance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
---------------------------------------
The following provisions of this Article Four shall apply to the Notes
(but not with respect to any other series of Debt Securities) and shall replace
(solely with respect to the Notes and not with respect to any other series of
Debt Securities) in its entirety the provisions set forth in Article VI of the
Indenture.
SECTION 4.1. Satisfaction and Discharge of
Indenture.
-----------------------------
This Supplemental Indenture and the Indenture (solely with respect to
the Notes and not with respect to any other series of Debt Securities) shall
cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of the Notes herein expressly provided for) and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Supplemental
Indenture and the Indenture (solely with respect to the Notes and not with
respect to any other series of Debt Securities), when
(a) either
(1) all the Notes theretofore authenticated and delivered (other
than (i) Notes which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.13 of the
Indenture
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or (ii) all Notes for whose payment United States dollars have
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 4.8 of the Indenture) have been
delivered to the Trustee cancelled or for cancellation; or
(2) all such Notes 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 such purpose an
amount in United States dollars sufficient to pay and discharge the
entire Indebtedness on the Notes not theretofore delivered to the
Trustee 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 relating to the satisfaction and discharge of this Supplemental
Indenture and the Indenture have been complied with and (ii) such
satisfaction and discharge will not result in a breach or violation of, or
constitute a default under, this Supplemental Indenture, the Indenture or
any other material agreement or instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound.
Opinions of Counsel required to be delivered under this Section 4.1
may have qualifications customary for opinions of the type required and counsel
delivering such opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, in-
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cluding that various financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Supplemental
Indenture and the Indenture, the obligations of the Company to the Trustee under
Section 11.2 of the Indenture and, if United States dollars shall have been
deposited with the Trustee pursuant to subclause (2) of Subsection (a) of this
Section 4.1, the obligations of the Trustee under Section 4.2 and Section 4.8 of
the Indenture shall survive.
SECTION 4.2. Application of Trust Money.
--------------------------
Subject to the provisions of Section 4.8 of the Indenture, all United
States dollars deposited with the Trustee pursuant to Section 4.1 shall be held
in trust and applied by it, in accordance with the provisions of the Notes, the
Indenture and this Supplemental Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
of, premium, if any, and interest on the Notes for whose payment such United
States dollars have been deposited with the Trustee, but such money need not be
segregated from other funds except to the extent required by law or GAAP.
SECTION 4.3. Termination of Company's
Obligations.
------------------------
Subject to the provisions of Section 7.14 with respect to the creation
of the defeasance trust provided for in the following clause (i), the Company
may, provided that no Default or Event of Default has occurred and is continuing
or would arise therefrom (or, with respect to a Default or Event of Default
specified in Section 5.1(g) or (h), occurs at any time on or prior to the 91st
calendar day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 91st day)) and provided
that no default under any Senior Indebtedness would result therefrom, terminate
its and its Restricted Subsidiaries' substantive obligations in respect of
Article Three of this Supplemental Indenture (other than Sections 3.15 and 3.16)
and Article Four of the Indenture (other than Sections 4.1, 4.2, and 4.3) and
Article Six hereof and any Event of Default specified in Section 5.1(c) or (d)
by (i) depositing with the Trustee, under the terms of an irrevocable trust
agreement, money in United States dollars or United States Government
Obligations (or a combination thereof) sufficient (without reinvestment) to
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pay all remaining Indebtedness on the Notes, (ii) delivering to the Trustee
either an Opinion of Counsel or a ruling directed to the Trustee from the United
States Internal Revenue Service to the effect that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and termination of obligations, (iii) delivering to the Trustee an
Opinion of Counsel to the effect that the Company's exercise of its option under
this Section 4.3 will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" under the Investment Company Act of
1940, as amended (the "Investment Company Act"), and (iv) delivering to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating
compliance with all conditions precedent provided for herein. In addition,
subject to the provisions of Section 7.14 with respect to the creation of the
defeasance trust provided for in the following clause (i), the Company may,
provided that no Default or Event of Default has occurred and is continuing or
would arise therefrom (or, with respect to a Default or Event of Default
specified in Section 5.01(h) or (i), occurs at any time on or prior to the 91st
calendar day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 91st day)) and provided
that no default under any Senior Indebtedness would arise therefrom, terminate
all of its and the Guarantors' substantive obligations in respect of the Notes
(including its obligations to pay the principal of and interest on the Notes and
the Guarantors' Guarantee thereof) by (i) depositing with the Trustee, under the
terms of an irrevocable trust agreement, money in United States dollars or
United States Government Obligations sufficient (without reinvestment) to pay
all remaining Indebtedness on the Notes, (ii) delivering to the Trustee either a
ruling directed to the Trustee from the United States Internal Revenue Service
to the effect that the Holders of the Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and termination
of obligations or an Opinion of Counsel addressed to the Trustee based upon such
a ruling or based on a change in the applicable Federal tax law since the date
of this Supplemental Indenture to such effect, (iii) delivering to the Trustee
an Opinion of Counsel to the effect that the Company's exercise of its option
under this Section 4.1 will not result in any of the Company, the Trustee or the
trust created by the Company's deposit of funds pursuant to this provision
becoming or being deemed to be an "investment company" under the Investment
Company Act and (iv) delivering to the Trustee an Officers' Certificate and an
Opinion of Coun-
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sel each stating compliance with all conditions precedent provided for herein.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.4, 2.6, 2.8, 2.9, 2.10, 2.12, 2.13, 4.1, 4.2, 11.2 and 11.6 of the
Indenture and Sections 4.4, 4.5 and 5.1 of this Supplemental Indenture shall
survive until the Notes are no longer outstanding. Thereafter, the Company's
obligations in Sections 4.4, 4.5 and 4.6 of this Supplemental Indenture shall
survive and Section 11.2 of the Indenture shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Notes, this Supplemental Indenture and the Indenture
except for those surviving obligations specified above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 4.3 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of outstanding Notes.
SECTION 4.4. Application of Trust Money.
--------------------------
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 4.3, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Supplemental Indenture and the Indenture solely to the
payment of principal of and interest on the Notes.
SECTION 4.5. Repayment to Company.
--------------------
Subject to Section 11.2 of the Indenture and Section 4.3 of this
Supplemental Indenture, the Trustee shall promptly pay to the Company upon
written request any excess money held by it at any time. The Trustee shall pay
to the Company upon written request any money held by it for the payment of
principal or interest that remains unclaimed for two years; provided, however,
that the Trustee before being required to make any payment may at the expense of
the Company cause to be published once in a newspaper of general circulation in
The City of New York or mail to each Holder entitled to such money notice that
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such money remains unclaimed and that, after a date specified therein which
shall be at least 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining shall be repaid to the Company.
After payment to the Company, Holders entitled to money must look solely to the
Company for payment as general creditors unless an applicable abandoned property
law designates another person and all liability of the Trustee or Paying Agent
with respect to such money shall thereupon cease.
SECTION 4.6. Reinstatement.
-------------
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 4.3 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and the Guarantors' obligations under this Supplemental Indenture, the
Indenture, the Notes and the Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 4.3 until such time as the
Trustee is permitted to apply all such money or United States Government
Obligations in accordance with Section 4.3; provided, however, that if the
Company has made any payment of interest on or principal of any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
United States Government Obligations held by the Trustee.
ARTICLE FIVE
REMEDIES
The following provisions of this Article Five apply to the Notes (but
not with respect to any other series of Debt Securities) and shall replace in
its entirety Section 7.1 of the Indenture. To the extent any provisions of this
Article Five are inconsistent or conflict with any provisions contained in
Article Seven of the Indenture the provisions of this Article Five shall govern
with respect to the Notes (but not with respect to any other series of Debt
Securities).
SECTION 5.1. Events of Default.
-----------------
Whenever used herein or in the Indenture, an "Event of Default" means
any one of the following events (whatever the
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reason for such Event of Default and whether it shall be occasioned by the
provisions of Article Seven or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on any
Note when it becomes due and payable, and such default shall continue for a
period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Note at its Maturity (upon acceleration, optional
or mandatory redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of
any covenant or agreement of the Company or any Guarantor under the
Indenture or this Supplemental Indenture (other than a default in the
performance, or breach, of a covenant or agreement which is specifically
dealt with in clauses (a) or (b) or in clauses (ii), (iii) and (iv) of this
clause (c)) and such default or breach shall continue for a period of 30
days after written notice has been given, by certified mail, (x) to the
Company by the Trustee or (y) to the Company and the Trustee by the holders
of at least 25% in aggregate principal amount of the outstanding Notes,
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; (ii) there
shall be a default in the performance or breach of the provisions of
Article Six; (iii) the Company shall have failed to make or consummate an
Offer in accordance with the provisions of Section 3.9; or (iv) the Company
shall have failed to make or consummate a Change of Control Offer in
accordance with the provisions of Section 3.11;
(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
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by the Indenture, this Supplemental Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money
in excess of $15,000,000 either individually or in the aggregate (net of
amounts covered by insurance, bond, surety or similar instrument), shall be
entered against the Company, any Guarantor, any Subsidiary or any of their
respective properties and shall not be discharged and either (a) any
creditor shall have commenced an enforcement proceeding upon such judgment,
order or decree or (b) there shall have been a period of 60 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of an appeal or otherwise, shall not be in effect;
(g) any holder or holders of at least $10,000,000 in aggregate
principal amount of Indebtedness of the Company, any Guarantor or any
Subsidiary after a default under such Indebtedness shall notify the Trustee
of the intended sale or disposition of any assets of the Company, any
Guarantor or any Subsidiary that have been pledged to or for the benefit of
such holder or holders to secure such Indebtedness or shall commence
proceedings, or take any action (including by way of set-off), to retain in
satisfaction of such Indebtedness or to collect on, seize, dispose of or
apply in satisfaction of Indebtedness, assets of the Company, any Guarantor
or any Subsidiary (including funds 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
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shall be unstayed and in effect, for a period of 60 consecutive days; or
(i) (i) the Company, any Guarantor or any Subsidiary commences a
voluntary case or proceeding under any applicable Bankruptcy Law or any
other case or proceeding to be adjudicated bankrupt or insolvent, (ii) the
Company, any Guarantor or any Subsidiary consents to the entry of a decree
or order for relief in respect of the Company, any Guarantor or such
Subsidiary in an involuntary case or proceeding under any applicable
Bankruptcy Law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, (iii) the Company, any Guarantor or any
Subsidiary files a petition or answer or consent seeking reorganization or
relief under any applicable federal or state law, (iv) the Company, any
Guarantor or any Subsidiary (1) consents to the filing of such petition or
the appointment of, or taking possession by, a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company, any Guarantor or such Subsidiary or of any substantial part of
their respective properties, (2) makes an assignment for the benefit of
creditors or (3) admits in writing its inability to pay its debts generally
as they become due, or (v) the Company, any Guarantor or any Subsidiary
takes any corporate action in furtherance of any such actions in this
paragraph (i).
