SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): January 29, 1999
PLAYTEX PRODUCTS, INC.
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(Exact name of registrant as specified in charter)
Delaware 33-25485-01 51-0312772
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
300 Nyala Farms Road, Westport, CT 06880
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 341-4000
N/A
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(Former name or former address, if changed since last report)
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Item 2. Acqusition or Disposition of Assets.
On January 29, 1999, pursuant to an Asset Purchase Agreement, dated as
of January 6, 1999, by and between Playtex Products, Inc., a Delaware
corporation (the "Company"), and Mondial Industries Limited Partnership, a
Wisconsin limited partnership ("Mondial"), the Company acquired substantially
all of the assets of Mondial for approximately $122 million. The Company paid
Mondial $72 million in cash and issued to Mondial $50 million principal amount
of a convertible subordinated note due January 31, 2004. The consideration paid
to Mondial was determined by negotiation among the parties and was based on the
value of the assets of Mondial. The Company borrowed the cash portion of the
consideration under its existing credit facilities.
The newly issued convertible note bears interest at the rate of 6%
payable semi-annually and will be convertible after January 29, 2000 at the
holder's option into the Company's common stock at a price of $19.1475 per
share. The note is subordinated to all of the Company's senior debt, including
its existing (i) 8 7/8% Senior Notes due 2004, (ii) credit facilities under a
Term Loan Agreement, dated as of July 21, 1997, by and among the Company, the
several banks and other financial institutions from time to time parties
thereto, DLJ Capital Funding, Inc., as Syndication Agent, and Wells Fargo Bank,
N.A., as the Facility Manager, and (iii) credit facilities under the Credit
Agreement, dated as of July 21, 1997, by and among the Company, DLJ Capital
Funding, Inc., as the Syndication Agent, and Wells Fargo Bank, N.A. as the
Administration Agent. The Company and Mondial have entered into a Registration
Rights Agreement providing for certain registration rights in connection with
the common stock issuable upon conversion of the note.
The assets of Mondial consist of the Diaper Genie(R) business, the
leading diaper disposal business in the U.S. Mondial is headquartered in
Streetsboro, Ohio, and has its principal manufacturing facility in the same
location. The Company presently plans to continue operating the acquired Diaper
Genie(R) business in substantially the same manner as it was operated prior to
the acquisition.
Item 5. Other Events.
On January 29, 1999, the registrant issued a press release concerning
the acquisition of substantially all of the assets of Mondial Industries Limited
Partnership. A copy of this press release is attached hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
N/A
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(b) Pro forma financial information.
N/A
(c) Exhibits
Exhibit Description
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2.1 Asset Purchase Agreement, dated as of January 6,
1999, by and between Playtex Products, Inc. and
Mondial Industries Limited Partnership.
2.2 Indenture, dated as of January 29, 1999, between
Playtex Products, Inc. and Marine Midland Bank.
2.3 Registration Rights Agreement, dated as of
January 29, 1999, between Playtex Products, Inc.
and Mondial Industries Limited Partnership.
99.1 Press release of Playtex Products, Inc. dated
January 29, 1999.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 12, 1999
PLAYTEX PRODUCTS, INC.
By: /s/ Michael F. Goss
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Michael F. Goss
Executive Vice President & Chief Financial Officer
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Exhibit Description
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2.1 Asset Purchase Agreement, dated as of January 6,
1999, by and between Playtex Products, Inc. and
Mondial Industries Limited Partnership.
2.2 Indenture, dated as of January 29, 1999, between
Playtex Products, Inc. and Marine Midland Bank.
2.3 Registration Rights Agreement, dated as of
January 29, 1999, between Playtex Products, Inc.
and Mondial Industries Limited Partnership.
99.1 Press release of Playtex Products, Inc. dated
January 29, 1999.
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ASSET PURCHASE AGREEMENT
by and between
PLAYTEX PRODUCTS, INC.
and
MONDIAL INDUSTRIES LIMITED PARTNERSHIP
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January 6, 1999
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================================================================================
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TABLE OF CONTENTS
Page
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1. Transfer of Assets and Liabilities....................................1
1.1. Assets to be Sold............................................1
1.2. Excluded Assets..............................................1
1.3. Liabilities to be Assumed....................................1
1.4. Liabilities Not Assumed......................................1
2. Consideration and Payment.............................................2
2.1. Consideration................................................2
2.2. Payment of Cash Portion Purchase Price.......................2
2.3. Delivery of the Note.........................................3
2.4. Pay-Off of Assumed Funded Debt...............................3
2.5. Allocation of Purchase Price.................................3
3. Closing; Closing Date.................................................3
4. Representations and Warranties of the Seller..........................4
4.1. Due Organization and Authority of the Seller;
Qualification of the Seller..................................4
4.2. Subsidiaries.................................................4
4.3. Authority to Execute and Perform Agreement...................4
4.4. Organizational Documents and Corporate Records...............4
4.5. Financial Statements; Liabilities............................4
4.6. No Material Adverse Change...................................5
4.7. Accounts Receivable..........................................5
4.8. Taxes........................................................5
4.9. Compliance with Laws.........................................6
4.10. Permits......................................................6
4.11. No Breach....................................................6
4.12. Reserved.....................................................7
4.13. Environmental Matters........................................7
4.14. Claims and Proceedings.......................................7
4.15. Contracts....................................................7
4.16. Inventory....................................................8
4.17. Real Estate..................................................8
4.18. Product Warranty.............................................9
4.19. Tangible Property............................................9
4.20. Intellectual Property. ....................................10
4.21. Title to the Assets.........................................11
4.22. Suppliers and Customers.....................................11
4.23. Employee Benefit Plans......................................12
4.24. Labor Matters...............................................13
4.25. Insurance...................................................13
4.26. Officers, Directors and Employees...........................14
4.27. Operations of the Seller....................................14
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4.28. Potential Conflicts of Interest.............................15
4.29. Full Disclosure.............................................15
4.30. Securities Act Compliance...................................15
4.31. Pre-Closing Payments and Other Actions......................16
4.32. Year 2000 Compliance........................................17
5. Representations and Warranties of the Buyer..........................17
5.1. Due Incorporation and Qualification.........................17
5.2. Authority to Execute and Perform Agreements.................17
5.3. No Breach...................................................17
5.4. SEC Documents; Financial Statements.........................18
5.5. No Material Adverse Change..................................18
5.7. Financing Commitments.......................................19
6. Covenants and Agreements.............................................19
6.1. Conduct of Business.........................................19
6.2. Corporate Examinations and Investigations...................19
6.3. Publicity...................................................19
6.4. Indemnification of Brokerage................................20
6.5. Required Consents...........................................20
6.6. Further Assurances..........................................20
6.7. Employees...................................................21
6.8. License Agreement Research..................................21
6.9. 401(k) Plan.................................................21
6.10. Partners of the Seller......................................21
7. Conditions Precedent to the Obligations of the Buyer.................21
7.1. Representations and Covenants...............................21
7.2. Consents and Approvals......................................22
7.3. Opinion of Counsel to the Seller............................22
7.4. Additional Closing Documents of the Seller..................22
7.5. Escrow Agreement............................................22
7.6. Non-Compete Agreements......................................22
7.7. Hart-Scott-Rodino...........................................22
7.8. Release of Prior Indebtedness...............................23
7.9. License Agreement...........................................23
7.10. Approval of the Seller's Limited Partners...................23
7.11. Title Insurance.............................................23
7.12. Survey......................................................23
7.13. Tax Returns.................................................23
7.14. FIRPTA Affidavit............................................24
8. Conditions Precedent to the Obligation of the Seller.................24
8.1. Representations and Covenants...............................24
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8.2. Additional Closing Documents of the Buyer...................24
8.3. Hart-Scott-Rodino...........................................24
8.4. License Agreement...........................................24
8.5. Approval of the Seller's Limited Partners...................24
8.6. Opinion of Counsel to the Buyer.............................25
9. Post-Closing Covenants and Agreements................................25
9.1. Prorations..................................................25
9.2. Bulk Sales Laws.............................................25
9.3. Collection of Receivables...................................25
9.4. Further Assurances..........................................25
10. Survival of Representations and Warranties of the Seller.............25
11. Indemnification......................................................26
11.1. Obligation of the Seller to Indemnify.......................26
11.2. Obligation of the Buyer to Indemnify........................26
11.3. Notice and Opportunity to Defend............................26
11.3.1 Notice of Asserted Liability.......................27
11.3.2 Opportunity to Defend..............................27
11.4. Limitations on Indemnification..............................28
12. Termination of Agreement.............................................28
12.1. Termination.................................................28
12.2. Survival After Termination..................................29
13. Miscellaneous........................................................29
13.1. Certain Definitions.........................................29
13.2. Consent to Jurisdiction and Service of Process..............32
13.3. Notices.....................................................33
13.4. Entire Agreement............................................34
13.5. Waivers and Amendments; Non-Contractual Remedies............34
13.6. Governing Law...............................................34
13.7. Binding Effect; Assignment..................................34
13.8. Counterparts................................................35
13.9. Exhibits and Schedules......................................35
13.10. Headings....................................................35
iii
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EXHIBITS
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A. Form of Note
B. Form of Escrow Agreement
C. Form of Opinion of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, S.C.
D. Form of Bill of Sale and Assignment
E. Form of Trademark Assignment
F. Form of Patent Assignment
G. Form of Deed
H-1. Form of Consulting and Non-Compete Agreement
H-2. Form of Non-Compete Agreement
I. Form of Consent and Estoppel Certificate
J. Form of Assumption of Liabilities
K. Form of Registration Rights Agreement
L. Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
SCHEDULES
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1.1 Assets
1.2 Excluded Assets
4.1 Qualification of the Seller
4.5(b) Liabilities
4.10 Permits
4.11 Required Consents
4.14 Claims and Proceedings
4.15(a) Assumed Contracts
4.15(b) Other Material Contracts
4.17(a) Owned Property
4.17(b) Leased Property
4.18 Product Warranty
4.19 Tangible Property
4.20(b) Patents
4.20(c) Intellectual Property Licenses
4.21 Title to the Assets
4.22 Suppliers and Customers
4.23 Benefit Plans
4.25 Insurance
4.26 Officers, Directors and Employees
4.27 Operations of the Seller
4.28 Potential Conflicts of Interest
4.31 Pre-Closing Payments
4.32 Year 2000 Disclosure
5.3 Authority of the Buyer
iv
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5.4 Buyer SEC Documents
6.4 Brokers Fees
13.1 Assumed Funded Debt
v
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ASSET PURCHASE AGREEMENT
AGREEMENT, dated January 6, 1999, by and between Playtex Products,
Inc., a Delaware corporation (the "Buyer"), and Mondial Industries Limited
Partnership, a Wisconsin limited partnership (the "Seller").
The Buyer wishes to purchase from the Seller, and the Seller wishes to
sell to the Buyer, substantially all of the assets, properties, rights and
business of the Seller, subject to the Assumed Liabilities (as defined below),
upon the terms and subject to the conditions of this Agreement (the
"Contemplated Transactions").
Certain terms used in this Agreement are defined in Section 13.1.
Accordingly, the parties agree as follows:
1. Transfer of Assets and Liabilities.
1.1. Assets to be Sold. At the Closing the Seller shall sell
to the Buyer, and the Buyer shall purchase from the Seller, all of the assets,
properties, rights and business of the Seller, including, without limitation,
all of the Seller's right, title and interest in and to the assets set forth on
Schedule 1.1 (all of such assets, properties and rights being sometimes
collectively referred to herein as the "Assets").
1.2. Excluded Assets. There shall be excluded from the Assets
those assets, properties and rights of the Seller set forth on Schedule 1.2.
(collectively, the "Excluded Assets").
1.3. Liabilities to be Assumed. Subject to the terms and
conditions of this Agreement, in partial consideration of the transfer to the
Buyer of the Assets, on the Closing Date the Buyer will assume all liabilities
and obligations of the Seller (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due) including,
without limitation, the liabilities and obligations set forth on Schedule 1.3,
other than the Excluded Liabilities as set forth in Section 1.4 below
(collectively, the "Assumed Liabilities").
1.4. Liabilities Not Assumed. The Buyer shall not assume or in
any way be liable for the payment, performance and discharge of the following
liabilities and obligations of the Seller (collectively, the "Excluded
Liabilities"):
(a) except as set forth in Section 9.1, all
liabilities, obligations and expenses of any kind or nature relating to Taxes of
the Seller and,
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with respect to the Assets, for any period ending on or before the Closing Date
(including, without limitation, any liabilities, obligations and expenses
pursuant to any tax sharing agreement, tax indemnification or similar
arrangement) and any Taxes payable in connection with the transactions
contemplated by this Agreement;
(b) all legal fees and the fees of any broker,
finder, agent or similar intermediary (a"Broker") acting on behalf of the
Seller, including any brokerage commissions, finder's fees or similar fees or
commissions payable in connection with this Agreement (collectively, the
"Transaction Expenses");
(c) all liabilities, obligations and expenses arising
under Environmental Laws; and
(d) all liabilities, obligations and expenses arising
under the employment agreements or relating to the employment of John Hall,
Charles J. Jacoby, Thomas O'Shea or James E. Fay, including, without limitation,
those in connection with change of control or severance arrangements.