The Company shall deliver to the Trustee within five days after the
occurrence thereof, written notice, in the form of an Officers' Certificate, of
any Default, its status and what action the Company is taking or proposes to
take with respect thereto.
SECTION 5.2. Acceleration of Maturity;
Rescission and Annulment.
-------------------------
If an Event of Default (other than an Event of Default specified in
Sections 5.1(h) and (i)) shall occur and be continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Notes then
outstanding may, and the Trustee at the request of the Holders of not less than
25% in aggregate principal amount of the Notes then outstanding shall, declare
all unpaid principal of, premium, if any, and accrued interest on all the Notes
to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by the Holders of the Notes); provided that so long as the
Credit Agreement is in effect, such declaration
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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 Notes by appropriate judicial proceeding. If an
Event of Default specified in clause (h) or (i) of Section 5.1 occurs and is
continuing, then all the Notes shall ipso facto become and be immediately due
and payable, in an amount equal to the principal amount of the Notes, together
with accrued and unpaid interest, if any, to the date the Notes become due and
payable, without any declaration or other act on the part of the Trustee or any
Holder. 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 Notes outstanding, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under Section
11.2 of the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Notes, and
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes;
(b) all Events of Default, other than the non-payment of principal of
the Notes which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 7.5 of the Indenture; and
(c) the rescission will not conflict with any judgment or decree.
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No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
ARTICLE SIX
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
-----------------------------
The following provisions of this Article Six apply to the Notes (but
not with respect to any other series of Debt Securities) and shall replace in
its entirety Section 10.1 of the Indenture as it applies to the Notes (but not
with respect to any other series of Debt Securities).
SECTION 6.1. Company or Any Guarantor May
Consolidate, etc., Only on
Certain Terms.
----------------------------
(a) The Company shall not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into any other
Person or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to any Person or
group of affiliated Persons, or permit any of its Restricted Subsidiaries to
enter into any such transaction or transactions if such transaction or
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposal of all or substantially all of the properties and
assets of the Company and its Restricted Subsidiaries on a Consolidated basis to
any other Person or group of affiliated Persons, unless at the time and after
giving effect thereto:
(i) either (a) the Company shall be the continuing corporation, or
(b) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company and its
Restricted Subsidiaries on a Consolidated basis (the "Surviving Entity")
shall be a corporation duly organized and validly existing under the laws
of the United States of America, any state thereof or the District of
Columbia and such Person assumes, by a supplemental indenture in a form
reasonably satisfactory to the Trustee, all the obligations of the Company
under the Notes, the Inden-
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ture and this Supplemental Indenture shall remain in full force and effect;
(ii) immediately before and immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such transaction on a pro
forma basis, the Consolidated Net Worth of the Company (or the Surviving
Entity if the Company is not the continuing obligor under this Supplemental
Indenture and the Indenture) is equal to or greater than the Consolidated
Net Worth of the Company immediately prior to such transaction;
(iv) immediately before and immediately after giving effect to
such transaction on a pro forma basis (on the assumption that the
transaction occurred on the first day of the four-quarter period
immediately prior to the consummation of such transaction with the
appropriate adjustments with respect to the transaction being included in
such pro forma calculation), the Company (or the Surviving Entity if the
Company is not the continuing obligor under the Indenture and this
Supplemental Indenture) could incur $1.00 of additional Indebtedness under
Section 3.4 (other than Permitted Indebtedness);
(v) each Guarantor, if any, unless it is the other party to the
transactions described above, shall have by supplemental indenture
confirmed that its Guarantee shall apply to such Person's obligations under
the Indenture, this Supplemental Indenture and the Notes;
(vi) if any of the property or assets of the Company or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of Section 3.8 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 the Indenture and
this Supplemental Indenture and that all conditions precedent therein or
herein provided for relating to such transaction have been complied with.
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(b) Each Guarantor shall not, and the Company will not permit a
Guarantor to, in a single transaction or through a series of related
transactions, merge or consolidate with or into any other corporation (other
than the Company or any other Guarantor) or other entity, or sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of its
properties and assets on a consolidated basis to any entity (other than the
Company or any other Guarantor) unless at the time and after giving effect
thereto:
(i) either (1) such Guarantor shall be the continuing corporation
or partnership or (2) the entity (if other than such Guarantor) formed by
such consolidation or into which such Guarantor is merged or the entity
which acquires by sale, assignment, conveyance, transfer, lease or
disposition the properties and assets of such Guarantor shall be a
corporation duly organized and validly existing under the laws of the
United States, any state thereof or the District of Columbia and shall
expressly assume by an indenture supplemental hereto, executed and
delivered to the Trustee, in a form reasonably satisfactory to the Trustee,
all the obligations of such Guarantor under its Guarantee, the Indenture
and this Supplemental Indenture;
(ii) immediately before and immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; and
(iii) such Guarantor shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or
disposition and such supplemental indenture comply with the Indenture and
this Supplemental Indenture, and thereafter all obligations of the
predecessor shall terminate.
The provisions of this Section 6.1(b) shall not apply to any transaction
(including any Asset Sale made in accordance with Section 3.9) with respect to
any Guarantor (i) if the Guarantee of such Guarantor is released in connection
with such transaction in accordance with the last sentence of Section 3.10 or
(ii) if such transaction need not comply with the provisions set forth in
Section 3.9 because the properties or assets so sold, assigned, conveyed,
transferred, leased or otherwise disposed of do not constitute an "Asset Sale"
by operation of the provisions of clause (y) of the last sentence of the
definition of Asset Sale.
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SECTION 6.2. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Guarantor (except, in the case of a Guarantor,
pursuant to a transaction set forth in the last paragraph of Section 6.1 (b)) in
accordance with Section 6.1, the successor Person formed by such consolidation
or into which the Company or such Guarantor, as the case may be, is merged or
the successor Person to which such sale, assignment, conveyance, transfer, lease
or disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or such Guarantor, as the case
may be, under this Supplemental Indenture, the Indenture, the Notes and/or the
Guarantees, as the case may be, with the same effect as if such successor had
been named as the Company or such Guarantor, as the case may be, herein, in the
Notes and/or in the Guarantees, as the case may be. When a successor assumes
all the obligations of its predecessor under the Indenture and this Supplemental
Indenture, the Notes or a Guarantee, as the case may be, the predecessor shall
be released from those obligations; provided that in the case of a transfer by
lease, the predecessor shall not be released from the payment of principal and
interest on the Notes or a Guarantee, as the case may be.
ARTICLE SEVEN
SUBORDINATION OF NOTES
----------------------
SECTION 7.1. Notes Subordinated to Senior
Indebtedness.
----------------------------
The Company covenants and agrees, and the Trustee and each Holder of
the Notes by his acceptance thereof likewise covenant and agree, that all Notes
shall be issued subject to the provisions of this Article Seven; and each person
holding any Note, whether upon original issue or upon transfer, assignment or
exchange thereof, accepts and agrees that all payments of the principal of and
interest on the Notes by the Company shall, to the extent and in the manner set
forth in this Article Seven, be subordinated and junior in right of payment to
the prior payment in full in cash of all amounts payable under Senior
Indebtedness.
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SECTION 7.2. No Payment on Notes in Certain
Circumstances.
------------------------------
(a) No direct or indirect payment (excluding any payment or
distribution of Permitted Junior Securities and excluding any payment from funds
held in trust for the benefit of Holders pursuant to Article Four of this
Supplemental Indenture (a "Defeasance Trust Payment")) by or on behalf of the
Company of principal of, premium if, any, or interest on the Notes, whether
pursuant to the terms of the Notes, upon acceleration, pursuant to an Offer, a
Change of Control Offer or otherwise, shall be made if, at the time of such
payment, there exists a default in the payment of all or any portion of the
obligations on any Designated Senior Indebtedness, whether at maturity, on
account of mandatory redemption or prepayment, acceleration or otherwise, and
such default shall not have been cured or waived or the benefits of this
sentence waived by or on behalf of the holders of such Designated Senior
Indebtedness. In addition, during the continuance of any non-payment event of
default with respect to any Designated Senior Indebtedness pursuant to which the
maturity thereof may be immediately accelerated, and upon receipt by the Trustee
of written notice (a "Payment Blockage Notice" ) from the holder or holders of
such Designated Senior Indebtedness or the trustee or agent acting on behalf of
the holders of such Designated Senior Indebtedness, then, unless and until such
event of default has been cured or waived or has ceased to exist or such
Designated Senior Indebtedness has been discharged or repaid in full in cash or
the benefits of these provisions have been waived by the holders of such
Designated Senior Indebtedness, no direct or indirect payment (excluding any
payment or distribution of Permitted Junior Securities and excluding any
Defeasance Trust Payment) shall be made by or on behalf of the Company of
principal of, premium, if any, or interest on the Notes, to such Holders, during
a period (a "Payment Blockage Period") commencing on the date of receipt of such
notice by the Trustee and ending 179 days thereafter.