2. Consideration and Payment.
2.1. Consideration. At the closing provided for in Article 3
(the "Closing"), upon the terms and subject to the conditions of this Agreement,
and in consideration of the sale of the Assets referred to in Section 1.1, the
Buyer will deliver to the Seller an aggregate purchase price (the "Purchase
Price") equal to (a) $70,000,000 in cash, less an amount equal to the sum of (i)
50% of the Assumed Funded Debt to the extent such Assumed Funded Debt does not
exceed $3.8 million, plus (ii) 100% of the Assumed Funded Debt above $3.8
million (the "Adjusted Cash Purchase Price"), and (b) the $50,000,000 principal
amount of the Convertible Subordinated Note of the Buyer, dated as of the
Closing Date, in the form of Exhibit A (the "Note").
2.2. Payment of Cash Portion Purchase Price. At the Closing,
the Adjusted Cash Purchase Price shall be paid by the Buyer as follows:
(a) the Buyer shall deliver to the Seller cash by
wire transfer of immediately available funds, in an amount equal to the Adjusted
Cash Purchase Price less amounts paid by the Buyer into the Escrow Account
pursuant to Section 2.2(b); and
(b) the Buyer shall deliver to US Trust Company of
New York (the "Escrow Agent") cash by wire transfer of immediately available
funds, in the amount of $5,000,000, such amount to be held in an escrow account
(the "Escrow Account") in accordance with the terms of an escrow agreement in
the form of Exhibit B among the Buyer, the Escrow Agent and the Seller (the
"Escrow Agreement").
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2.3. Delivery of the Note. At the Closing, the Buyer shall
deliver to the Seller the Note.
2.4. Pay-Off of Assumed Funded Debt. At the Closing, the Buyer
shall cause the Assumed Funded Debt to be paid in full.
2.5. Allocation of Purchase Price.
(a) Within a reasonable period following the signing
of this Agreement, but in no event less than ten (10) days prior to the Closing,
the Buyer shall prepare and deliver to the Seller a schedule (an "Allocation
Schedule") allocating the sum of the Purchase Price and the Assumed Liabilities
among the Assets, in such amounts reasonably determined by the Buyer to be
consistent with Section 1060 of the Code, and the regulations thereunder
("Section 1060").
(b) The Seller shall have a period of five (5)
business days after the delivery of the Allocation Schedule to present in
writing to the Buyer notice of any objections the Seller may have to the
allocations set forth therein (an "Objections Notice"). Unless the Seller timely
objects, such Allocation Schedule shall be binding on the parties without
further adjustment, absent manifest error.
(c) If the Seller shall raise any objections within
the five- business day period, the Buyer and the Seller shall negotiate in good
faith and use their reasonable best efforts to resolve such dispute. If the
parties fail to agree within fifteen days after the delivery of the Objections
Notice, then the disputed items shall be resolved by PricewaterhouseCoopers LLP,
or if such firm declines to act in such capacity, by such other firm of
independent nationally recognized accountants chosen and mutually accepted by
both parties (the "Accounting Referee"), whose determination shall be final and
binding on the parties. The Accounting Referee shall resolve the dispute within
thirty days after the item has been referred to it. The costs, fees and expenses
of the Accounting Referee shall be borne equally by the Seller and the Buyer.
(d) For all Tax (as defined in Section 4.8) purposes,
the Buyer and the Seller agree to report the transactions contemplated by this
Agreement in a manner consistent with the terms of this Agreement, and that none
of them will take any position inconsistent therewith in any Tax Return.
3. Closing; Closing Date. The Closing of the sale and purchase of the
Assets contemplated hereby shall take place at the offices of Paul, Weiss,
Rifkind, Wharton & Garrison at January 29, 1999, or at such other place or such
other time or date as the parties may mutually agree in writing, provided that
all of the conditions to the Closing set forth in Articles 7 and 8 have been
satisfied or waived by the party entitled to waive the same. The time and date
upon which the Closing occurs is herein called the "Closing Date."
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4. Representations and Warranties of the Seller. The Seller represents
and warrants to the Buyer as of the date of this Agreement as follows:
4.1. Due Organization and Authority of the Seller;
Qualification of the Seller. The Seller is a limited partnership duly organized
and validly existing under the laws of the State of Wisconsin and has all
requisite partnership power and lawful authority to own, lease and operate its
properties and to carry on its business as now being and heretofore conducted.
The Seller is duly qualified or otherwise authorized as a foreign limited
partnership to transact business and is in good standing in each jurisdiction
set forth on Schedule 4.1, which are the only jurisdictions in which such
qualification or authorization is required by law and in which the failure so to
qualify or be authorized could reasonably be expected to have a material adverse
effect on the Assets taken as a whole or the business, results of operations or
financial condition of the business of the Seller (the "Condition of the
Business").
4.2. Subsidiaries. The Seller does not own any interest in any
Subsidiary.
4.3. Authority to Execute and Perform Agreement. The Seller
(a) has obtained all the necessary approvals of the Contemplated Transactions
from its general partner and its oversight committee and (b) has the requisite
partnership power and authority to enter into, execute and deliver this
Agreement and each and every agreement and instrument contemplated hereby to
which the Seller is or will be a party, and upon receipt of the requisite
consents or approvals from the limited partners of the Seller, to perform fully
the Seller's obligations hereunder and thereunder. This Agreement has been duly
executed and delivered by the Seller, and each and every other agreement and
instrument contemplated by this Agreement to which the Seller is a party, will
be duly executed and delivered by the Seller and (assuming due execution and
delivery hereof and thereof by the other parties hereto and thereto) this
Agreement and each such other agreement and instrument will be valid and binding
obligations of the Seller enforceable against the Seller in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and by general equitable principles.
4.4. Organizational Documents and Corporate Records. The
Seller has heretofore delivered to the Buyer true and complete copies of the
Certificate of Limited Partnership (certified by the Department of Financial
Institutions of State of Wisconsin) and the Limited Partnership Agreement
(certified by an authorized and appropriate representative of the Seller) of the
Seller as in effect on the date hereof.
4.5. Financial Statements; Liabilities.
(a) The Seller has previously furnished to the Buyer
a copy of the following financial statements of the Seller (collectively the
"Financial Statements"): (i) audited balance sheets and the related statements
of income and partners'
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capital and cash flows as of and for the years ended December 31, 1995, December
31, 1996 and December 31, 1997; and (ii) an unaudited balance sheet, statements
of income and cash flow as of and for the nine months ended September 30, 1998
(the "Interim Financial Statements"). The Financial Statements (including the
notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present fairly in
all material respects the financial position of the Seller as of such dates and
the results of operations of the Seller for such periods; provided, however,
that the Interim Financial Statements are subject to normal year-end adjustments
and lack footnotes and other presentation items.
(b) Except as set forth on Schedule 4.5(b), the
Seller does not have any material indebtedness, liability or obligation,
absolute or contingent, other than (i) liabilities fully and adequately
reflected or reserved against in the Interim Financial Statements, (ii)
liabilities incurred after September 30, 1998 in the ordinary course of business
consistent with the past practices of the Seller, (iii) liabilities disclosed in
any Schedule to this Agreement and (iv) liabilities which individually or in the
aggregate would not reasonably be expected to have a material adverse effect on
the Condition of the Business.
4.6. No Material Adverse Change. Since December 31, 1997 (the
"Balance Sheet Date"), there has been no material adverse change in the
Condition of the Business, nor has there been any damage, destruction, loss, or
events or other circumstances which, to the knowledge of the Seller would
reasonably be expected to have or has had a material adverse effect on the
Condition of the Business, whether or not covered by insurance.
4.7. Accounts Receivable. The accounts receivable of the
Seller have arisen from bona fide transactions in the ordinary course of
business and are properly reflected on the financial statements thereof (net of
the reserves for bad debts set forth on the Interim Financial Statements).
4.8. Taxes. No state of facts exists or has existed that would
constitute grounds for the assessment against the Buyer, whether by reason of
transferee liability or otherwise, of any liability for any federal, state,
county, local, foreign or other tax (including, without limitation, income,
profits, premium, estimated, excise, sales, use, occupancy, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll related and property
taxes, import duties and other governmental charges and assessments), whether or
not measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto and
obligations under any tax sharing, tax allocation or similar agreement to which
the Seller is a party, and including expenses associated with contesting any
proposed adjustment related to any of the foregoing (hereinafter "Taxes")
attributable to any period ending on or before the Closing Date relating to the
Seller's income, assets and operations, including the Assets, or arising out of
the Contemplated Transactions, except where the failure to file any required tax
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6
return or pay Taxes would not have a material adverse effect on the Condition of
the Business. There is no pending or, to the knowledge of the Seller, threatened
Tax audit of any Tax return filed by or on behalf of the Seller or with respect
to the Seller's income, assets and operations, including the Assets.
4.9. Compliance with Laws. The Seller is not in material
violation of any applicable order, judgment, injunction, award, decree or writ
(collectively, "Orders"), or to the knowledge of the Seller, any applicable law,
statute, code, ordinance, regulation or other requirement (collectively,
"Laws"), of any government or political sub division thereof, or any agency or
instrumentality of any such government or political subdivision, or any
insurance company or fire rating and any other similar board or organization or
other non-governmental regulating body (to the extent that the rules,
regulations or orders of such body have the force of law), or any court or
arbitrator (collectively, "Governmental Bodies"), and the Seller has not
received notice that any such material violation is being or may be alleged.
4.10. Permits. The Seller has all licenses, permits,
exemptions, consents, waivers, authorizations, rights, certificates of
occupancy, franchises, orders or approvals of, and has made all required
registrations with, any Governmental Body that are material to the conduct of
the business of, or the intended use of any properties of, the Seller
(collectively,"Permits"). All Permits are listed on Schedule 4.10 and are in
full force and effect; no material violations are or have been recorded in
respect of any Permit; and no proceeding is pending or, to the knowledge of the
Seller, threatened to revoke or limit any Permit.
4.11. No Breach. None of the execution and delivery by the
Seller of this Agreement or any other agreement or instrument contemplated
hereby or the per formance by the Seller of this Agreement or any other
agreement or instrument contemplated hereby in accordance with their respective
terms and conditions (a) violates any provision of the Certificate of Limited
Partnership or the Limited Partnership Agreement of the Seller; (b) requires the
Seller to obtain any consent, approval or action of, or make any filing with or
give any notice to, any Governmental Body or any other person, except as set
forth on Schedule 4.11 (the "Required Consents"); (c) if the Required Consents
are obtained, violates, conflicts with or results in the breach of any of the
terms of, results in a material modification of the effect of, otherwise causes
the termination of or gives any other contracting party the right to terminate,
or constitutes (or with notice or lapse of time or both constitutes) a default
(by way of substitution, novation or otherwise) under, any material contract,
agreement, indenture, note, bond, loan, instrument, lease, conditional sale
contract, mortgage, license, franchise, commitment or other binding arrangement
(collectively, the "Contracts") to which the Seller is a party or by or to which
it or any of its properties are bound or subject, or results in the creation of
any Lien upon any of the Assets; (d) if the Required Consents are obtained,
violates any Order of any Governmental Body against, or binding upon, the Seller
or upon the Assets or its securities (or other ownership interests), properties
or business; (e) to the knowledge of the Seller, if the Required Consents are
obtained, violates in any material respect any Law of any
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7
Governmental Body; or (f) if the Required Consents are obtained, to the
knowledge of the Seller, violates in any material respect or results in the
revocation or suspension of any Permit.
4.12. Reserved.
4.13. Environmental Matters.
(a) The Seller has complied and is in compliance in
all material respects with all Safety and Environmental Laws.
(b) The Seller has not received any written notice,
report or other information regarding any material liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise) including any investigatory,
remedial or corrective obligations relating to the Seller or the facilities of
the Seller and arising under Safety and Environmental Laws.
(c) The Seller has not treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled or released any
substance, including without limitation, any hazardous material, or owned or
operated any facility or property, so as to give rise to material liabilities of
the Seller for response costs, natural resource damages or attorneys' fees
pursuant to applicable Safety and Environmental Laws.