Notwithstanding anything herein or in the Notes to the contrary, (x)
in no event shall a Payment Blockage Period extend beyond 179 days from the date
the Payment Blockage Notice in respect thereof was given, (y) there shall be a
period of at least 181 consecutive days in each 360-day period when no Payment
Blockage Period is in effect and (z) not more than one Payment Blockage Period
may be commenced with respect to the Notes during any period of 360 consecutive
days. No event of default that existed or was continuing on the date of
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Pe-
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<PAGE>
riod (to the extent the holder of Designated Senior Indebtedness, or trustee or
agent, giving notice commencing such Payment Blockage Period had knowledge of
such existing or continuing event of default) may be, or be made, the basis for
the commencement of any other Payment Blockage Period by the holder or holders
of such Designated Senior Indebtedness or the trustee or agent acting on behalf
of such Designated Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such event of default has been cured or waived for a
period of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, the Company
shall have made payment to the Trustee or any Holder when such payment is
prohibited by Section 7.2(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered by the Trustee (if the Notice
required by Section 7.6 has been received by the Trustee) or the Holder to, the
holders of Designated Senior Indebtedness or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Designated Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that, upon notice from the Trustee
to the holders of Designated Senior Indebtedness that such prohibited payment
has been made, the holders of the Designated Senior Indebtedness (or their
representative or representatives or a trustee or trustees) notify the Trustee
in writing of the amounts then due and owing on the Designated Senior
Indebtedness, if any, and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Designated Senior Indebtedness.
SECTION 7.3. Payment Over of Proceeds upon
Dissolution, etc.
-----------------------------
(a) Upon any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities and
excluding any Defeasance Trust Payment), upon any dissolution or winding-up or
total liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
Senior Indebtedness shall first be paid in full in cash before the Holders of
the Notes or the Trustee on behalf of such Holders shall be entitled to receive
any payment by the Company of the principal of, premium, if any, or interest on
the Notes, or any payment by the Company to acquire any of the Notes for cash,
property or securities, or any distribution with respect to the Notes of any
cash, prop-
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erty or securities (excluding any payment or distribution of Permitted
Junior Securities and excluding any Defeasance Trust Payment). Before any
payment may be made by, or on behalf of, the Company of the principal of,
premium, if any, or interest on the Notes upon any such dissolution or winding-
up or total liquidation or reorganization, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any payment or distribution of Permitted Junior
Securities and excluding any Defeasance Trust Payment), to which the Holders of
the Notes or the Trustee on their behalf would be entitled, but for the
subordination provisions of the Indenture and this Supplemental Indenture, shall
be made by the Company or by any receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, directly to
the holders of the Senior Indebtedness (pro rata to such holders on the basis of
the respective amounts of Senior Indebtedness held by such holders) or their
representatives or to the trustee or trustees or agent or agents under any
agreement or indenture pursuant to which any of such Senior Indebtedness may
have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Indebtedness in full in cash after giving
effect to any prior or concurrent payment, distribution or provision therefor to
or for the holders of such Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any payment or distribution of Permitted Junior
Securities and excluding any Defeasance Trust Payment), shall be paid by the
Company to the Trustee or any Holder of Notes at a time when such payment or
distribution is prohibited by Section 7.3(a) and before all obligations in
respect of Senior Indebtedness are paid in full in cash, such payment or
distribution shall be received and held in trust for the benefit of, and shall
be paid over or delivered by the Trustee (if the Notice required by Section 7.6
has been received by the Trustee) or the Holder to, the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders) or their respective representatives,
or to the trustee or trustees or agent or agents under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of Senior Indebtedness
remaining unpaid until all such Senior Indebtedness has been paid in full in
cash after giving effect to any prior or
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concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Six shall not be deemed a dissolution, winding-
up, liquidation or reorganization for the purposes of this Section 7.3 if such
other corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Six.
SECTION 7.4. Subrogation.
-----------
Upon the payment in full in cash of all Senior Indebtedness, or
provision for payment, the Holders of the Notes shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company made on such Senior
Indebtedness until the principal of and interest on the Notes shall be paid in
full in cash; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the Holders of the Notes or the Trustee on their behalf
would be entitled except for the provisions of this Article Seven, and no
payment over pursuant to the provisions of this Article Seven to the holders of
Senior Indebtedness by Holders of the Notes or the Trustee on their behalf
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Notes, be deemed to be a payment by the
Company to or on account of the Senior Indebtedness. It is understood that the
provisions of this Article Seven are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of the Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the Notes would
otherwise have been entitled but for the provisions of this Article Seven shall
have been applied, pursuant to the provisions of this Article Seven, to the
payment of all amounts payable under Senior Indebtedness, then and in such case,
the Holders of the Notes shall be entitled to receive from the holders of such
Senior Indebtedness any payments or distributions received by such holders of
Senior Indebtedness in excess of the amount required to make payment in full in
cash of such Senior Indebtedness.
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SECTION 7.5. Obligations of Company
Unconditional.
----------------------
Nothing contained in this Article Seven or elsewhere in the Indenture,
this Supplemental Indenture or in the Notes is intended to or shall impair, as
among the Company and the Holders of the Notes, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Notes the
principal of and interest on the Notes as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Notes and creditors of the Company other
than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Holder of any Note or the Trustee on their behalf from
exercising all remedies otherwise permitted by applicable law upon default under
the Indenture and this Supplemental Indenture, subject to the rights, if any,
under this Article Seven of the holders of the Senior Indebtedness in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article Seven shall restrict the right of the Trustee or the Holders of
Notes to take any action to declare the Notes to be due and payable prior to
their stated maturity pursuant to Section 5.1 or to pursue any rights or
remedies hereunder; provided, however, that all Senior Indebtedness then due and
payable shall first be paid in full in cash before the Holders of the Notes or
the Trustee are entitled to receive any direct or indirect payment from the
Company of principal of or interest on the Notes.
SECTION 7.6. Notice to Trustee.
-----------------
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 Notes pursuant to the provisions of this
Article Seven. The Trustee shall not be charged with knowledge of the existence
of any event of default with respect to any Senior Indebtedness or of any other
facts which would prohibit the making of any payment to or by the Trustee unless
and until the Trustee shall have received notice in writing to that effect
signed by an Officer of the Company, or by a holder of Senior Indebtedness or
trustee or agent therefor; and prior to the receipt of any such written notice,
the Trustee shall, subject to Article Eleven of the Indenture, be entitled to
assume that no such facts exist; provided, however, that if the Trustee shall
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not have received the notice provided for in this Section 7.6 at least two
Business Days prior to the date upon which by the terms of the Indenture and
this Supplemental Indenture any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Note), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from the Company and
to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 7.6 shall limit the right of
the holders of Senior Indebtedness to recover payments as contemplated by
Section 7.3. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Indebtedness (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
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 Seven, 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 Seven, 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 7.7. Reliance on Judicial Order or
Certificate of Liquidating Agent.
--------------------------------
Upon any payment or distribution of assets or securities referred to
in this Article Seven, the Trustee and the Holders of the Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the Notes
for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other in-
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debtedness 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 Seven.
SECTION 7.8. Trustee's Relation to Senior
Indebtedness.
----------------------------
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Seven with respect to any Senior Indebtedness which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Senior Indebtedness, and nothing in the
Indenture or this Supplemental Indenture shall deprive the Trustee or any Paying
Agent of any of its rights as such holder.
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 Seven, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into the Indenture or this Supplemental Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness (except as provided in Section 7.3(b)). The Trustee shall not be
liable to any such holders if the Trustee shall in good faith mistakenly pay
over or distribute to Holders of Notes or to the Company or to any other person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article Seven or otherwise.
SECTION 7.9. Subordination Rights Not Impaired
by Acts or Omissions of the
Company or Holders of Senior
Indebtedness.
---------------------------------
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein 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, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of the Indenture or this
Supplemental Indenture, regardless of any knowledge thereof which any such
holder may have or otherwise be charged with. The provisions of this Article
Seven are intended to be for the benefit of, and shall be enforceable directly
by, the holders of Senior Indebtedness.
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SECTION 7.10. Holders Authorize Trustee To
Effectuate Subordination
of Notes.
----------------------------
Each Holder of Notes by his acceptance of such Notes authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Seven, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its or his Notes
in the form required in those proceedings.
SECTION 7.11. This Article Not To Prevent
Events of Default.
---------------------------
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Seven shall not be
construed as preventing the occurrence of an Event of Default specified in
clause (a) or (b) of Section 5.1.
SECTION 7.12. Trustee's Compensation Not
Prejudiced.
--------------------------
Nothing in this Article Seven shall apply to amounts due to the
Trustee pursuant to other sections in the Indenture or this Supplemental
Indenture.
SECTION 7.13. No Waiver of Subordination
Provisions.