4.14. Claims and Proceedings. There are no outstanding Orders
of any Governmental Body against or involving the Seller. Except as set forth on
Schedule 4.14, there are no material actions, suits, claims or legal,
administrative or arbitral proceedings or investigations (collectively,"Claims")
(whether or not the defense thereof or liabilities in respect thereof are
covered by insurance) pending, or, to the knowledge of the Seller, threatened,
against or involving the Seller. All notices required to have been given to any
insurance company listed as insuring against any Claim set forth on Schedule
4.14 have been timely and duly given and, except as set forth on Schedule 4.14,
no insurance company has asserted, orally or in writing, that such Claim is not
covered by the applicable policy relating to such Claim. Except as set forth on
Schedule 4.14, there are no product liability Claims pending or, to the
knowledge of the Seller, threatened against the Seller or any product
manufactured, marketed or distributed at any time by the Seller ("Seller
Products") and no such Claims have been settled, adjudicated or otherwise
disposed of since January 1, 1994.
4.15. Contracts.
(a) Schedule 4.15(a) sets forth all of the Contracts
and other agreements, whether or not in writing, to which the Seller is a party
the performance of which will involve consideration in the excess of $50,000.
Except as set forth on
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8
Schedule 4.15(b), there are no other Contracts that are material to the Seller's
business or by which the Assets are bound in any material respect.
(b) To the extent such Contracts are written, the
Seller has delivered to the Buyer true and complete copies of all of the
Contracts set forth on Schedule 4.15(a), Schedule 4.15(b) or on any other
Schedule. To the extent such Contracts are not written, Schedule 4.15(a) or
4.15(b) sets forth the material terms of such Contracts. All of such Contracts
are valid, binding and in full force and effect. The Seller is not in default
under any of such Contracts, and no condition exists that with notice or lapse
of time or both would constitute such a default thereunder, except where such
default would not have a material adverse effect on the Condition of the
Business. To the knowledge of the Seller, no other party to any such Contract is
in default thereunder in any material respect nor does any condition exist that
with notice or lapse of time or both would constitute such a material default
thereunder.
4.16. Inventory. The inventory of the Seller consists of raw
materials, work in process, finished goods, all of which is merchantable and fit
for the purpose for which it was procured or manufactured, and none of which is
slow-moving, obsolete, damaged or defective, subject only to the reserve for
inventory writedown set forth on the Interim Financial Statements.
4.17. Real Estate.
(a) Ownership of the Premises. The Seller is the
owner of good and marketable title to the land described on Schedule 4.17(a) and
to all of the buildings, structures and other improvements located thereon
(collectively, the "Owned Real Property") free and clear of all Title Defects
(as defined in this Section) except as listed on Schedule 4.17(a). The Owned
Real Property constitutes all of the real property owned by the Seller on the
date hereof. For purposes of this Agreement, "Title Defects" shall mean and
include any mortgage, deed of trust, Lien, pledge, security interest, lease,
charge, option, right of first refusal, easement, restrictive covenant,
encroachment or other survey defect or encumbrance other than Permitted Liens
(as defined below).
(b) Leased Properties. Schedule 4.17(b) sets forth a
true, correct and complete schedule of all leases and other agreements,
including all modifica tions, amendments and supplements thereto (collectively,
the "Real Property Leases"), under which the Seller uses or occupies or has the
right to use or occupy, now or in the future, any real property, which Schedule
sets forth the date of and parties to each Real Property Lease, the date of and
parties to each amendment, modification and supplement thereto, the term and
renewal terms (whether or not exercised) thereof, the annual rent payable
thereunder and a brief description of the Real Property (as defined below)
covered thereby. All rent and other sums and charges payable by the Seller as
tenant under each Real Property Lease are current. No event has occurred and no
condition exists that would materially interfere with the Seller's quiet
enjoyment and use of the Real Property. The
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9
Real Property Leases are in full force and effect and the Seller has not
received any notice of default thereunder.
(c) Entire Premises. All of the land, buildings,
structures and other improvements used by the Seller in the conduct of its
businesses are included in the Owned Real Property and the Leased Real Property.
The Leased Real Property and the Owned Real Property are hereinafter
collectively referred to as the "Real Property."
(d) Condemnation. The Seller has not received notice,
and the Seller has no knowledge of, any pending, threatened or contemplated
condemnation proceeding affecting the Real Property or any part thereof, or of
any sale or other disposi tion of the Real Property or any part thereof, in lieu
of condemnation.
(e) Condition and Operation of Improvements. All
components of all buildings, structures, fixtures and other improvements in, on
or within the Owned Real Property (the "Improvements"), are taken as a whole in
good operating condition and repair, subject to continued repair and replacement
in accordance with past practice.
(f) Real Property Taxes. Each of the parcels included
in the Owned Real Property is assessed for real estate tax purposes as a wholly
independent tax lot, separate from any adjoining land or improvements not
constituting a part of such parcel.
(g) Survey. There are no encroachments or other facts
or conditions affecting any parcel of Owned Real Property that would be revealed
by an accurate survey which would, individually or in the aggregate, (i)
interfere in any material respect with, or materially increase the cost of, the
use, occupancy or operation thereof as currently used, occupied and operated or
(ii) materially reduce the fair market value thereof below the fair market value
such parcel would have had but for such encroachment or other fact or condition.
No portion of any Improvement encroaches upon any property not included within
the Owned Real Property or upon the area of any easement affecting the Owned
Real Property.
4.18. Product Warranty. Schedule 4.18 sets forth a description
of all express warranties provided by the Seller with respect to products sold
by it and includes a copy of the standard terms and conditions of sale for the
Seller.
4.19. Tangible Property. Except as set forth on Schedule 4.19,
the facilities, machinery, equipment, furniture, buildings and other
improvements, fixtures, vehicles, structures, any related capitalized items and
other tangible property material to the business of the Seller (the "Tangible
Property") are in all material respects in good operating condition and repair,
subject to continued repair and replacement in accordance with past practice.
During the past three years there has not been any significant
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10
interruption of the operations of the Seller due to inadequate maintenance of
the Tangible Property.
4.20. Intellectual Property.
(a) The Seller is not infringing any Intellectual
Property rights of others in the operation of its businesses, as currently
conducted, nor to the knowledge of the Seller is any other person infringing the
Intellectual Property rights of the Seller. Except as set forth on Schedule
4.20(a), the Seller has not received any claim or notice alleging any such
infringement during the past 12 months (including any claim that the Seller must
license or refrain from using any Intellectual Property rights of any third
party).
(b) Schedule 4.20(b) identifies each patent or
registration which has been issued to the Seller with respect to any of its
Intellectual Property, identifies each pending patent application or application
for registration which the Seller has made with respect to any of its
Intellectual Property, and identifies each license, agreement or other
permission which the Seller has granted to any third party with respect to any
of its Intellectual Property (together with any exceptions). The Seller has
delivered or made available to the Buyer correct and complete copies of all such
patents, registrations, applications, licenses, agreements and permissions (as
amended to date). Schedule 4.20(b) also identifies each trade name or
unregistered trademark used by the Seller in connection with its business. With
respect to each item of Intellectual Property required to be identified in
Schedule 4.20(b), except as set forth therein:
(i) the Seller possesses all right, title
and interest in and to the item, free and clear of any Lien other than Permitted
Liens;
(ii) the item is not subject to any
outstanding Order;
(iii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand is pending or, to the
knowledge of the Seller is threatened which challenges the legality, validity,
enforceability, use or ownership of the item; and
(iv) the Seller has never agreed to
indemnify any person for or against any interference, infringement,
misappropriation or other conflict with respect to the item.
(c) Schedule 4.20(c) identifies each material item of
Intellectual Property that any third party owns and that the Seller uses
pursuant to license, sublicense, agreement or permission. The Seller has
delivered or made available to the Buyer correct and complete copies of all such
licenses, sublicenses, agreements and permissions (as amended to date). Except
as set forth on Schedule 4.20(c), with respect to each item of Intellectual
Property required to be identified in Schedule 4.20(c):
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11
(i) the license, sublicense, agreement or
permission covering the item is legal, valid, binding, enforceable and in full
force and effect;
(ii) the Seller is not, and to the knowledge
of the Seller, the other parties to such license, sublicense, agreement or
permission are not, in material breach or default thereunder;
(iii) to the knowledge of the Seller, the
underlying item of Intellectual Property is not subject to any outstanding
Order;
(iv) no action, suit, proceeding, hearing,
investigation, claim or demand is pending or, to the knowledge of the Seller, is
threatened which challenges the legality, validity or enforceability of the
underlying item of Intellectual Property; and
(v) the Seller has not granted any
sublicense or similar right with respect to the license, sublicense, agreement
or permission.
4.21. Title to the Assets. Except as set forth on Schedule
4.21, the Seller has good title to, or a valid leasehold interest in, all of the
Assets, free and clear of any Liens, except (a) for liens for taxes not yet due
and payable, (b) such imperfections of title and encumbrances, if any, which are
not material in character or amount and which do not materially detract from the
value or use of the assets subject thereto or affected thereby, (c) Liens
specifically described in the Financial Statements, (d) properties disposed of,
or subject to purchase and sales orders, in the ordinary course of business
since December 31, 1997 and (e) subject to revision as described below, Liens
set forth on Schedule 4.21 (collectively, the "Permitted Liens"). Schedule 4.21
is subject to revision upon receipt of an updated title insurance commitment,
copies of all documents referenced in the updated title insurance commitment and
a survey of the Owned Real Property. If the updated titled insurance commitment,
the survey, or the documents creating the encumbrances set forth on Schedule
4.21 disclose that an encumbrance or title imperfection exists and it does not
fall within Section 4.21(a), 4.21(b) or 4.21(c), the Buyer may give the Seller
written notice of such encumbrance or title imperfection and, if the Seller
fails to cure such defect within five (5) days after receipt of such notice, the
Buyer may elect to proceed with the Contemplated Transactions or, as the Buyer's
sole remedy, to terminate the Agreement by giving the Seller notice of such
election within five (5) business days after expiration of the five (5) day cure
period. The Seller shall use reasonable efforts to cure any such encumbrance or
title defect, provided such cure does not require a payment of more than
$25,000. Upon completion of the Contemplated Transactions, the Buyer will
acquire good title to all of the Assets, free and clear of any Liens, except for
Permitted Liens or Liens, if any, imposed by the Buyer.
4.22. Suppliers and Customers. Schedule 4.22 lists for the 10
largest (in terms of dollar amount) suppliers and the 10 largest (in terms of
dollar amount) customers of the Seller, in each case, paid for the nine months
ended on the Balance Sheet
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12
Date. Except as set forth on Schedule 4.22, (i) no person listed on Schedule
4.22 within the last twelve months has threatened in writing to cancel or
otherwise terminate, or to the knowledge of the Seller, intends to cancel or
otherwise terminate, the relationship of such person with the Seller and (ii) no
such person has during the last twelve months decreased materially or threatened
to decrease or limit materially, or to the knowledge of the Seller intends to
modify materially its relationship with the Seller or intends to decrease or
limit materially its services or supplies to the Seller or its usage or purchase
of the services or products of the Seller.
4.23. Employee Benefit Plans.
(a) Schedule 4.23 lists each Benefit Plan that Seller
maintains or to which the Seller contributes (the "Seller Benefit Plans"). The
Seller has no liability under any Benefit Plans other than the Seller Benefit
Plans. The Seller does not maintain or contribute to any Pension Benefit Plan or
any multiemployer plan (within the meaning of Section 3(37) of ERISA). To the
knowledge of the Seller, each such Benefit Plan (and related trust, insurance
contract or fund) complies in form and in operation in all material respects
with the applicable requirements of ERISA and the Code, except where the failure
to comply would not have a material adverse effect on the financial condition of
the Seller taken as a whole. All contributions (including all employer
contributions and employee salary reduction contributions) which are due have
been paid to each such Benefit Plan. The Seller has delivered to the Buyer
correct and complete copies of the plan documents and summary plan descriptions,
the most recent Form 5500 Annual Report, the most recent determination letter
and all related trust agreements, insurance contracts and other funding
agreements which implement each such Benefit Plan.
(b) No Claim with respect to the administration or
the investment of the assets of any such Benefit Plan (other than routine claims
for benefits) is pending, except where the Claim would not have a material
adverse effect on the Condition of the Business.
(c) With respect to each Benefit Plan, no event has
occurred, and there exists no condition or set of circumstances in connection
with which the Buyer could, directly or indirectly, be subject to any material
liability under ERISA, the Code or any other applicable law.
(d) Each Benefit Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and has been so
qualified during the period since its adoption; each trust created under any
such Plan is exempt from tax under Section 501(a) of the Code and has been so
exempt since its creation.
(e) No other trade or business is or at any time
within the past six years, has been treated, together with the Company, as a
single employer under Section 414 of the Code or Section 401 of ERISA.
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13
(f) No Benefit Plan is a Retiree Welfare Plan.
(g) The consummation of the transactions contemplated
by this Agreement will not entitle any current or former employee to severance
pay, unemployment compensation or any similar payment under any Benefit Plan or
accelerate the time of payment or vesting, or increase the amount of any
compensation due to, or in respect of, any current or former employee under any
Benefit Plan.
(h) As of the Closing, the Seller has not incurred
any liability or obligation under the Worker Adjustment and Retraining
Notification Act, as it may be amended from time to time, and within the 90-day
period immediately following the Closing, Buyer will not incur any such
liability or obligation if, during such 90-day period, only terminations of
employment in the normal course of operations occur.
(i) There are no unfunded obligations under any
Benefit Plan which are not fully reflected on Financial Statements.
(j) Each Benefit Plan may be amended or terminated at
any time and there is nothing preventing the assignment of any of the Benefit
Plans and all required consents , if any, in connection with the assignment of
the Benefit Plans in accordance with this Agreement have been obtained.
4.24. Labor Matters. The Seller is not a party to or bound by
any union or collective bargaining agreement. The Seller is not a party to any
pending arbitration or grievance proceeding or other claim relating to any labor
contract nor, to the knowledge of the Seller, is any such action threatened.
Within the previous 12 months, the Seller has not experienced any labor
disputes, union organization attempts or any work stoppage due to labor
disagreements in connection with its business, and there is currently no labor
strike, request for representation, slowdown or stoppage actually pending, or to
the knowledge of the Seller, threatened against the Seller. The Seller has
provided to Buyer all written employment agreements with the employees of the
Seller which are presently in effect.
4.25. Insurance. Schedule 4.25 sets forth a list (specifying
the insurer, describing each pending Claim thereunder of more than $50,000 and
setting forth the aggregate amounts paid out under each such policy through the
date hereof and the aggregate limit, if any, of the insurer's liability
thereunder) of all policies or binders of fire, liability, product liability,
worker's compensation, vehicular and other insurance held by or on behalf of the
Seller. Such policies and binders are valid and binding in accordance with their
terms, are in full force and effect, and insure against risks and liabilities to
an extent and in a manner customary in the industries in which the Seller
operates. The Seller is not in default with respect to any provision contained
in any such policy or binder or has failed to give any notice or present any
Claim under any such policy or binder in due and timely fashion. Except for
Claims set forth on Schedule 4.25,
<PAGE>
14
there are no outstanding unpaid Claims under any such policy or binder, and the
Seller has not received any notice of cancellation or non-renewal of any such
policy or binder.
4.26. Officers, Directors and Employees. Schedule 4.26 sets
forth (a) the name, title and total pre-Closing compensation of each officer,
director or comparable person of the Seller, (b) the name, title, and total
compensation of each other employee, consultant, agent or other representative
of the Seller whose current or com mitted annual rate of compensation (including
bonuses and commissions) exceeds $100,000, (c) all pre-Closing wage and salary
increases, bonuses and increases in any other direct or indirect compensation
received by such persons since the Balance Sheet Date, (d) any pre-Closing
payments or commitments to pay any severance or termination pay to any such
persons, and (e) any pre-Closing accrual for, or any commitment or agreement by
the Seller to pay, such increases, bonuses or pay. Except as set forth on
Schedule 4.26, none of such persons has indicated that he or she will cancel or
otherwise terminate such person's relationship with the Seller.
4.27. Operations of the Seller. Except as set forth on
Schedule 4.27 or on any other Schedule, since the Balance Sheet Date the Seller
has not: (a) except for short-term bank borrowings in the ordinary course of
business, incurred any indebtedness for borrowed money; (b) reduced its cash or
short-term investments or their equivalent, other than to meet cash needs
arising in the ordinary course of business, consistent with past practices; (c)
waived any material right under any Contract or other agreement of the type
required to be set forth on any Schedule; (d) made any change in its accounting
methods or practices or made any change in depreciation or amortization policies
or rates adopted by it, except insofar as may have been required by a change in
GAAP; (e) materially changed any of its business policies, including, without
limitation, advertising, investment, marketing, pricing, purchasing, production,
personnel, sales, returns, budget or product acquisition policies; (f) made any
loan or advance to any of its shareholders, officers, directors, employees,
consultants, agents, comparable persons or other representatives, as applicable
(other than travel advances made in the ordinary course of business), or made
any other loan or advance otherwise than in the ordinary course of business; (g)
made any material acquisition of all or any part of the properties, capital
stock or business of any other person; (h) terminated or failed to renew, or
received any written threat (that was not subsequently withdrawn) to terminate
or fail to renew, any Contract or other agreement that is or was material to the
Condition of the Business; (i) amended its Certificate of Limited Partnership or
its Limited Partnership Agreement, or merged with or into or consolidated with
any other person, subdivided or in any way reclassified any of its ownership
interests or any shares of its capital stock or changed or agreed to change in
any manner the rights of its ownership interests or the character of its
business; (j) made any material capital expenditures (or series of related
capital expenditures) outside the ordinary course of business; or (k) granted
any license or sublicense of any rights under or with respect to any
Intellectual Property outside the ordinary course of business.
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15
4.28. Potential Conflicts of Interest. Except as set forth on
Schedule 4.28, (a) the Seller does not, (b) no officer, director or affiliate of
the Seller, (c) no relative or spouse (or relative of such spouse) of any such
officer, director or affiliate and (d) no entity controlled by one or more of
the foregoing:
(i) own(s), directly or indirectly, any
interest in (excepting less than 1% stock holdings for investment purposes in
securities of publicly held and traded companies), or is an officer, director,
employee or consultant of, any person which is, or is engaged in business as, a
competitor, lessor, lessee, supplier, distributor, sales agent or customer of
the Seller;
(ii) own(s), directly or indirectly, in
whole or in part, any property that the Seller uses in the conduct of its
business; or
(iii) has any cause of action or other
material claim whatsoever against, or owes any material amount to, the Seller,
except for claims in the ordinary course of business such as for accrued
vacation pay, accrued benefits under Benefit Plans, and similar matters and
agreements existing on the date hereof.
4.29. Full Disclosure. All documents or other papers
identified herein or listed in the Schedules attached hereto and delivered by or
on behalf of the Seller to the Buyer in connection with this Agreement and the
transactions contemplated hereby are true, complete and authentic copies
thereof. The representations and warranties of the Seller in this Agreement
taken together with the attached Schedules and with all of the documents and
other papers expressly identified herein or listed in such Schedules, taken as a
whole, do not, to the knowledge of the Seller, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made not false or misleading.
4.30. Securities Act Compliance.
(a) Each of the Seller and its partners is either (i)
an accredited investor as defined in Rule 501(a)(3), (5) or (6) of Regulation D
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), or (ii) has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of the prospective investment, and there are less than 35
partners which are not described by clause (i).
(b) The Seller is not subscribing for the Note as a
result of or subsequent to:
(i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio;
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16
(ii) any seminar or meeting; or
(iii) any solicitation of a subscription by
a person not associated with the Buyer.
(c) The Seller has received copies of the Buyer's
Annual Report on Form 10-K for the year ended December 29, 1997 as filed with
the Securities and Exchange Commission (the "SEC") and of all other reports
filed by the Seller under Section 13(a) of the Securities and Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"), subsequent thereto.
(d) The Seller has had full opportunity to ask
questions of and to receive answers from the Buyer, or persons acting on the
Buyer's behalf, concerning the terms and conditions of an investment in the
Buyer.
(e) On or before the Closing Date, (i) the Seller
shall cause each of its limited partners to make representations concerning
itself to the Buyer substantially to the effect set forth in paragraphs (a)
through (d) above, (ii) such representations shall be true and correct in all
material respects as of the Closing date as if made on and as of such date and
(iii) the Buyer shall have received such other information about the Seller and
its partners as it may reasonably request for purposes of satisfying itself that
the offer and sale of the Note to the Seller is exempt under the Securities Act.
4.31. Pre-Closing Payments and Other Actions.
(a) Prior to the Closing, the Seller has not paid any
and will not pay any Transaction Expenses until after the Closing and such
Transaction Expenses shall be paid from the cash delivered to the Seller
pursuant to Section 2.2.
(b) During the period from the signing of this
Agreement to the Closing, the Seller has not declared or paid any distributions
or declared or made any other payments of any kind to its partners other than
distributions in the aggregate amount not more than $1,500,000 to the partners
of the Seller to pay taxes based on the allocation of the Seller's income and
$2.5 million which heretofore has been paid on December 18, 1998, or made any
direct or indirect redemption, retirement, purchase or other acquisition of any
of its ownership interests.
(c) During the period from the date of the Interim
Financial Statements to the Closing, the Seller has not delayed or postponed the
payment of accounts payable and other liabilities outside the ordinary course of
business.
(d) During the period from the date of the Interim
Financial Statements to the Closing, the Seller has not, except for inventory or
asset retirements in the ordinary course of business, sold, transferred or made
any other disposition of any of its properties.
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17
(e) During the period from the date of the Interim
Financial Statements to the Closing, the Seller has not taken any actions
outside the ordinary course of business to accelerate the collection of any
receivables.
(f) The application of cash by the Seller to repay
Assumed Funded Debt shall not be deemed a breach of any representation or
warranty in this Agreement; provided such cash was not obtained by the Seller in
breach as any such representation or warranty contained in Section 4.27 or 4.31.
4.32. Year 2000 Compliance. Except as noted on Schedule 4.32,
to the knowledge of the Seller, all software, hardware, databases, and embedded
control systems used by the Seller (collectively, the "Systems") and each of the
products of the Seller (the "Products") are Year 2000 Compliant. As used herein,
the term "Year 2000 Compliant" means that the Systems and Products (i)
accurately process date and time data (including, without limitation,
calculating, comparing, and sequencing) from, into, and between the twentieth
and twenty-first centuries, the years 1999 and 2000, and leap year calculations
and (ii) operate accurately with other software and hardware that use standard
date format (4 digits) for representation of the year.
5. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller as follows:
5.1. Due Incorporation and Qualification. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has the corporate power and lawful authority to
own, lease and operate its assets, properties and business and to carry on its
business as now conducted.
5.2. Authority to Execute and Perform Agreements. The Buyer
has the requisite corporate power and authority to enter into, execute and
deliver this Agreement and each and every other agreement and instrument
contemplated hereby to which the Buyer is or will be a party, and to perform
fully the Buyer's obligations hereunder and thereunder. This Agreement has been
duly executed and delivered by the Buyer, and each and every other agreement and
instrument contemplated by this Agreement to which the Buyer is a party will be
duly executed and delivered by the Buyer and (assuming due execution and
delivery hereof and thereof by the other parties hereto and thereto) this
Agreement and each such other agreement and instrument will be valid and binding
obligations of the Buyer enforceable against the Buyer in accordance with their
respective terms.
5.3. No Breach. Except as disclosed on Schedule 5.3, none of
the execution and delivery by the Buyer of this Agreement or any other agreement
or instrument contemplated hereby, the consummation of the transactions
contemplated hereby or thereby nor the performance by the Buyer of this
Agreement or any other agreement or instrument contemplated hereby in accordance
with their respective terms and conditions (a) violates any provision of the
Certificate of Incorporation or By-laws (or comparable
<PAGE>
18
instruments) of the Buyer; (b) requires the Buyer to obtain any consent,
approval or action of, or make any filing with or give any notice to, any
Governmental Body or any other person; or (c) violates, conflicts with or
results in the breach of any of the terms of, results in a material modification
of the effect of, otherwise causes the termination of or gives any other
contracting party the right to terminate, or constitutes (or with notice or
lapse of time or both constitutes) a default (by way of substitution, novation
or otherwise) under, any Contract to which the Buyer is a party or by or to
which the Buyer or any of its properties may be bound or subject.
5.4. SEC Documents; Financial Statements. Schedule 5.4 lists
each report, schedule, registration statement and definitive proxy statement
filed by the Buyer with the SEC since December 31, 1996 (as such documents have
since the time of their filing been amended, the "Buyer SEC Documents"), which
include all the documents (other than preliminary material) that the Buyer was
required to file with the SEC since such date. The Buyer has made available to
Seller a true and complete copy of each of such Buyer SEC Documents. As of their
respective dates, the Buyer SEC Documents and any forms, reports and other
documents filed with the SEC by the Buyer after the date of this Agreement
complied or will comply in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, applicable to such Buyer
SEC Documents, and none of the Buyer SEC Documents contained, or will contain at
the time they are filed or amended, any untrue statement of a material fact or
omitted, or will omit at the time they are filed or amended, to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
financial statements of the Buyer included in the Buyer SEC Documents comply as
to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of the SEC) and
fairly present (subject, in the case of the unaudited statements, to normal
audit adjustments) in all material respects the financial position of the Buyer
as at the dates thereof and the results of its operations and cash flows for the
periods then ended.
5.5. No Material Adverse Change. Since September 30, 1998,
there has been no material adverse change in the business, result of operations
or financial condition of the business of the Buyer (the "Condition of the
Buyer"), and the Buyer does not know of any such change which is threatened, nor
has there been any damage, destruction or loss which could have or has had a
material adverse effect on the Condition of the Buyer, whether or not covered by
insurance.