--------------------------
Without in any way limiting the generality of Section 7.9, 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 Notes, without
incurring responsibility to the Holders of the Notes and without impairing or
releasing the subordination provided in this Article Seven or the obligations
hereunder of the Holders of the Notes to the holders of Senior Indebtedness, do
any one or more of the following: (a) 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 agree-
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ment under which Senior Indebtedness is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 7.14. Subordination Provisions Not
Applicable to Money Held in Trust
for Holders; Payments May Be Paid
Prior to Dissolution.
---------------------------------
All money and United States Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Article Four of this
Supplemental Indenture shall be for the sole benefit of the Holders and shall
not be subject to this Article Seven.
Nothing contained in this Article Seven or elsewhere in the Indenture
or this Supplemental Indenture shall prevent (i) the Company, except under the
conditions described in Section 7.2, from making payments of principal of and
interest on the Notes or from depositing with the Trustee any moneys for such
payments or from effecting a termination of the Company's and the Guarantors'
obligations under the Notes, the Indenture and this Supplemental Indenture as
provided in Article Four, or (ii) the application by the Trustee of any moneys
deposited with it for the purpose of making such payments of principal of and
interest on the Notes, to the holders entitled thereto unless at least two
Business Days prior to the date upon which such payment becomes due and payable,
the Trustee shall have received the written notice provided for in Section
7.2(b) or in Section 7.6. The Company shall give prompt written notice to the
Trustee of any dissolution, winding-up, liquidation or reorganization of the
Company.
SECTION 7.15. Acceleration of Notes.
---------------------
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of the Senior Indebtedness of the
acceleration.
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ARTICLE EIGHT
SUBORDINATION OF GUARANTEE
--------------------------
SECTION 8.1. Guarantee Obligations
Subordinated to Guarantor Senior
Indebtedness.
--------------------------------
Each Guarantor covenants and agrees, and the Trustee and each Holder
of the Notes by his acceptance thereof likewise covenant and agree, that the
Guarantee of such Guarantor shall be issued subject to the provisions of this
Article Eight; and each person holding any Note, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees that all
payments of the principal of and interest on the Notes pursuant to the Guarantee
made by or on behalf of any Guarantor shall, to the extent and in the manner set
forth in this Article Eight, be subordinated and junior in right of payment to
the prior payment in full in cash of all amounts payable under Guarantor Senior
Indebtedness of such Guarantor.
SECTION 8.2. No Payment on Guarantees in
Certain Circumstances.
---------------------------
(a) No direct or indirect payment (excluding any payment or
distribution of Permitted Junior Securities) by or on behalf of any Guarantor of
principal of or interest on the Notes pursuant to such Guarantor's Guarantee,
whether pursuant to the terms of the Notes, upon acceleration or otherwise,
shall be made if, at the time of such payment, there exists a default in the
payment of all or any portion of the obligations on any Designated Guarantor
Senior Indebtedness of such Guarantor, whether at maturity, on account of
mandatory redemption or prepayment, acceleration or otherwise, and such default
shall not have been cured or waived or the benefits of this sentence waived by
or on behalf of the holders of such Designated Guarantor Senior Indebtedness.
In addition, during the continuance of any non-payment event of default with
respect to any Designated Guarantor Senior Indebtedness pursuant to which the
maturity thereof may be immediately accelerated, and upon receipt by the Trustee
of written notice (the "Guarantor Payment Blockage Notice") from the holder or
holders of such Designated Guarantor Senior Indebtedness or the trustee or agent
acting on behalf of such Designated Guarantor Senior Indebtedness, then, unless
and until such non-payment event of default has been cured or waived or has
ceased to exist or such Designated Guarantor Senior Indebtedness has been
discharged or paid in full
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in cash or the benefits of these provisions have been waived by the holders of
such Designated Guarantor Senior Indebtedness, no direct or indirect payment
(excluding any payment or distribution of Permitted Junior Securities) shall be
made by or on behalf of such Guarantor of principal or interest on the Notes
during a period (a "Guarantor Blockage Period") commencing on the date of
receipt of such notice by the Trustee and ending 179 days thereafter.
Notwithstanding anything herein or in the Notes to the contrary, (x)
in no event shall a Guarantor Blockage Period extend beyond 179 days from the
date the Guarantor Payment Blockage Notice in respect thereof was given, (y)
there shall be a period of at least 181 consecutive days in each 360-day period
when no Guarantor Blockage Period is in effect and (z) not more than one
Guarantor Blockage Period may be commenced with respect to any Guarantor during
any period of 360 consecutive days. No non-payment event of default that
existed or was continuing on the date of commencement of any Guarantor Blockage
Period with respect to the Designated Guarantor Senior Indebtedness initiating
such Guarantor Blockage Period (to the extent the holder of Designated Guarantor
Senior Indebtedness, or trustee or agent, giving notice commencing such
Guarantor Blockage Period had knowledge of such existing or continuing event of
default) may be, or be made, the basis for the commencement of any other
Guarantor Blockage Period by the holder or holders of such Designated Guarantor
Senior Indebtedness or the trustee or agent acting on behalf of such Designated
Guarantor Senior Indebtedness, whether or not within a period of 360 consecutive
days, unless such non-payment event of default has been cured or waived for a
period of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any payment
shall be made directly to the Trustee or any Holder when such payment is
prohibited by Section 8.2(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered by the Trustee (if the Notice
required by Section 8.6 has been received by the Trustee) or the Holder to, the
holders of such Designated Guarantor Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Designated Guarantor Senior Indebtedness may have been issued,
as their respective interests may appear, but only to the extent that, upon
notice from the Trustee to the holders of such Designated Guarantor Senior
Indebtedness that such prohibited payment has been made, the holders of such
Designated Guarantor Senior Indebtedness (or their representative or
representatives
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or a trustee or trustees) notify the Trustee in writing of the amounts then due
and owing on such Designated Guarantor Senior Indebtedness, if any, and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
such Designated Guarantor Senior Indebtedness.
SECTION 8.3. Payment Over of Proceeds upon
Dissolution, etc.
-----------------------------
(a) Upon any payment or distribution of assets or securities of any
Guarantor of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities), upon any
dissolution or winding-up or total liquidation or reorganization of such
Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Guarantor Senior Indebtedness of such
Guarantor shall first be paid in full in cash before the Holders of the Notes or
the Trustee on behalf of such Holders shall be entitled to receive any payment
by such Guarantor of the principal of or interest on the Notes pursuant to such
Guarantor's Guarantee, or any payment to acquire any of the Notes for cash,
property or securities, or any distribution with respect to the Notes of any
cash, property or securities (excluding any payment or distribution of Permitted
Junior Securities). Before any payment may be made by, or on behalf of, any
Guarantor of the principal of or interest on the Notes upon any such dissolution
or winding-up or total liquidation or reorganization, any payment or
distribution of assets or securities of such Guarantor of any kind or character,
whether in cash, property or securities (excluding any payment or distribution
of Permitted Junior Securities), to which the Holders of the Notes or the
Trustee on their behalf would be entitled, but for the subordination provisions
of the Indenture and this Supplemental Indenture, shall be made by such
Guarantor or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, directly to the holders of
the Guarantor Senior Indebtedness of such Guarantor (pro rata to such holders on
the basis of the respective amounts of such Guarantor Senior Indebtedness held
by such holders) or their representatives or to the trustee or trustees or agent
or agents under any agreement or indenture pursuant to which any of such
Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Guarantor Senior
Indebtedness in full in cash after giving effect to any prior or concurrent
payment, distribution or provision therefor to or for the holders of such
Guarantor Senior Indebtedness.
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<PAGE>
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities (excluding any payment or distribution of Permitted
Junior Securities), shall be made directly to the Trustee or any Holder of Notes
at a time when such payment or distribution is prohibited by Section 8.3(a) and
before all obligations in respect of the Guarantor Senior Indebtedness of such
Guarantor are paid in full in cash, such payment or distribution shall be
received and held in trust for the benefit of, and shall be paid over or
delivered by the Trustee (if the Notice required by Section 8.6 has been
received by the Trustee) or the Holder to, the holders of such Guarantor Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
such Guarantor Senior Indebtedness held by such holders) or their respective
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Guarantor Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of such Guarantor Senior Indebtedness remaining unpaid until all such
Guarantor Senior Indebtedness has been paid in full in cash after giving effect
to any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Indebtedness.
The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided in Article Six shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 8.3
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Six.
SECTION 8.4. Subrogation.
-----------
Upon the payment in full in cash of all Guarantor Senior Indebtedness
of a Guarantor, or provision for payment, the Holders of the Notes shall be
subrogated to the rights of the holders of such Guarantor Senior Indebtedness to
receive payments or distributions of cash, property or securities of such
Guarantor made on such Guarantor Senior Indebtedness until the principal of and
interest on the Notes shall be paid in full in cash; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Guarantor
Senior Indebtedness of any cash, property or securities to which the Holders of
the Notes or the Trustee on their behalf would be entitled except for the
provisions of this Article Eight, and no payment over pursuant to the provisions
of this Article Eight to the holders of such Guarantor Sen-
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ior Indebtedness by Holders of the Notes or the Trustee on their behalf shall,
as between such Guarantor, its creditors other than holders of such Guarantor
Senior Indebtedness, and the Holders of the Notes, be deemed to be a payment by
such Guarantor to or on account of such Guarantor Senior Indebtedness. It is
understood that the provisions of this Article Eight are and are intended solely
for the purpose of defining the relative rights of the Holders of the Notes, on
the one hand, and the holders of Guarantor Senior Indebtedness of each
Guarantor, on the other hand.
If any payment or distribution to which the Holders of the Notes would
otherwise have been entitled but for the provisions of this Article Eight shall
have been applied, pursuant to the provisions of this Article Eight, to the
payment of all amounts payable under Guarantor Senior Indebtedness, then and in
such case, the Holders of the Notes shall be entitled to receive from the
holders of such Guarantor Senior Indebtedness any payments or distributions
received by such holders of Guarantor Senior Indebtedness in excess of the
amount required to make payment in full in cash of such Guarantor Senior
Indebtedness.
SECTION 8.5. Obligations of Guarantors
Unconditional.
-------------------------
Nothing contained in this Article Eight or elsewhere in the Indenture
or this Supplemental Indenture or in the Notes or the Guarantees is intended to
or shall impair, as among each of the Guarantors and the Holders of the Notes,
the obligation of each Guarantor, which is absolute and unconditional, to pay to
the Holders of the Notes the principal of and interest on the Notes as and when
the same shall become due and payable in accordance with the terms of the
Guarantee of such Guarantor, or is intended to or shall affect the relative
rights of the Holders of the Notes and creditors of any Guarantor other than the
holders of Guarantor Senior Indebtedness of such Guarantor, nor shall anything
herein or therein prevent the Holder of any Note or the Trustee on their behalf
from exercising all remedies otherwise permitted by applicable law upon default
under the Indenture or this Supplemental Indenture, subject to the rights, if
any, under this Article Eight of the holders of Guarantor Senior Indebtedness in
respect of cash, property or
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<PAGE>
securities of any Guarantor received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article Eight shall restrict the right of the Trustee or the Holders of
Notes to take any action to declare the Notes to be due and payable prior to
their stated maturity pursuant to Section 5.1 or to pursue any rights or
remedies hereunder; provided, however, that all Guarantor Senior Indebtedness of
any Guarantor then due and payable shall first be paid in full before the
Holders of the Notes or the Trustee are entitled to receive any direct or
indirect payment from such Guarantor of principal of or interest on the Notes
pursuant to such Guarantor's Guarantee.
SECTION 8.6. Notice to Trustee.
-----------------
The Company and each Guarantor shall give prompt written notice to the
Trustee of any fact known to the Company or such Guarantor which would prohibit
the making of any payment to or by the Trustee in respect of the Notes pursuant
to the provisions of this Article Eight. The Trustee shall not be charged with
knowledge of the existence of any event of default with respect to any Guarantor
Senior Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing at its office to that effect signed by an Officer of the
Company or such Guarantor, or by a holder of Guarantor Senior Indebtedness or
trustee or agent therefor; and prior to the receipt of any such written notice,
the Trustee shall, subject to Article Eleven of the Indenture, be entitled to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 8.6 at least two
Business Days prior to the date upon which by the terms of the Indenture or this
Supplemental Indenture any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Note), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from any Guarantor and
to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 8.6 shall limit the right of
the holders of Guarantor Senior Indebtedness to recover payments as contemplated
by Section 8.3. The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself or itself to be a holder of
any Guarantor Senior Indebtedness
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(or a trustee on behalf of, or other representative of, such holder) to
establish that such notice has been given by a holder of such Guarantor Senior
Indebtedness or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Eight, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor 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 Eight, 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 8.7. Reliance on Judicial Order or
Certificate of Liquidating Agent.
--------------------------------
Upon any payment or distribution of assets or securities of a
Guarantor referred to in this Article Eight, the Trustee and the Holders of the
Notes shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which bankruptcy, dissolution, winding-up, liquidation
or reorganization proceedings are pending, or upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Notes for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of Guarantor Senior Indebtedness of such
Guarantor 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 Eight.
SECTION 8.8. Trustee's Relation to Guarantor
Senior Indebtedness.
-------------------------------
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Eight with respect to any Guarantor Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Supplemental Indenture shall deprive the
Trustee or any Paying Agent of any of its rights as such holder.
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With respect to the holders of Guarantor 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 Eight, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into the Indenture or this Supplemental Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Guarantor Senior Indebtedness (except as provided in Section
8.3(b)). The Trustee shall not be liable to any such holders if the Trustee
shall in good faith mistakenly pay over or distribute to Holders of Notes or to
the Company or to any other person cash, property or securities to which any
holders of Guarantor Senior Indebtedness shall be entitled by virtue of this
Article Eight or otherwise.
SECTION 8.9. Subordination Rights Not Impaired
by Acts or Omissions of the
Guarantors or Holders of Indebtedness.
Guarantor Senior
-------------------------------------
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein 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, in good faith, by any such
holder, or by any noncompliance by any Guarantor with the terms of the Indenture
or this Supplemental Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with. The provisions of this
Article Eight are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Guarantor Senior Indebtedness.
SECTION 8.10. Holders Authorize Trustee To
Effectuate Subordination of
Guarantee.
----------------------------
Each Holder of Notes by his acceptance of such Notes authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Eight, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Guarantor, the filing of a claim for the unpaid
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balance of its or his Notes in the form required in those proceedings.
SECTION 8.11. This Article Not To Prevent
Events of Default.
---------------------------
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Eight shall not be
construed as preventing the occurrence of an Event of Default specified in
clause (a) or (b) of Section 5.1.
SECTION 8.12. Trustee's Compensation Not
Prejudiced.
--------------------------
Nothing in this Article Eight shall apply to amounts due to the
Trustee pursuant to other sections in the Indenture or this Supplemental
Indenture.
SECTION 8.13. No Waiver of Guarantee
Subordination Provisions.
------------------------
Without in any way limiting the generality of Section 8.9, the holders
of Guarantor 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 Notes, without
incurring responsibility to the Holders of the Notes and without impairing or
releasing the subordination provided in this Article Eight or the obligations
hereunder of the Holders of the Notes to the holders of Guarantor Senior
Indebtedness, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter,
Guarantor Senior Indebtedness or any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding or secured;
(b) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Guarantor Senior Indebtedness; (c) release any
Person liable in any manner for the collection of Guarantor Senior Indebtedness;
and (d) exercise or refrain from exercising any rights against any Guarantor and
any other Person.
SECTION 8.14. Payments May Be Paid Prior to
Dissolution.
-----------------------------
Nothing contained in this Article Eight or elsewhere in the Indenture
or this Supplemental Indenture shall prevent (i) a Guarantor, except under the
conditions described in Section 8.2, from making payments of principal of and
interest on
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the Notes, or from depositing with the Trustee any moneys for such payments, or
(ii) the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of and interest on the Notes, to
the holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 8.2(b) or in Section 8.6. The
Guarantors shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of such Guarantor.
ARTICLE NINE
MISCELLANEOUS PROVISIONS
------------------------
SECTION 9.1. Ratification of Indenture.
-------------------------
Except as expressly modified or amended hereby, the Indenture
continues in full force and effect and is in all respects confirmed and
preserved.
SECTION 9.2. Governing Law.
-------------
This Supplemental Indenture, the Notes and the Guarantees will be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflicts of law principles thereof. This
Supplemental Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, and shall, to the extent applicable, be governed by such
provisions.
SECTION 9.3. Counterparts.
------------
This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
ARTICLE TEN
GUARANTEES
----------
The following provisions of this Article Ten apply to the Notes (but
not with respect to any other series of Debt Se-
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curities) and shall replace in its entirety Article Fourteen of the Indenture.
SECTION 10.1. Guarantors' Guarantee.
---------------------
For value received, each of the Guarantors, in accordance with this
Article Ten, 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 10.2. Continuing Guarantee; No Right of
Set-Off; Independent Obligation.
---------------------------------
(a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Each Guarantor, jointly and severally, covenants and
agrees to comply with all obligations, covenants, agreements and provisions
applicable to it in the Indenture and this Supplemental Indenture including
those set forth in Article Six. Without limiting the generality of the
foregoing, each of the Guarantors' liability shall-extend to all amounts which
constitute part of the Indenture Obligations and would be owed by the Company
under this Supplemental Indenture, the Indenture and the Notes but for the fact
that they are unenforceable, reduced, limited, impaired, suspended or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Company.
(b) Each Guarantor, jointly and severally, hereby guarantees that the
Indenture Obligations will be paid to the Trustee without set-off or
counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in lawful currency of the United States of America.
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(c) Each Guarantor, jointly and severally, guarantees that the
Indenture Obligations shall be paid strictly in accordance with their terms
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the holders of the
Notes.
(d) Each Guarantor's liability to pay or perform or cause the
performance of the Indenture Obligations under this Guarantee shall arise
forthwith after demand for payment or performance by the Trustee has been given
to the Guarantors in the manner prescribed in Section 3.9 of the Indenture.
(e) Except as provided herein, the provisions of this Article Ten
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 10.3. Guarantee Absolute.