5.6. Capital Structure. As of the date hereof, the authorized
capital stock of the Buyer consists of 100,000,000 shares of common stock (the
"Common Stock"). As of the close of business on December 15, 1998 (i) 60,401,822
of the Common Stock were outstanding, 4,783,001 shares of the Common Stock were
reserved for issuance pursuant to the 1994 Stock Option Plan (the "Stock Plan")
and (ii) no shares
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19
of the Common Stock were held by the Buyer in its treasury. All outstanding
shares of the Common Stock are, and the shares of the Buyer's common stock to be
issued pursuant to or as specifically contemplated by this Agreement will be,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. As of the date of this Agreement, except for this Agreement and shares
of the Common Stock available for issuance under the Stock Plan, there are no
options, warrants, calls, rights, commitments or agreements of any character to
which the Buyer is a party or by which it is bound obligating the Buyer to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or obligating the Buyer to grant, extend or enter into
any such option, warrant, call, right, commitment or agreement. Except as
disclosed in the Buyer SEC Documents, as of the date hereof, the Buyer is not
party to any agreement relating to the Common Stock, to any voting trust with
respect to the Common Stock or to any agreement granting any other party
registration rights with respect to shares of the Common Stock.
5.7. Financing Commitments. The Buyer has sources of financing
in an amount sufficient to effectuate the Contemplated Transactions.
6. Covenants and Agreements. Each party shall use its best efforts to
fulfill or obtain the fulfillment of the conditions to the Closing set forth in
Articles 7 and 8, and, in addition, the parties covenant and agree as follows:
6.1. Conduct of Business. From the date hereof through the
Closing Date, the Seller agrees that it shall conduct its business in the
ordinary course and, in a manner such that the representations and warranties
contained in Article 4 shall continue to be true and correct on and as of the
Closing Date as if made on and as of the Closing Date. The Seller shall give the
Buyer prompt notice of any event, condition or circumstance occurring from the
date hereof through the Closing Date that would constitute a violation or breach
of any representation or warranty, whether made as of the date hereof or as of
the Closing Date, or that would constitute a violation or breach of any covenant
of the Seller contained in this Agreement.
6.2. Corporate Examinations and Investigations. Prior to the
Closing Date, the Seller agrees that the Buyer shall be entitled, through its
employees and representatives, to make such investigation of the properties,
businesses and operations of the Seller, and such examination of the books,
records and financial condition of the Seller, upon reasonable written request.
Any such investigation and examination shall be conducted at reasonable times
and under reasonable circumstances, and the Seller shall cooperate fully
therein. No investigation by the Buyer shall diminish or obviate any of the
representations, warranties, covenants or agreements of the Seller contained in
this Agreement.
6.3. Publicity. The parties agree that, except to the extent
required by Law or the rules or regulations of any applicable stock exchange, no
publicity release or announcement concerning this Agreement or the Contemplated
Transactions shall be made without advance approval thereof by the Seller and
the Buyer.
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20
6.4. Indemnification of Brokerage. The Seller represents and
warrants to the Buyer that except as set forth on Schedule 6.4 no Broker has
acted on behalf of the Seller in connection with this Agreement or the
Contemplated Transactions, and that there are no brokerage commissions, finder's
fees or similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with the Seller, or any action taken by
the Seller. The Seller agrees to indemnify and hold harmless the Buyer from any
claim or demand for commission or other compensation by any Broker claiming to
have been employed by or on behalf of the Seller, and to bear the cost of legal
expenses incurred in defending against any such claim. The Buyer represents and
warrants to the Seller that no Broker has acted on behalf of the Buyer in
connection with this Agreement or the Contemplated Transactions, and that there
are no brokerage commissions, finders' fees or similar fees or commissions
payable in connection therewith based on any agreement, arrangement or
understanding with the Buyer, or any action taken by the Buyer. The Buyer agrees
to indemnify and hold harmless the Seller from any claim or demand for
commission or other compensation by any Broker claiming to have been employed by
or on behalf of the Buyer, and to bear the cost of legal expenses incurred in
defending against any such claim.
6.5. Required Consents. Prior to the Closing, the Seller and
its oversight committee shall use reasonable efforts to obtain the necessary
consents to the Contemplated Transactions from its limited partners in
accordance with the terms and conditions of the Mondial Industries Limited
Partnership Amended and Restated Limited Partnership Agreement (the "Limited
Partnership Agreement"), giving them ten (10) business days to consider the
proposal and recommending their approval of such proposal; and the Seller shall
notify the Buyer of the status of such consents immediately thereafter. The
Seller shall use reasonable efforts to obtain (i) all the necessary consents to
the assignment to the Buyer of the patent licenses under the License Agreement,
dated as of June 30, 1994, between ITB Licensing Urheberrechts-Und
Markenverwertungsgmbh, and Mondial Industries Limited Partnership (the "License
Agreement"), in the form of Exhibit I, and (ii) all other Required Consents. If
the Seller fails to receive any of the Required Consents specified on Schedule
4.11 and notifies the Buyer of such failure prior to the Closing, the Buyer's
remedy for such failure is to terminate this Agreement; provided if the Buyer
chooses not to terminate this Agreement and proceeds with the Contemplated
Transactions, the Buyer's sole rights with respect to such failure to obtain
such specified Required Consents prior to the Closing are as set forth in
Section 6.6 and such breach on the part of the Seller shall be deemed waived by
the Buyer.
6.6. Further Assurances. At any time and from time to time
during the one (1) year period following the Closing, at the Buyer's or the
Sellers' request and without further consideration, the Seller or the Buyer, as
the case may be, shall execute and deliver such further documents, perform such
further acts, and fully cooperate with each other, as may be reasonably
necessary in order to effectively transfer and convey the Assets to the Buyer,
on the terms herein contained, and to otherwise comply with the terms of this
Agreement and consummate the Contemplated Transactions (the "Efforts") ,
including, without limitation, (i) in the event any of the Required Consents are
<PAGE>
21
not obtained and the Buyer proceeds with the Closing without such Required
Consents, the Seller shall assist the Buyer in obtaining any such Required
Consent after the Closing Date until such time as such Required Consent has been
obtained and (ii) the Seller shall use reasonable efforts to obtain an estoppel
certificate from Tri-Tech Plastics, LLC in a form reasonably acceptable to the
Buyer; provided such Efforts by the Seller or the Buyer does not require a
payment of more than $25,000.
6.7. Employees. The Buyer shall offer employment to all
current full time employees of the Seller other than John Hall, Charles J.
Jacoby, Thomas O'Shea and James E. Fay ("Transferred Employees") as of the
Closing; provided, however, that nothing shall be construed to require the Buyer
to limit or restrict the ability of the Buyer to terminate the employment of the
Transferred Employees following the Closing or to maintain the terms of such
employment, including any particular level of benefits.
6.8. License Agreement Research. Upon the request of the Buyer
after the Closing, the Seller shall deliver to the Buyer all the legal research
and memoranda in connection with the License Agreement and any disputes
thereunder.
6.9. 401(k) Plan. The Seller will use all reasonable efforts
to file a determination letter for the 401(k) Plan prior to the Closing and to
the extent not filed before the Closing, the Seller will provide any necessary
information and shall assist the Buyer to the extent the Buyer reasonably deems
necessary to complete the filing and receive a favorable determination letter
for the 401(k) Plan.
6.10. Partners of the Seller. On the Closing Date, the Seller
shall provide to the Buyer a list of the names and address of its limited
partners and general partners and, at any time and from time to time during the
one (1) year period after the Closing Date, the Seller shall update the
information as necessary to make the list accurate and the Seller shall provide
such updated list to the Buyer as soon as practicable.
7. Conditions Precedent to the Obligations of the Buyer. The obligation
of the Buyer to enter into and complete the Closing is subject, to the
fulfillment on or prior to the Closing Date of the following conditions, any one
or more of which may be waived by it:
7.1. Representations and Covenants. The representations and
warranties of the Seller contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. The Seller shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by the Seller on or prior to the Closing Date. The
Seller shall have delivered to the Buyer a certificate, dated the date of the
Closing and signed by an authorized and appropriate representative of the
Seller, to the foregoing effect.
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22
7.2. Consents and Approvals. Certain Required Consents as
specified in Schedule 4.11 shall have been obtained and be in full force and
effect, and the Buyer shall have been furnished with evidence reasonably
satisfactory to it that such specified Required Consents have been obtained.
7.3. Opinion of Counsel to the Seller. The Buyer shall have
received the opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach,
S.C., counsel to the Seller, dated the date of the Closing, addressed to the
Buyer, covering the matters set forth on Exhibit C.
7.4. Additional Closing Documents of the Seller. The Seller
shall have executed and delivered to the Buyer the following documents, each
dated the Closing Date: (a) a bill of sale and assignment in the form of Exhibit
D; (b) a trademark assignment in the form of Exhibit E;
(c) a patent assignment in the form of Exhibit F;
(d) such other assignments in recordable form
appropriate for each jursdiction where trademark or service mark registrations
or applications may be issued or pending;
(e) a general warranty deed in the form of Exhibit G
(a "Deed") for each piece of Owned Real Property; and
(f) such further instruments of sale, transfer,
conveyance, assignment or delivery covering the Assets or any part thereof as
the Buyer may reasonably require to assure the full and effective sale,
transfer, conveyance, assignment or delivery to it of the Assets (including the
Permits).
7.5. Escrow Agreement. The Seller and the Escrow Agent shall
have entered into the Escrow Agreement, in the form of Exhibit B.
7.6. Non-Compete Agreements. Each of the Consulting and
Non-Compete Agreement and Non-Compete Agreement, which have been entered into on
the date hereof, between each of John Hall and Charles J. Jacoby and the Buyer,
in the form of Exhibits H-1 and H-2, respectively, remain in full force and
effect.
7.7. Hart-Scott-Rodino. The waiting period specified in the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the rules and
regulations promulgated thereunder (the "HSR Act"), including any extensions
thereof, shall have expired.
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23
7.8. Release of Prior Indebtedness. The Buyer shall have
received evidence satisfactory to it that upon payment of the Assumed Funded
Debt by the Buyer as set forth in Section 2.4, the Seller shall be released from
any and all liability with respect to and will have no further obligations in
connection with the Assumed Funded Debt, including, without limitation,
appropriate termination agreements and releases from any Liens.
7.9. License Agreement. The Seller has obtained all the
necessary consents to the assignment to the Buyer of the patent licenses under
the License Agreement in the form of Exhibit I.
7.10. Approval of the Seller's Limited Partners. The Seller
has obtained the necessary consents to the Contemplated Transactions from its
limited partners.
7.11. Title Insurance. The Buyer shall have received an
owner's extended coverage policy of title insurance with respect to each parcel
of Owned Real Property, issued on the date of Closing by Chicago Title Insurance
Company or another title insurance company acceptable to counsel for the Buyer
(the "Title Company"). Each such title insurance policy shall be in an amount
designated by the Buyer and shall insure the Buyer's ownership of fee title
without any of the Schedule B standard preprinted exceptions (other than taxes
not yet due and payable) and free and clear of Title Defects and other
exceptions to or exclusions from coverage other than Permitted Liens. Each such
title insurance policy shall otherwise be in form reasonably satisfactory to
counsel to the Buyer.
7.12. Survey. The Buyer shall have received a current survey
of each parcel of Owned Real Property prepared in insurable form in accordance
with standards applicable to registered and licensed land surveyors making
surveys in the States in which such parcels are located and in accordance with
the further provisions of this Section 7.12. Each such survey shall be certified
to the Buyer and the Title Company and shall show (i) the courses and distances
of all boundary lines of such parcel (including, appurtenant easements), (ii)
the location of all Improvements situated on or above such parcel and on or
above any easements or rights of way affecting said parcel, (iii) all
encroachments of adjoining properties or improvements onto such parcel, (iv) all
encroachments of Improvements onto any adjoining property, (v) the location of
all easements and other rights burdening such parcel and all encroachments of
Improvements onto the areas of such easements, (vi) the location of all
roadways, alleys, rights of way and the like affecting such parcel, (vii) all
accessways from such parcel to public streets and (viii) such other facts and
conditions affecting such parcel as are appropriate, or as may have been
reasonably requested by the Buyer, to be shown on such survey. Each such survey
shall otherwise be in form reasonably satisfactory to counsel for the Buyer.
7.13. Tax Returns. The Buyer shall have received any and all
real property transfer tax returns and other similar filings required by law in
connection with the transactions contemplated hereby and relating to the Owned
Real Property, any part
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24
thereof or ownership interest therein, all duly and properly executed and
acknowledged by the Seller. The Seller shall also have executed such affidavits
in connection with such filings as shall have been required by law or reasonably
requested by the Buyer.