------------------
The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Notes and this Supplemental Indenture and a
separate action or actions may be brought and prosecuted against any Guarantor
whether or not an action or proceeding is brought against the Company and
whether or not the Company is joined in any such action or proceeding. The
liability of the Guarantors hereunder is irrevocable, absolute and unconditional
and (to the extent permitted by law) the liability and obligations of the
Guarantors hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
(a) any defect or lack of validity or enforceability in respect of any
Indebtedness or other obligation of the Company or any other Person under
this Supplemental Indenture, the Indenture or the Notes, or any agreement
or instrument relating to any of the foregoing;
(b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the
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Trustee or the Holders may extend to, or make with, the Company, any
Guarantor or any other Person, or any change in the time, manner or place
of payment of, or in any other term of, all or any of the Indenture
Obligations, or any other amendment or waiver of, or any consent to or
departure from, this Supplemental Indenture, the Indenture or the Notes,
including any increase or decrease in the Indenture Obligations;
(c) the taking of security from the Company, any Guarantor or any
other Person, and the release, discharge or alteration of, or other dealing
with, such security;
(d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of
the Indenture Obligations and the obligations of any Guarantor hereunder;
(e) the abstention from taking security from the Company, any
Guarantor or any other Person or from 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;
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(j) the release or discharge of the Company or any Guarantor of the
Notes or of any Person liable directly as surety or otherwise by operation
of law or otherwise for the Notes, other than an express release in writing
given by the Trustee, on behalf of the Holders, of the liability and
obligations of any Guarantor hereunder;
(k) any change in the name, business, capital structure or governing
instrument of the Company or any Guarantor or any refinancing or
restructuring of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business or any part
thereof;
(m) subject to Section 10.14, any merger or consolidation, arrangement
or reorganization of the Company, any Guarantor, any Person resulting from
the merger or consolidation of the Company or any Guarantor with any other
Person or any other successor to such Person or merged or consolidated
Person or any other change in the corporate 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 10.14, any arrangement or plan of
reorganization affecting the Company or any Guarantor;
(p) any other circumstance (including any statute of limitations) that
might otherwise constitute a defense available to, or discharge of, the
Company or any Guarantor; or
(q) any modification, compromise, settlement or release by the
Trustee, or by operation of law or otherwise, of the Indenture Obligations
or the liability of the Company or any other obligor under the Notes, in
whole or in part, and any refusal of payment by the Trustee, in whole or in
part, from any other obligor or other guarantor in connection with any of
the Indenture Obligations, whether
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or not with notice to, or further assent by, or any reservation of rights
against, each of the Guarantors.
SECTION 10.4. Right To Demand Full Performance.
--------------------------------
In the event of any demand for payment or performance by the Trustee
from any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all dividends or other payments in respect
thereof until the Indenture Obligations have been paid in full, and the
Guarantors shall continue to be jointly and severally liable hereunder for any
balance which may be owing to the Trustee or the Holders by the Company under
this Supplemental Indenture, the Indenture and the Notes. The retention by the
Trustee or the Holders of any security, prior to the realization by the Trustee
or the Holders of its rights to such security upon foreclosure thereon, shall
not, as between the Trustee and any Guarantor, be considered as a purchase of
such security, or as payment, satisfaction or reduction of the Indenture
Obligations due to the Trustee or the Holders by the Company or any part
thereof.
SECTION 10.5. Waivers.
-------
(a) Each Guarantor hereby expressly waives (to the extent permitted by
law) notice of the acceptance of this Guarantee and notice of the existence,
renewal, extension or the non-performance, non-payment, or non-observance on the
part of the Company of any of the terms, covenants, conditions and provisions of
this Supplemental Indenture, the Indenture or the Notes or any other notice
whatsoever to or upon the Company or such Guarantor with respect to the
Indenture Obligations. Each Guarantor hereby acknowledges communication to it
of the terms of this Supplemental Indenture, the Indenture and the Notes and all
of the provisions therein contained and consents to and approves the same. Each
Guarantor hereby expressly waives (to the extent permitted by law) diligence,
presentment, protest and demand for payment.
(b) Without prejudice to any of the rights or recourses which the
Trustee or the Holders may have against the Company, each Guarantor hereby
expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:
(i) initiate or exhaust any rights, remedies or recourse against
the Company, any Guarantor or any other Person;
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(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 10.6. The Guarantors Remain Obligated in Event the Company Is
No Longer Obligated to Discharge Indenture Obligations.
------------------------------------------------------
It is the express intention of the Trustee and the Guarantors that if
for any reason the Company has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable 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 Ten shall
nevertheless be binding upon the Guarantors, as principal debtor, until such
time as all such Indenture Obligations have been paid in full to the Trustee and
all Indenture Obligations owing to the Trustee or the Holders by the Company
have been discharged, or such earlier time as Section 4.1 shall apply to the
Notes and the Guarantors shall be responsible for the payment thereof to the
Trustee or the Holders upon demand.
SECTION 10.7. Fraudulent Conveyance; Subrogation.
----------------------------------
(a) Any term or provision of this Guarantee to the contrary
notwithstanding, the aggregate amount of the Indenture Obligations guaranteed
hereunder shall be reduced to the extent necessary to prevent this Guarantee
from violating or becoming voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
(b) Each Guarantor hereby waives all rights of subrogation or
contribution, whether arising by contract or operation of law (including without
limitation, any such right arising under federal bankruptcy law) or otherwise by
reason of any payment by it pursuant to the provisions of this Article Ten.
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SECTION 10.8. Guarantee Is in Addition to Other Security.
------------------------------------------
This Guarantee shall be in addition to and not in substitution for any
other guarantees or other security which the Trustee may now or hereafter hold
in respect of the Indenture Obligations owing to the Trustee or the Holders by
the Company and (except as may be required by law) the Trustee shall be under no
obligation to marshal in favor of each of the Guarantors any other guarantees or
other security or any moneys or other assets which the Trustee may be entitled
to receive or upon which the Trustee or the Holders may have a claim.
SECTION 10.9. Release of Security Interests.
-----------------------------
Without limiting the generality of the foregoing and except as
otherwise provided in this Supplemental Indenture, each Guarantor hereby
consents and agrees, to the fullest extent permitted by applicable law, that the
rights of the Trustee hereunder, and the liability of the Guarantors hereunder,
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 10.10. No Bar to Further Actions.
-------------------------
Except as provided by law, no action or proceeding brought or
instituted under Article Ten 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 Ten and this Guarantee by reason of any
further default or defaults under Article Ten and this Guarantee or in the
payment of any of the Indenture Obligations owing by the Company.
SECTION 10.11. Failure To Exercise Rights Shall Not Operate as a
Waiver; No Suspension of Remedies.
---------------------------------
(a) No failure to exercise and no delay in exercising, on the part of
the Trustee or the Holders, any right, power, privilege or remedy under this
Article Ten and this
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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 Ten shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Notes pursuant to Article Five or to pursue any rights or remedies hereunder or
under applicable law.
SECTION 10.12. Trustee's Duties; Notice to Trustee.
-----------------------------------
(a) Any provision in this Article Ten or elsewhere in this
Supplemental Indenture or the 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 Supplemental
Indenture and the Indenture or where the failure of the Trustee to request any
such information or to take any such action arises from the Trustee's negligence
or willful misconduct.
(b) The Trustee shall not be required to inquire into the existence,
powers or capacities of the Company, any Guarantor or the officers, directors or
agents acting or purporting to act on their respective behalf.
SECTION 10.13. Successors and Assigns.
----------------------
All terms, agreements and conditions of this Article Ten shall extend
to and be binding upon each Guarantor and its successors and permitted assigns
and shall inure to the benefit of and may be enforced by the Trustee and its
successors and assigns; provided, however, that the Guarantors may not assign
any of their rights or obligations hereunder other than in accordance with
Article Six.
SECTION 10.14. Release of Guarantee.
--------------------
Concurrently with the payment in full of all of the Indenture
Obligations, the Guarantors shall be released from and relieved of their
obligations under this Article Ten. Upon
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the delivery by the Company to the Trustee of an Officer's Certificate and, if
requested by the Trustee, an Opinion of Counsel to the effect that the
transaction giving rise to the release of this Guarantee was made by the Company
in accordance with the provisions of this Supplemental Indenture and the Notes,
the Trustee shall execute any documents reasonably required in order to evidence
the release of the Guarantors from their obligations under this Guarantee. If
any of the Indenture Obligations are revived and reinstated after the
termination of this Guarantee, then all of the obligations of the Guarantors
under this Guarantee shall be revived and reinstated as if this Guarantee had
not been terminated until such time as the Indenture Obligations are paid in
full, and each Guarantor shall enter into an amendment to this Guarantee,
reasonably satisfactory to the Trustee, evidencing such revival and
reinstatement.
This Guarantee shall terminate with respect to each Guarantor and
shall be automatically and unconditionally released and discharged as provided
in Section 3.10.
SECTION 10.15. Execution of Guarantee.
----------------------
To evidence the Guarantee, each Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Exhibit C hereto, to be
endorsed on each Note authenticated and delivered by the Trustee and that this
Supplemental Indenture and the Indenture shall be executed on behalf of each
Guarantor by its Chairman of the Board, its President, its Chief Operating
Officer, its Chief Financial Officer, its Treasurer, one of its Vice Presidents,
or one of its other officers (or officer's of the Company) duly authorized by
such Guarantor's board of directors, and attested by an authorized officer. The
signature of any of these officers on the Notes may be manual or facsimile.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
-----------------------
The following provisions of this Article Eleven apply to the Notes
(but not with respect to any other series of Debt Securities) and shall replace
in their entirety Sections 12.1 and 12.2 of the Indenture. To the extent this
Article Eleven is inconsistent with or conflicts with any provisions of Arti-
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cle Twelve in the Indenture the provisions of this Article Eleven shall govern.
SECTION 11.1. Supplemental Indentures and Agreements Without Consent
of Holders.
------------------------------------------------------
Without the consent of any Holders, the Company and the Guarantors, if
any, when authorized by a Certified Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto or
agreements or other instruments with respect to any Guarantee, in form and
substance satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, any
Guarantor or any other obligor upon the Notes, and the assumption by any
such successor of the covenants of the Company or such Guarantor or obligor
herein and in the Notes and in any Guarantee;
(b) to add to the covenants of the Company, any Guarantor or any other
obligor upon the Notes for the benefit of the Holders, or to surrender any
right or power herein conferred upon the Company, any Guarantor or any
other obligor upon the Notes, as applicable, herein, in the Notes or in any
Guarantee;
(c) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, in the Notes or in any Guarantee, or to make any other provisions
with respect to matters or questions arising under this Supplemental
Indenture, the Indenture, the Notes or any Guarantee; provided that, in
each case, such provisions shall not adversely affect the interests of the
Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Supplemental Indenture and the
Indenture under the Trust Indenture Act, as contemplated by Section 12.4 of
the Indenture or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 3.10;
(f) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder; or
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(g) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security
for the payment and performance of the Indenture Obligations, in any
property or assets, including any which are required to be mortgaged,
pledged or hypothecated, or in which a security interest is required to be
granted to the Trustee pursuant to this Supplemental Indenture, the
Indenture or otherwise.
SECTION 11.2. Supplemental Indentures and Agreements with Consent of
Holders.
------------------------------------------------------
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes, by act of said Holders
delivered to the Company, each Guarantor, if any, and the Trustee, the Company
and each Guarantor (if a party thereto) when authorized by a Certified
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 Supplemental Indenture or the Indenture or of modifying in
any manner the rights of the Holders under this Supplemental Indenture, the
Indenture, the Notes or any Guarantee; provided, however, that no such
supplemental indenture, agreement or instrument shall, without the consent of
the Holder of each Outstanding Note affected thereby:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof, or change the coin or currency in which the principal of any Note
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
redemption date thereof);
(b) amend, change or modify the obligation of the Company to make and
consummate an Offer with respect to any Asset Sale or Asset Sales in
accordance with Section 3.9 or the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control in
accordance with Section 3.11, including amend-
-93-
<PAGE>
ing, changing or modifying any definitions with respect thereto;
(c) reduce the percentage in principal amount of the Outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Supplemental Indenture or the
Indenture or certain defaults hereunder and their consequences provided for
in this Supplemental Indenture or the Indenture or with respect to any
Guarantee;
(d) modify any of the provisions of this Section 11.2, Section 7.5 of
the Indenture or Section 3.17 of this Supplemental Indenture, except to
increase any such percentage or to provide that certain other provisions of
this Supplemental Indenture or the Indenture cannot be modified or waived
without the consent of the Holder of each Note affected thereby;
(e) except as otherwise permitted under Article Six, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights
and obligations under this Supplemental Indenture or the Indenture; or
(f) amend or modify any of the provisions of this Supplemental
Indenture or the Indenture relating to the subordination of the Notes or
any Guarantee in any manner adverse to the Holders of the Notes or any
Guarantee.
Upon the written request of the Company and each Guarantor, if any,
accompanied by a copy of a Certified 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
11.2 to approve the particular form of any proposed supplemental indenture or
Guarantee or agreement or instrument relating to any Guarantee, but it shall be
sufficient if such act shall approve the substance thereof.
SECTION 11.3. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights under
Articles Seven and Eight hereof, or any defini-
-94-
<PAGE>
tions 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.
-95-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
CANANDAIGUA BRANDS, INC.
By:
-------------------------------
Name:
Title:
BATAVIA WINE CELLARS, INC.
By:
-------------------------------
Name:
Title:
BARTON INCORPORATED
By:
-------------------------------
Name:
Title:
BARTON BRANDS, LTD.
By:
-------------------------------
Name:
Title:
BARTON BEERS, LTD.
By:
-------------------------------
Name:
Title:
-96-
<PAGE>
BARTON BRANDS OF CALIFORNIA, INC.
By:
-------------------------------
Name:
Title:
BARTON BRANDS OF GEORGIA, INC.
By:
-------------------------------
Name:
Title:
BARTON DISTILLERS IMPORT CORP.
By:
-------------------------------
Name:
Title:
BARTON FINANCIAL CORPORATION
By:
-------------------------------
Name:
Title:
STEVENS POINT BEVERAGE CO.
By:
-------------------------------
Name:
Title:
CANANDAIGUA LIMITED
By:
-------------------------------
Name:
Title:
-97-
<PAGE>
MONARCH IMPORT COMPANY
By:
-------------------------------
Name:
Title:
CANANDAIGUA WINE COMPANY, INC.
By:
-------------------------------
Name:
Title:
THE VIKING DISTILLERY, INC.
By:
-------------------------------
Name:
Title:
CANANDAIGUA EUROPE LIMITED
By:
-------------------------------
Name:
Title:
ROBERTS TRADING CORP.
By:
-------------------------------
Name:
Title:
POLYPHENOLICS, INC.
By:
-------------------------------
Name:
Title:
-98-
<PAGE>
HARRIS TRUST AND SAVINGS BANK,
as Trustee
By:
-------------------------------
Name:
Title:
Attest:______________________________
Name:
Title:
-99-
<PAGE>
Exhibit A to
Supplemental Indenture
Face of Note
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY OR A SUCCESSOR DEPOSITORY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO
A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 2.6 AND 2.13 OF THE INDENTURE AND SECTION 2.8
OF THE SUPPLEMENTAL INDENTURE./*/
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN./**/
CANANDAIGUA BRANDS, INC.
_______________
8 1/2% SENIOR SUBORDINATED NOTE DUE 2009
CUSIP NO. _________
No. $
- ---------------
/*/ Include this legend on any Global Security.
/**/ Include this legend on any Global Security issued to Cede & Co. as nominee
of The Depository Trust Company.
<PAGE>
CANANDAIGUA BRANDS, INC., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
or registered assigns, the principal sum of United States dollars on
March 1, 2009, at the office or agency of the Company referred to below, and to
pay interest thereon from March 4, 1999, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on March 1 and September 1, in each year, commencing September 1, 1999 at the
rate of 8 1/2% per annum, in United States dollars, until the principal hereof
is paid or duly provided for. Interest shall be computed on the basis of a 360-
day year comprised of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the regular record date for such interest, which
shall be February 15 or August 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted interest
at the interest rate borne by the Notes, to the extent lawful, shall forthwith
cease to be payable to the Holder on such regular record date, and may be paid
to the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on a special record date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
Payment of the principal of, premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company, (i)
in the case of a Global Security, by wire or book entry transfer to the
Depository Trust Company or its nominee, or (ii) in all other cases, by check
mailed to the address of the Person entitled thereto as such address shall
ap-
A-2
<PAGE>
pear on the Security Register. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Note is entitled to the benefits of Guarantees by each of the
Guarantors of the punctual payment when due of the Indenture Obligations made in
favor of the Trustee for the benefit of the Holders. Reference is hereby made
to Article Ten of the Supplemental Indenture for a statement of the respective
rights, limitations of rights, duties and obligations under the Guarantees of
each of the Guarantors.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature, this Note shall not
be entitled to any benefit under the Indenture, or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
Dated:
CANANDAIGUA BRANDS, INC.
By:
----------------------------
Name:
Title:
Attest:
- --------------------------
Authorized Officer
A-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 8 1/2% Senior Subordinated Notes due 2009 referred
to in the within-mentioned Indenture.
As Trustee, Harris Trust and
Savings Bank
By:
------------------------------
Name:
Title:
A-4
<PAGE>
Reverse of Note
CANANDAIGUA BRANDS, INC.
8 1/2% SENIOR SUBORDINATED NOTE DUE 2009
This Note is one of a duly authorized issue of Notes of the Company
designated as its 8 1/2% Senior Subordinated Notes due 2009 (herein called the
"Notes"), limited in aggregate principal amount to $200,000,000, issued under an
indenture (the "Basic Indenture") dated as of February 25, 1999, among the
Company, the Guarantors and Harris Trust and Savings Bank, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture (as defined)), as supplemented by a supplemental indenture dated as of
February 25, 1999 (the "Supplemental Indenture" and together with the Basic
Indenture, the "Indenture"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Guarantors, the Trustee and the Holders of the Notes, and of the
terms upon which the Notes are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Notes or (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Indebtedness evidenced by the Notes 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 Note is issued subject to such provisions. Each Holder of this Note, 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 4.4 of the Supplemental Indenture,
the Indebtedness evidenced by this Note shall cease to be so subordinate and
subject in right of payment upon any defeasance of this Note referred to in
clause (a) or (b) of the preceding paragraph.
A-5
<PAGE>
The Notes will be redeemable at the option of the Company, in whole or
in part, at any time on or after March 1, 2004, at the redemption prices
(expressed as percentages of the principal amount) set forth below plus accrued
and unpaid interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant regular record dates to receive interest due
on the relevant Interest Payment Dates), if redeemed during the 12-month period
beginning March 1 of the years indicated below:
Redemption
Year Price
- ---- ----------------
2004....................................... 104.250%
2005....................................... 102.833%
2006....................................... 101.417%
2007 and thereafter........................ 100.000%
In addition, at any time and from time to time prior to March 1, 2002,
the Company may redeem in the aggregate up to 35% of the originally issued
aggregate principal amount of the Notes with the net cash proceeds of one or
more Public Equity Offerings by the Company at a redemption price in cash equal
to 108.500% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of redemption (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date); provided, however, that at least 65% of the originally
issued aggregate principal amount of the Notes must remain outstanding
immediately after giving effect to each such redemption (excluding any Notes
held by the Company or any of its Affiliates). Notice of any such redemption
must be given within 60 days after the date of the closing of the relevant
Public Equity Offering of the Company.