7.14. FIRPTA Affidavit. The Buyer shall have received an
affidavit of an officer of the Seller sworn to under penalty of perjury, setting
forth the Seller's address and Federal tax identification number and stating
that the Seller is not a "foreign person" within the meaning of Section 1445 of
the Code.
8. Conditions Precedent to the Obligation of the Seller. The obligation
of the Seller to enter into and complete the Closing is subject, to the
fulfillment on or prior to the Closing Date of the following conditions, any one
or more of which may be waived by the Seller:
8.1. Representations and Covenants. The representations and
warranties of the Buyer contained in this Agreement shall be true on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. The Buyer shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date. The Buyer
shall have delivered to the Seller a certificate, dated the date of the Closing
and signed by an officer of the Buyer, to the foregoing effect.
8.2. Additional Closing Documents of the Buyer. The Buyer
shall have executed and delivered to the Seller the following documents, each
dated the Closing Date:
(a) an assumption of liabilities in the form of
Exhibit J (the "Assumption of Liabilities"); and
(b) a Real Property Lease Assignment and Assumption
Agreement for each Real Property Lease; and
(c) the Registration Rights Agreement in the form of
Exhibit K.
8.3. Hart-Scott-Rodino. The waiting period specified in the
HSR Act, including any extensions thereof, shall have expired.
8.4. License Agreement. The Seller has obtained all the
necessary consents to the assignment to the Buyer of the patent licenses under
the License Agreement.
8.5. Approval of the Seller's Limited Partners. The Seller has
obtained the necessary consents to the Contemplated Transactions from its
limited partners and in accordance with the terms and conditions of the Limited
Partnership Agreement.
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25
8.6. Opinion of Counsel to the Buyer. The Seller shall have
received the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the
Buyer, dated the date of the Closing, addressed to the Seller, covering the
matters set forth on Exhibit L.
9. Post-Closing Covenants and Agreements.
9.1. Prorations. All real estate and personal property Taxes
and all rents, utilities and other charges against, or payable by the owner of,
any of the Assets (including the Real Property) relating to a time period
beginning prior to, and ending after, the Closing shall be prorated (based on
the most recent available tax statement, latest tax valuation and latest bills)
as of the Closing. If the Closing occurs before the tax rate is fixed for the
then current fiscal or calendar year, whichever is applicable, the proration of
the corresponding Taxes shall be on the basis of the tax rate for the last
preceding year applied to the latest assessed valuation. The Seller's estimated
accrued liability (to the Closing) for any of the above-described Taxes and
charges that are due and payable after the Closing shall be a credit against the
amount payable at the Closing by the Buyer.
9.2. Bulk Sales Laws. The Buyer hereby waives compliance with
the provisions of any bulk transfer laws applicable to the transactions
contemplated by this Agreement. The Seller agrees promptly and diligently to pay
and discharge when due or to contest or litigate all Excluded Liabilities that
are asserted against the Buyer by reason of any non-compliance with such laws.
9.3. Collection of Receivables. The Seller agrees that the
Buyer shall have the right and authority to collect for its own account or the
account of its affiliates all receivables of the Seller that are transferred and
assigned to the Buyer as provided herein and the Buyer and its affiliates have
the right to endorse with the name of the Seller any checks received on account
of any such receivable. The Seller agrees that it will promptly transfer and
deliver to the Buyer any cash or other property that the Seller may receive in
respect of such receivables.
9.4. Further Assurances. At any time and from time to time
after the Closing, at the Buyer's request and without further consideration, the
Seller shall execute and deliver such further documents, and perform such
further acts, as may be necessary in order to effectively transfer and convey
the Assets to the Buyer, on the terms herein contained, and to otherwise comply
with the terms of this Agreement and consummate the Contemplated Transactions.
10. Survival of Representations and Warranties of the Seller. All
representations, warranties, covenants and agreements in this Agreement shall
survive the execution and delivery hereof and the Closing hereunder. All
representations and warranties of the Seller contained in this Agreement shall
terminate and expire six (6) months after the Closing Date, and no claim or
demand for indemnification pursuant to Article 11 or otherwise (except for fraud
by or on behalf of the Seller for which a claim
<PAGE>
26
may be made against the Seller and not the other Seller Related Parties except
pursuant to Sections 179.57, 179.58 and 179.74(1) of the Uniform Limited
Partnership Act of the State of Wisconsin (the "WULPA")) shall be made after
such date, except for those claims or demands for indemnification pursuant to
Article 11, of which the Buyer has notified the Seller in writing prior to such
date in accordance with the terms of this Agreement.
11. Indemnification.
11.1. Obligation of the Seller to Indemnify. Subject to the
limitations contained in Article 10 and Section 11.4, the Seller agrees to
indemnify, defend and hold harmless the Buyer (and its directors, officers,
employees, affiliates, successors and assigns) from and against all losses,
liabilities, damages, deficiencies, demands, claims, actions, judgments or
causes of action, assessments, costs or expenses (including, without limitation,
interest, penalties and reasonable fees, expenses and disbursements of
attorneys, experts, personnel and consultants incurred by the indemnified party
in any action or proceeding between the indemnifying party and the indemnified
party or between the indemnified party and any third party, or otherwise)
("Losses") based upon, or arising out of (a) any inaccuracy in or any breach of
any representation, warranty, covenant or agreement of the Seller contained in
this Agreement or in any Documents delivered by the Seller pursuant to this
Agreement or (b) any Excluded Liability. It is understood and agreed by the
Buyer that, except as expressly provided in this Article 11 and in respect of
fraud by or on behalf of the Seller for which a claim may be made against the
Seller and not the other Seller Related Parties except pursuant to Sections
179.57, 179.58 and 179.74(1) of the WULPA, after the Closing Date, the Seller,
its general partner, limited partners, and their shareholders, directors,
officers, affiliates, employees, successors and assigns (collectively, the
"Seller Related Parties") will not have any obligation or liability to the
Buyer, and the Buyer will have no claim or recourse against the Seller Related
Parties, as a result of the events or of circumstances set forth in this Article
11 or otherwise arising out of or incurred in connection with the Contemplated
Transactions, it being understood and agreed that the remedy provided for in
this Article 11 will be the sole and exclusive remedy for any such claim by the
Buyer for any such matters, whether such claims are framed in contract, tort or
otherwise, except for fraud by or on behalf of the Seller for which a claim may
be made against the Seller and not the other Seller Related Parties except
pursuant to Sections 179.57, 179.58 and 179.74(1) of the WULPA.
11.2. Obligation of the Buyer to Indemnify. The Buyer shall
indemnify, defend and hold harmless the Seller from and against any Losses based
upon, arising out of or otherwise in respect of (a) any inaccuracy in or any
breach of any representation, warranty, covenant or agreement of the Buyer
contained in this Agreement or in any Documents delivered by the Buyer pursuant
to this Agreement or (b) any Assumed Liability.
11.3. Notice and Opportunity to Defend.
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27
11.3.1 Notice of Asserted Liability. The party making a claim
under this Article 11 is referred to as the "Indemnitee," and the party against
whom such claims are asserted under this Article 11 is referred to as the
"Indemnifying Party." All claims by any Indemnitee under this Article 11 shall
be asserted and resolved as follows: Promptly after receipt by an Indemnitee of
notice of any demand, claim or circumstances which, with the lapse of time,
would or might give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation (an "Asserted
Liability") that may result in a Loss, an Environmental Claim or Environ mental
Compliance Costs, the Indemnitee shall give notice thereof (the "Claims Notice")
to the Indemnifying Party. The Claims Notice shall describe the Asserted
Liability in reasonable detail, and shall indicate the amount (estimated, if
necessary and to the extent feasible) of the Loss that has been or may be
suffered by the Indemnitee.
11.3.2 Opportunity to Defend. (a) The Indemnifying Party may
elect to compromise or defend, at its own expense and by its own counsel, any
Asserted Liability, except any Asserted Liability which is likely to result in
Environmental Compliance Costs, which shall be subject to Section 11.3.2(b). If
the Indemnifying Party elects to compromise or defend such Asserted Liability,
it shall within 30 days (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee of its intent to do so, and the Indemnitee shall
cooperate, at the expense of the Indemnifying Party, in the compromise of, or
defense against, such Asserted Liability. If the Indemnifying Party elects not
to compromise or defend the Asserted Liability, fails to notify the Indemnitee
of its election as herein provided or contests its obligation to indemnify under
this Agreement, the Indemnitee may pay, compromise or defend such Asserted
Liability. Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnitee may settle or compromise any claim over the objection of the other;
provided, however, that if the settlement or compromise does not result in any
liability to the Indemnifying Party, consent to settlement or compromise shall
not be unreasonably withheld. In any event, the Indemnitee and the Indemnifying
Party may participate, at their own expense, in the defense of such Asserted
Liability. If the Indemnifying Party chooses to defend any claim, the Indemnitee
shall make available to the Indemnifying Party any books, records or other
documents within its control that are necessary or appropriate for such defense.
(b) Notwithstanding anything to the contrary in
Section 11.3.2(a), the Indemnitee shall have the exclusive right at its option
to manage and control all actions resulting in Environmental Compliance Costs
with respect to which the Indemnitee has made a claim for indemnification
pursuant to Section 11.1 hereof. The Indemnitee shall keep the Indemnifying
Party fully informed of the progress of such actions. The Indemnifying Party
shall be obligated to indemnify the Indemnitee for all Environmental Compliance
Costs resulting from such actions; provided, however, that the Indemnifying
Party shall not be obligated to indemnify the Indemnitee pursuant to Section
11.1 hereof to the extent that any Environmental Compliance Costs for which the
Indemnitee seeks indemnification are not incurred or undertaken in a manner in
which a prudent business person acting in a commercially reasonable manner,
seeking to mitigate such Environmental Compliance Costs to the extent reasonably
possible, would do so.
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28
11.4. Limitations on Indemnification. The indemnification
provided for in Section 11.1(a) for breaches of representations or warranties
and Section 11.1(b) shall be subject to the following limitations:
(a) The Seller shall not be obligated to pay any
amounts for such indemnification except those based upon, arising out of or
otherwise in respect of Section 4.21, 4.28(ii), 4.31(a) or 4.31(b) (the "Basket
Exclusions"), until the aggregate of such amounts, exclusive of those in respect
of the Basket Exclusions, equals $500,000 (the "Basket Amount"), whereupon the
Seller shall be obligated to pay in full all such amounts for such
indemnification in excess of the Basket Amount.
(b) The Seller shall be obligated to pay any amounts
for indemnification based on the Basket Exclusions without regard to the
individual or aggre gate amounts thereof and without regard to whether all other
indemnification payments shall have exceeded, in the aggregate, the Basket
Amount.
(c) The Seller shall not be obligated to pay any
amounts for indemnification (except those based upon, arising out of the Basket
Exclusions) in excess of the Escrow Account in the aggregate. The Escrow Account
shall be the only source of payment for indemnification or otherwise (except for
fraud by or on behalf of the Seller) to the Buyer and the Buyer shall not be
entitled to make any claim against the Seller Related Parties (other than the
Seller as provided in Article 11) or set-off against the Note; provided, however
that the Buyer may make a claim of fraud by or on behalf of the Seller against
the Seller and, if the Buyer has made such a claim of fraud by or on behalf of
the Seller against the Seller and if the Seller distributed its assets in
violation of Section 179.57, 179.58 or 179.74(1) of the WULPA, then the Buyer
may seek to collect amounts owing from the Seller for such claims from any
Seller Related Party to the extent and in proportion to funds distributed to
such Seller Related Party in violation of those sections of the WULPA.
12. Termination of Agreement.
12.1. Termination. This Agreement may be terminated prior to
the Closing as follows:
(a) by the Seller, if the Buyer has breached in any
material respect any representation, warranty, covenant or agreement contained
in this Agreement, which breach cannot reasonably be, or is not, cured by the
Closing Date;
(b) by the Buyer, if the Seller has breached in any
material respect any representation, warranty, covenant or agreement contained
in this Agreement which breach cannot reasonably be, or is not, cured by the
Closing Date;
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29
(c) by the Seller, if the Closing Date shall not have
occurred before March 31, 1999, for any reason other than the failure of the
Seller to perform its obligations hereunder;
(d) by the Buyer, if the Closing Date shall not have
occurred before March 31, 1999, for any reason other than the failure of the
Buyer to perform its obligations hereunder;
(e) by the Buyer, if within ten (10) business days
from the date hereof, the Seller has not received the necessary consents to the
Contemplated Transactions from its limited partners and in accordance with the
Limited Partnership Agreement; provided, however, that the Buyer must exercise
such right within 15 business days as of the date hereof;
(f) by the Buyer or the Seller, if within ten (10)
business days from the date hereof, the Seller has not obtained all the
necessary consents to the assignment to the Buyer of the patent licenses under
the License Agreement in the form of Exhibit I; provided, however, that such
party must exercise such right within 15 business days as of the date hereof; or
(g) at any time on or prior to the Closing Date, by
mutual written consent of the Seller and the Buyer.
If this Agreement so terminates, it shall become null and void
and have no further force or effect, except as provided in Section 12.2.
12.2. Survival After Termination. If this Agreement terminates
pursuant to Section 12.1, it shall subject to the limitations set forth in
Article 11, become null and void and have no further force or effect, except
that any such termination shall be without prejudice to the rights of any party
on account of the nonsatisfaction of the condi tions set forth in Articles 7 and
8 resulting from the intentional or willful breach or violation of the
representations, warranties, covenants or agreements of another party under this
Agreement. Notwithstanding anything in this Agreement to the contrary, Sec tions
6.4, 6.5, 13.2 and 13.6 shall survive any termination of this Agreement.
13. Miscellaneous.
13.1. Certain Definitions. As used in this Agreement, the
following terms have the following meanings:
"affiliate" means, with respect to any person, any other person
controlling, controlled by or under common control with, such person.
"Assumed Funded Debt" means the funded debt of the Seller listed on
Schedule 13.1.
<PAGE>
30
"Benefit Plan" means any employee benefit plan, arrangement, policy or
commitment (whether or not an employee benefit plan within the meaning of
section 3(3) of ERISA), including, without limitation, any employment,
consulting or deferred compensation agreement, executive compensation, bonus,
incentive, pension, profit-sharing, savings, retirement, stock option, stock
purchase or severance pay plan, any life, health, disability or accident
insurance plan or any holiday or vacation practice, as to which the Seller or
any Commonly Controlled Entity has or in the future could have any direct or
indirect, actual or contingent liability.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commonly Controlled Entity" means any entity which is under common
control with the Seller within the meaning of Code section 414(b), (c), (m), (o)
or (t).
"Documents" means documents, Contracts, instruments, certificates,
notices, consents, affidavits, letters, telegrams, telexes, statements,
schedules (including Schedules to this Agreement), exhibits (including Exhibits
to this Agreement) and any other papers whatsoever.
"Employee" means any individual employed at any time by the Seller.
"Environment" means navigable waters, waters of the contiguous zone,
ocean waters, natural resources, surface waters, ground water, drinking water
supply, land surface, subsurface strata, ambient air, both inside and outside of
buildings and structures, man-made buildings and structures, and plant and
animal life on earth.
"Environmental Compliance Costs" means any expenditures, costs,
assessments or expenses (including, without limitation, any expenditures, costs,
assessments or expenses in connection with the conduct of any Remedial Action,
as well as reasonable fees, disbursements and expenses of attorneys, experts,
personnel and consultants), whether direct or indirect, necessary to cause the
operations, real property, assets, equipment or facilities owned, leased,
operated or used by the Seller to be in compliance with any and all
requirements, as in effect at the Closing Date, of Safety and Environmental
Laws, principles of common law concerning pollution, protection of the
Environment or health and safety, or Permits issued pursuant to Safety and
Environmental Laws; provided, however, that Environmental Compliance Costs do
not include expenditures, costs, assessments or expenses necessary in connection
with normal maintenance of such real property, assets, equipment or facilities
or the replacement of equipment in the normal course of events due to ordinary
wear and tear.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
<PAGE>
31
"Hazardous Substance" means any toxic waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial substance
or waste, petroleum or petroleum-derived substance or waste, radioactive
substance or waste, or any constituent of any such substance or waste, or any
other substance regulated under or defined by any Safety and Environmental Law.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto
and all patents, patent applications and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions and
reexaminations thereof; (b) all trademarks, service marks, trade dress, logos,
trade names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith and all applications, registrations and renewals in connection
therewith; (c) all copyrightable works, all copyrights and all applications,
registrations and renewals in connection therewith; (d) all mask works and all
applications, registrations and renewals in connection therewith; (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information and business and
marketing plans and proposals); (f) all computer software (including data and
related documentation); (g) all other proprietary rights; and (h) all copies and
tangible embodiments in any of the foregoing (in whatever form or medium).
"IRS" means the Internal Revenue Service.
"knowledge of the Seller" means the actual knowledge of any of John
Hall, Charles J. Jacoby, Sue Ungar, Thomas O'Shea, Robert C. Kruty, Jr. or Mark
Yoho after due inquiry.
"Liability" means any direct or indirect indebtedness, liability,
claim, loss, damage, deficiency, obligation or responsibility, known or unknown,
fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, contingent or otherwise, of a kind required by
generally accepted accounting principles to be set forth on a financial
statement or in the notes thereto.
"Lien" means any lien, pledge, mortgage, security interest, claim,
lease, license, charge, option, right of first refusal, easement, servitude,
transfer restriction, encumbrance or any other restriction or limitation
whatsoever.
"Pension Plan" means any Benefit Plan which is a pension plan within
the meaning of ERISA section 3(2) (regardless of whether the plan is covered by
ERISA).
"person" means any individual, corporation, partnership, firm, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
<PAGE>
32
"property" or "properties" means real, personal or mixed property,
tangible or intangible.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
or through the indoor or outdoor Environment or into, through or out of any
property, including the movement of Hazardous Substances through or in the air,
soil, surface water, ground water or property.
Remedial Action" means all actions, whether voluntary or involuntary,
reasonably necessary to comply with, or discharge any obligation under, Safety
and Environmental Laws to (A) clean up, remove, treat, cover or in any other way
adjust Hazardous Substances in the indoor or outdoor Environment; (B) prevent or
control the Release of Hazardous Substances so that they do not migrate or
endanger or threaten to endanger public health or welfare or the Environment; or
(C) perform remedial studies, investigations, restoration and post-remedial
studies, investigations and monitoring on, about or in any real property.
"Retiree Welfare Plan" means any welfare plan (as defined in Section
3(1) of ERISA) that provides benefits to current or former employees beyond
their retirement or other termination of service (other than coverage mandated
by COBRA, the cost of which is fully paid by the current or former employee or
his or her dependents).
"Safety and Environmental Laws" means all Laws and Orders relating to
pollution, protection of the Environment, public or worker health and safety, or
the emission, discharge, release or threatened release of pollutants,
contaminants or industrial, toxic or hazardous substances or wastes into the
Environment or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants or industrial, toxic or hazardous substances or wastes, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss. 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901 et seq., the Toxic Substances Control Act, 15
U.S.C. ss. 2601 et seq., the Federal Water Pollution Control Act, 33 U.S.C. ss.
1251 et seq., the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss. 121 et seq., the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., the Asbestos
Hazard Emergency Response Act, 15 U.S.C. ss.2601 et seq., the Safe Drinking
Water Act, 42 U.S.C. ss. 300f et seq., the Oil Pollution Act of 1990y and
analogous state acts.
"Subsidiary" means as to any person, any corporation 50% or more of the
outstanding voting power of which, or any partnership, joint venture or other
entity 50% or more of the total equity interest or which, is directly or
indirectly owned by such person.
"Tax Return" means all tax returns, reports, forms, and other such
documents.
<PAGE>
33
13.2. Consent to Jurisdiction and Service of Process. Any
legal action, suit or proceeding arising out of or relating to this Agreement,
each and every agreement and instrument contemplated hereby or the Contemplated
Transactions may be instituted in any federal court of the Southern District of
New York or any state court located in New York County, State of New York, and
each party agrees not to assert, by way of motion, as a defense or otherwise, in
any such action, suit or proceeding, any claim that it is not subject personally
to the jurisdiction of such court, that the action, suit or proceeding is
brought in an inconvenient forum, that the venue of the action, suit or
proceeding is improper or that this Agreement, or each such other agreement and
instrument or the subject matter hereof or thereof may not be enforced in or by
such court. Each party further irrevocably submits to the jurisdiction of such
court in any such action, suit or proceeding. Any and all service of process and
any other notice in any such action, suit or proceeding shall be effective
against any party if given personally or by registered or certified mail, return
receipt requested, or by any other means of mail that requires a signed receipt,
postage prepaid, mailed to such party as herein provided. Nothing herein
contained shall be deemed to affect the right of any party to serve process in
any manner permitted by law or to commence legal proceedings or otherwise
proceed against any other party in any other jurisdiction.
13.3. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so delivered
personally or sent by facsimile transmission or, if mailed, five days after the
date of deposit in the United States mails, as follows:
(i) if to the Buyer, to:
Playtex Products, Inc.
300 Nyala Farms Road
Westport, Connecticut 06880
Attention: Michael F. Goss
Telephone: (203) 341-4264
Facsimile: (203) 341-4260
and with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Robert M. Hirsh, Esq.
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
<PAGE>
34
(ii) if to the Seller, to:
Mondial Industries Limited Partnership
600 Mondial Parkway
Streetsboro, Ohio 44241
Attention: John Hall
Telephone: (330) 626-4490
Facsimile: (330) 626-4491
with a copy to:
Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, S.C.
1000 North Water Street
Milwaukee, Wisconsin 53201-0900
Attention: James M. Bedore, Esq.
Telephone: (414) 298-1000
Facsimile: (414) 298-8097
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
13.4. Entire Agreement. This Agreement (including the Exhibits
and Schedules) and any collateral agreements executed in connection with the
consummation of the Contemplated Transactions contain the entire agreement among
the parties with respect to the transactions contemplated hereby and supersede
all prior agreements, written or oral, with respect thereto.
13.5. Waivers and Amendments; Non-Contractual Remedies. This
Agreement may be amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument signed by the Buyer and
the Seller or, in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
13.6. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
<PAGE>
35
13.7. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and legal repre sentatives. This Agreement is not assignable except
by operation of law, except that the Buyer may assign its rights hereunder to
any of its affiliates, to any successor to all or substantially all of its
business or assets or to any bank or other financial institution that may
provide financing for the Contemplated Transactions.
13.8. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof each signed by less than all, but together signed by all of the
parties hereto.
13.9. Exhibits and Schedules. The Exhibits and Schedules are a
part of this Agreement as if fully set forth herein. All references herein to
Sections, Exhibits and Schedules shall be deemed references to such parts of
this Agreement, unless the context shall otherwise require.
13.10. Headings. The headings in this Agreement are for
reference only, and shall not affect the interpretation of this Agreement.
<PAGE>
36
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
BUYER:
PLAYTEX PRODUCTS, INC.