Upon the occurrence of a Change of Control, each Holder may require
the Company to repurchase all or a portion of such Holder's Notes in an amount
of $1,000 or integral 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
repay 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
A-6
<PAGE>
the repayment of the Notes and certain indebtedness ranking pari passu to the
Notes.
In the case of any redemption or repurchase of Notes in accordance
with the Indenture, interest installments whose Stated Maturity is on or prior
to the redemption date will be available to the Holders of such Notes of record
as of the close of business on the relevant regular record date referred to on
the face hereof. Notes (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the date of redemption.
In the event of redemption or repurchase of this Note in accordance
with the Indenture in part only, a new Note or Notes for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Guarantors and the Holders under the Indenture and
the Notes and the Guarantees at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company and the Guarantors with certain provisions of
the Indenture and the Notes and the Guarantees and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Notes (in the event such Guarantor or
other obligor is ob-
A-7
<PAGE>
ligated to make payments in respect of the Notes), which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Note at the times, place, and rate, and in the coin or currency, herein
prescribed, subject to the subordination provisions of the Indenture.
If this Note is in certificated form, then as provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Note is registrable on the security register of the Company, upon surrender
of this Note for registration of transfer at the office or agency of the Company
maintained for such purpose in The City of New York or at such other office or
agency of the Company as may be maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the security registrar designated in accordance with Section 4.2 of
the Indenture duly executed by, the Holder hereof or its attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Note is a Global Security, it is exchangeable for a Note in
certificated form as provided in the Indenture and in accordance with the rules
and procedures of the Trustee and the Depositary. In addition, certificated
securities shall be transferred to all beneficial holders in exchange for their
beneficial interests in the Global Security if (x) the Depositary notifies the
Company that it is unwilling or unable to continue as depository for the Global
Security and a successor depository is not appointed by the Company within 90
days or (y) there shall have occurred and be continuing an Event of Default and
any note registrar designated in accordance with Section 4.2 of the Indenture
has received a request from the Depositary. Upon any such issuance, the Trustee
is required to register such certificated Notes in the name of, and cause the
same to be delivered to, such Person or Persons (or the nominee of any thereof).
The Notes in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A-8
<PAGE>
Prior to and at the time of due presentment of this Note for
registration of transfer, the Company, any Guarantor, the Trustee and any agent
of the Company, any Guarantor or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note is overdue, and neither the Company, the Trustee nor any agent shall
be affected by notice to the contrary.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.
All terms used in this Note which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
A-9
<PAGE>
FORM OF TRANSFER NOTICE
-----------------------
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Print or type name, address and zip code of assignee and irrevocably appoint
- -------------------------------------------------------------------------------
(Agent), to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Dated Signed
------------------------------ -------------------------------------
(Sign exactly as name appears on the other side of this Note)
[Signature must be guaranteed by an eligible Guarantor Institution
(banks, stock brokers, savings and loan associations and credit unions) with
membership in an approved guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17 Ad-15]
A-10
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 8 1/2% Senior Subordinated Notes due 2009 referred
to in the within-mentioned Indenture.
As Trustee, Harris Trust and Savings Bank
By:
---------------------------
Authorized Officer
A-11
<PAGE>
EXHIBIT B
---------
INTERCOMPANY NOTE
__________
Evidences of all loans or advances ("Loans") made hereunder shall be
reflected on the grid attached hereto. FOR VALUE RECEIVED, __________, a
__________ corporation (the "Maker"), HEREBY PROMISES TO PAY ON DEMAND to the
order of __________ (the "Holder") the principal sum of the aggregate unpaid
principal amount to all Loans (plus accrued interest thereon) at any time and
from time to time made hereunder which has not been previously paid.
All capitalized terms used herein that are defined in, or by reference
in, the Indenture among Canandaigua Brands, Inc., a Delaware corporation (the
"Company"), the guarantors a party thereto and Harris Trust and Savings Bank, as
trustee, dated as of February 25, 1998, as supplemented by Supplemental
Indenture No. 1 dated as of February 25, 1999 (the "Indenture"), have the
meanings assigned to such terms therein, or by reference therein, unless
otherwise defined.
ARTICLE I
TERMS OF INTERCOMPANY NOTE
Section 1.01 Note Forgivable. Unless the Maker of the Loan hereunder
---------------
is either of the Company or any Guarantor, the Holder may not forgive any
amounts owing under this intercompany note.
Section 1.02 Interest: Prepayment. (a) The interest rate
---------------------
("Interest Rate") on the Loans shall be a rate per annum reflected on the grid
attached hereto.
(b) The interest, if any, payable on each of the Loans shall accrue
from the date such Loan is made and, subject to Section 2.01, shall be payable
upon demand of the Holder.
(c) If the principal or accrued interest, if any, of the Loans is not
paid on the date demand is made, interest on the unpaid principal and interest
will accrue at a rate equal to the Interest Rate, if any, plus 100 basis points
per annum
<PAGE>
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 Notes, the Guarantees or any other Indebtedness ranking senior to
or pari passu with the Notes, 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 Notes, a Guarantee or such other senior or pari passu
Indebtedness, as the case may be, whether as a borrower, guarantor or pledgor of
collateral.
ARTICLE II
EVENTS OF DEFAULT
Section 2.01 Events of Default. If after the date of issuance of
-----------------
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.
B-2
<PAGE>
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 Notes.
Section 3.02 Assignment. No party to this Agreement may assign, in
----------
whole or in part, any of its rights and obligations under this intercompany
note, except to its legal successor in interest.
Section 3.03 Third Party Beneficiaries. The holders of the Notes or
-------------------------
any other Indebtedness ranking pari passu with or senior to, the Notes or any
Guarantees, including without limitation, any Indebtedness incurred under the
Credit Agreement, shall be third party beneficiaries to this intercompany note
and shall have the right to enforce this intercompany note against the Company
or any of its Subsidiaries.
Section 3.04 Headings. Article and Section headings in this
--------
intercompany note are included for convenience of reference only and shall not
constitute a part of this intercompany note for any other purpose.
Section 3.05 Entire Agreement. This intercompany note sets forth the
----------------
entire agreement of the parties with respect to its subject matter and
supersedes all previous understandings, written or oral, in respect thereof.
Section 3.06 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 3.07 Waivers. The Maker hereby waives presentment, demand
-------
for payment, notice of protest and all other demands and notices in connection
with the delivery, acceptance, performance or enforcement hereof.
By: ____________________________
Name:
Title:
B-3
<PAGE>
BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Amount
Amount of Maturity of Principal Unpaid
Borrowing/ Borrowing/ Paid or Principal Notation
Date Principal Principal Prepaid Balance Made By
<S> <C> <C> <C> <C> <C>
</TABLE>
B-4
<PAGE>
EXHIBIT C
---------
GUARANTEES
----------
For value received, each of the undersigned hereby unconditionally
guarantees, jointly and severally, to the holder of this Note the payment of
principal of, premium, if any, and interest on this Note upon which these
Guarantees are endorsed in the amounts and at the time when due and payable
whether by declaration thereof, or otherwise, and interest on the overdue
principal and interest, if any, of this Note, if lawful, and the payment or
performance of all other obligations of the Company under the Indenture or the
Notes, to the holder of this Note and the Trustee, all in accordance with and
subject to the terms and limitations of this Note and Article Ten of the
Supplemental Indenture. These Guarantees will not become effective until the
Trustee duly executes the certificate of authentication on this Note.
The Indebtedness evidenced by these Guarantees are, to the extent and
in the manner provided in the Supplemental Indenture, subordinate and subject in
right of payment to the prior payment in full of all Senior Guarantor
Indebtedness (as defined in the Supplemental Indenture), whether Outstanding on
the date of the Supplemental Indenture or thereafter, and these Guarantees are
issued subject to such provisions.
Dated:
-----------------------
BATAVIA WINE CELLARS, INC.
Attest: By:
--------------------- -------------------------
Authorized Officer
BARTON INCORPORATED
Attest: By:
--------------------- -------------------------
Authorized Officer
<PAGE>
BARTON BRANDS, LTD.
Attest: By:
--------------------- -------------------------
Authorized Officer
BARTON BEERS, LTD.
Attest: By:
--------------------- -------------------------
Authorized Officer
BARTON BRANDS OF CALIFORNIA, INC.
Attest: By:
--------------------- -------------------------
Authorized Officer
BARTON BRANDS OF GEORGIA, INC.
Attest: By:
--------------------- -------------------------
Authorized Officer
BARTON DISTILLERS IMPORT CORP.
Attest: By:
--------------------- -------------------------
Authorized Officer
THE VIKING DISTILLERY, INC.
Attest: By:
--------------------- -------------------------
Authorized Officer
<PAGE>
BARTON FINANCIAL CORPORATION
Attest: By:
--------------------- -------------------------
Authorized Officer
STEVENS POINT BEVERAGE CO.
Attest: By:
--------------------- -------------------------
Authorized Officer
CANANDAIGUA LIMITED
Attest: By:
--------------------- -------------------------
Authorized Officer
MONARCH IMPORT COMPANY
Attest: By:
--------------------- -------------------------
Authorized Officer
CANANDAIGUA WINE COMPANY, INC.
Attest: By:
--------------------- -------------------------
Authorized Officer
CANANDAIGUA EUROPE LIMITED
Attest: By:
--------------------- -------------------------
Authorized Officer
ROBERTS TRADING CORP.
Attest: By:
--------------------- -------------------------
Authorized Officer
<PAGE>
POLYPHENOLICS, INC.
Attest: By:
--------------------- -------------------------
Authorized Officer