By: ____________________________
Name: Michael F. Goss
Title: Executive Vice President and
Chief Financial Officer
SELLER:
MONDIAL INDUSTRIES LIMITED
PARTNERSHIP
By: Hazelbank, Inc., its general partner
By: _________________________
Name:
Title:
PLAYTEX PRODUCTS, INC., as Issuer
and
MARINE MIDLAND BANK, as Trustee
- --------------------------------------------------------------------------------
INDENTURE
Dated as of January 29, 1999
- --------------------------------------------------------------------------------
$50,000,000
6.0% Convertible Subordinated Notes due 2004
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION.................................1
Section 101. Definitions.........................................1
Section 102. Other Definitions..................................14
Section 103. Compliance Certificates and Opinions...............15
Section 104. Form of Documents Delivered to Trustee.............15
Section 105. Acts of Holders....................................16
Section 106. Notices, Etc., to Trustee and the Company..........17
Section 107. Notice to Holders; Waiver..........................17
Section 108. Conflict with Trust Indenture Act..................18
Section 109. Effect of Headings and Table of Contents...........18
Section 110. Successors and Assigns.............................18
Section 111. Separability Clause................................18
Section 112 Benefits of Indenture..............................18
Section 113. GOVERNING LAW......................................18
Section 114. Legal Holidays.....................................19
Section 115. Schedules..........................................19
Section 116. Counterparts.......................................19
Section 117. No Set-Off.........................................19
Section 118. Incorporation by Reference of Trust Indenture Act..19
ARTICLE TWO THE SECURITIES.....................................20
Section 201. Form and Dating....................................20
Section 202. Execution and Authentication.......................21
Section 203. Temporary Securities...............................22
Section 204. Registrar, Registration of Transfer and Exchange...22
Section 205. Mutilated, Destroyed, Lost and Stolen Securities...24
Section 206. Payment of Interest; Interest Rights Preserved.....25
Section 207. Persons Deemed Owners..............................26
Section 208. Cancellation.......................................27
Section 209. Computation of Interest............................27
Section 210. Book-entry Provisions for Global Security..........27
Section 211. Special Transfer Provisions........................29
Section 212. Conversion Notices.................................32
ARTICLE THREE DEFEASANCE AND COVENANT DEFEASANCE.................32
Section 301. Company's Option to Effect Defeasance or Covenant
Defeasance.........................................32
Section 302. Defeasance and Discharge...........................32
Section 303. Covenant Defeasance................................33
Section 304. Conditions to Defeasance or Covenant Defeasance....33
i
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Page
----
Section 305. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions...36
Section 306. Reinstatement......................................36
ARTICLE FOUR REMEDIES...........................................37
Section 401. Events of Default..................................37
Section 402. Acceleration of Maturity; Rescission and Annulment.38
Section 403. Collection of Indebtedness and Suits for Enforcement
by Trustee.........................................39
Section 404. Trustee May File Proofs of Claim...................40
Section 405. Trustee May Enforce Claims Without Possession of
Securities.........................................41
Section 406. Application of Money Collected.....................41
Section 407. Limitation on Suits................................42
Section 408. Unconditional Right of Holders to Receive Principal,
Premium and Interest...............................42
Section 409. Restoration of Rights and Remedies.................43
Section 410. Rights and Remedies Cumulative.....................43
Section 411. Delay or Omission Not Waiver.......................43
Section 412. Control by Holders.................................43
Section 413. Waiver of Past Defaults............................44
Section 414. Undertaking for Costs..............................44
Section 415. Waiver of Stay, Extension or Usury Laws............44
Section 416. Remedies Subject to Applicable Law.................45
ARTICLE FIVE THE TRUSTEE........................................45
Section 501. Duties of Trustee..................................45
Section 502. Notice of Defaults.................................46
Section 503. Certain Rights of Trustee..........................47
Section 504. Trustee Not Responsible for Recitals, Dispositions
of Securities or Application of Proceeds Thereof...48
Section 505. Trustee and Agents May Hold Securities;
Collections; Etc...................................48
Section 506. Money Held in Trust................................48
Section 507. Compensation and Indemnification of Trustee and its
Prior Claim........................................49
Section 508. Conflicting Interests..............................49
Section 509. Corporate Trustee Required; Eligibility............50
Section 510. Resignation and Removal; Appointment of Successor
Trustee............................................50
Section 511. Acceptance of Appointment by Successor.............52
Section 512. Merger, Conversion, Consolidation or Succession to
Business...........................................52
Section 513. Preferential Collection of Claims Against Company..53
ii
<PAGE>
Page
----
ARTICLE SIX HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY........................................53
Section 601. Company to Furnish Trustee Names and Addresses of
Holders............................................53
Section 602. Disclosure of Names and Addresses of Holders.......54
Section 603. Reports by Trustee.................................54
Section 604. Reports by Company.................................54
ARTICLE SEVEN CONSOLIDATION, MERGER, SALE OF ASSETS..............55
Section 701. Company May Merge, Consolidate, Etc., Only on
Certain Terms......................................55
Section 702. Successor Substituted..............................56
ARTICLE EIGHT SUPPLEMENTAL INDENTURES............................57
Section 801. Supplemental Indentures and Agreements Without
Consent of Holders.................................57
Section 802. Supplemental Indentures and Agreements with Consent
of Holders.........................................57
Section 803. Execution of Supplemental Indentures and
Agreements.........................................59
Section 804. Effect of Supplemental Indenture...................59
Section 805. Conformity with Trust Indenture Act................59
Section 806. Reference in Securities to Supplemental
Indentures.........................................59
Section 807. Record Date........................................60
ARTICLE NINE COVENANTS..........................................60
Section 901. Payment of Principal, Premium and Interest.........60
Section 902. Maintenance of Office or Agency....................60
Section 903. Money for Security Payments to Be Held in Trust....61
Section 904. Corporate Existence................................62
Section 905. Payment of Taxes and Other Claims..................62
Section 906. Maintenance of Properties..........................63
Section 907. Insurance..........................................63
Section 908. Purchase of Securities upon a Change of Control....63
Section 909. Statement by Officers as to Default................67
Section 910. Waiver of Certain Covenants........................67
ARTICLE TEN REDEMPTION OF SECURITIES...........................68
Section 1001. Right of Redemption................................68
Section 1002. Applicability of Article...........................68
Section 1003. Election to Redeem; Notice to Trustee..............69
Section 1004. Selection by Trustee of Securities to Be Redeemed..69
Section 1005. Notice of Redemption...............................69
Section 1006. Deposit of Redemption Price........................70
iii
<PAGE>
Page
----
Section 1007. Securities Payable on Redemption Date..............71
Section 1008. Securities Redeemed or Purchased in Part...........71
ARTICLE ELEVEN SATISFACTION AND DISCHARGE
Section 1101. Satisfaction and Discharge of Indenture............71
Section 1102. Application of Trust Money.........................73
ARTICLE TWELVE SUBORDINATION OF SECURITIES
Section 1201. Securities Subordinate to Senior Indebtedness......73
Section 1202. Payment Over of Proceeds Upon Dissolution, etc.....73
Section 1203. Suspension of Payment When Senior Indebtedness in
Default............................................75
Section 1204. Payment Permitted if No Default....................76
Section 1205. Subrogation to Rights of Holders of Senior
Indebtedness.......................................76
Section 1206. Provisions Solely to Define Relative Rights........77
Section 1207. Trustee to Effectuate Subordination................78
Section 1208. No Waiver of Subordination Provisions..............78
Section 1209. Notice to Trustee..................................79
Section 1210. Reliance on Judicial Order or Certificate of
Liquidating Agent..................................80
Section 1211. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's Rights.....80
Section 1212. Article Applicable to Paying Agents................80
Section 1213. No Suspension of Remedies..........................80
Section 1214. Trustee's Relation to Senior Indebtedness..........81
ARTICLE THIRTEEN CONVERSION OF SECURITIES...........................81
Section 1301. Conversion Privilege and Conversion Price..........81
Section 1302. Exercise of Conversion Privilege...................82
Section 1303. Fractions of Shares................................83
Section 1304. Adjustment of Conversion Price.....................83
Section 1305. No Adjustment......................................86
Section 1306. Other Adjustments..................................87
Section 1307. Adjustments for Tax Purposes.......................87
Section 1308. Notice of Adjustments of Conversion Price..........87
Section 1309. Notice of Certain Corporate Action.................88
Section 1310. Company to Reserve Common Stock....................88
Section 1311. Taxes on Conversions...............................88
Section 1312. Covenant as to Common Stock........................88
Section 1313. Cancellation of Converted Securities...............88
Section 1314. Provisions in Case of Reclassification,
Consolidation, Merger or Sale of Assets............89
Section 1315. Successive Adjustments.............................89
iv
<PAGE>
EXHIBIT A Form of Security
EXHIBIT B Form of Conversion Notice
EXHIBIT C Form of Certification for Transfer or Exchange of Non-global
Restricted Security to Global Security
EXHIBIT D Form of Transferee Letter of Representation
EXHIBIT E Form of Legend for Book-Entry Securities
v
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of January 29, 1999
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
ss.310(a)(1) 509
(a)(2) 509
(b) 508, 510
ss.312(a) 601
(c) 602
ss.313(a) 603
(c) 603
ss.314(a) 604
(a)(4) 909
(c)(1) 103
(c)(2) 103
(e) 103
ss.315(a) 501(b)
(b) 502
(c) 501(a)
(d) 501(c), 503
(e) 414
ss.316(a)(last sentence) 101 ("Outstanding")
(a)(1)(A) 412
(a)(1)(B) 413
(b) 408
(c) 807
ss.317(a)(1) 403
(a)(2) 404
ss.318(a) 108
- ----------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
vi
<PAGE>
INDENTURE, dated as of January 29, 1999, between PLAYTEX PRODUCTS,
INC., a Delaware corporation (the "Company"), and MARINE MIDLAND BANK, as
trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 6.0%
Convertible Subordinated Notes due 2004 (the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor, the Company has
duly authorized the execution and delivery of this Indenture;
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act; and
All acts and things necessary have been done to make (i) the
Securities, when executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the Company
and (ii) this Indenture a valid agreement of the Company in accordance with the
terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
<PAGE>
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall
refer to the lawful currency of the United States of America.
The following terms shall have the meanings set forth in this Section:
"Administrative Agent" means Wells Fargo Bank, N.A., the administrative
agent under the Credit Agreement, and its successors and assigns.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person that
owns, directly or indirectly, 10% or more of such Person's equity ownership or
Voting 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. 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.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depository for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Asset Purchase Agreement" shall mean the Asset Purchase Agreement
dated as of January 6, 1999 by and among the Company and Mondial as the same may
be amended, supplemented or otherwise modified from time to time.
"Bankruptcy Law" means Title 11 of the United States Code, 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.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee of such board.
2
<PAGE>
"Board Resolution" means 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, and delivered to the Trustee.
"Book-Entry Security" means any Securities bearing the legend specified
in EXHIBIT E evidencing all or a part of a series of Securities, authenticated
and delivered to the Depository for such series or its nominee, and registered
in the name of such Depository or nominee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means any obligations of such
Person and its subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock.
"Cash Equivalents" means: (i) any evidence of Indebtedness with a
maturity of 180 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or acceptances with a
maturity of 180 days or less of any financial institution that is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500,000,000; (iii) commercial paper with a maturity of
180 days or less issued by a corporation that is not an Affiliate of the Company
organized under the laws of any state of the United States or the District of
Columbia and rated A-1 (or higher) according to S&P or P-1 (or higher) according
to Moody's or at least an equivalent rating category of another nationally
recognized securities rating agency; (iv) any money market deposit accounts
issued or offered by a domestic commercial bank having capital and surplus in
excess of $500,000,000; and (v) repurchase agreements and reverse repurchase
agreements with a commercial bank or a member firm of the NYSE relating to
marketable direct obligations issued or unconditionally guaranteed by the
government of the United States of America or issued by any agency thereof and
backed by the full faith and credit of the United States of America, in each
case maturing within 180 days from the date of acquisition.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as
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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 50% of the
Voting Stock of all classes of Voting Stock of the Company; (ii) 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 with or into 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 (1) 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 (2) where (A) the outstanding
Voting Stock of the Company is changed into or exchanged for (x) Voting Stock of
the surviving corporation or the Company which is not Redeemable Capital Stock
or (y) cash, securities and other property (other than Capital Stock of the
surviving corporation) in an amount the payment of which would not violate the
terms of any agreement to which the Company is a party and (B) no "person" or
"group" other than Permitted Holders owns immediately after such transaction,
directly or indirectly, more than 50% of the total outstanding Voting Stock of
the surviving corporation, or (iii) the Company is liquidated or dissolved or
adopts a plan of liquidation or dissolution, other than in a transaction which
complies with the provisions of Article Seven.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
"Company" means Playtex Products, Inc., a corporation incorporated
under the laws of Delaware. To the extent necessary to comply with the
requirements of the provisions of Trust Indenture Act Sections 310 through 317
as they are applicable to the Company, the term "Company" shall include any
other obligor with respect to the Securities for purposes of complying with such
provisions, or any successor thereto succeeding pursuant to Article Seven
hereof.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice-Chairman, its President or a Vice President (regardless of Vice
Presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
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"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.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Thirteen.
"Corporate Trust Office" means the office of the Trustee or an
affiliate or agent thereof at which at any particular time the corporate trust
business for the purposes of this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at 140
Broadway, 12th Floor, New York, New York 10005.
"Credit Agreement" means the Credit Agreement dated as of July 21,
1997, by and among the Company, as the Borrower, DLJ Capital Funding, Inc., as
the Syndication Agent, and Wells Fargo Bank, N.A., as the Administrative Agent,
as such agreement may be amended, renewed, extended, substituted, refinanced,
restructured, replaced, supplemented or otherwise modified from time to time
(including, without limitation, any successive renewals, extensions,
substitutions, refinancings, restructurings, replacements, supplementations or
other modifications of the foregoing).
"Credit Facilities" means (a) the Credit Agreement and (b) the Term
Loan Agreement.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way or, in case no such sale takes place on such day, the average of the
closing bid and asked prices regular way, in either case as reported on the New
York Stock Exchange, Inc. (the "NYSE") or, if the Common Stock is not then
traded on the NYSE, on the principal national securities exchange on which the
Common Stock is listed or admitted for trading or (b) if the Common Stock is not
listed or admitted for trading on any national securities exchange, on the basis
of the last reported sale price or, in case no such sale takes place on such
day, the average of the highest reported bid and the lowest reported asked
quotation for the Common Stock, in either case as reported on the automatic
quotation system of the Nasdaq Stock Market or a similar service if Nasdaq is no
longer reporting such information or (c) if the Common Stock is not so listed or
traded as contemplated by clause (a) and quotations for the Common Stock are not
available as contemplated by clause (b), on such basis as the Board of Directors
shall establish in good faith.
"Default" means any condition or event that constitutes an Event of
Default or that, with notice or lapse of time or both, would (unless cured or
waived) become an Event of Default.
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"Depository" means The Depository Trust Company, its nominees and
successors.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness
under the Credit Facilities 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 amount, of at least $50,000,000 and is
specifically designated by the Company, with the consent of (x) the
Administrative Agent if the Credit Agreement is then in effect and (y) the
Facility Manager if the Term Loan Agreement is then in effect, in the instrument
evidencing such Senior Indebtedness or the agreement under which such Senior
Indebtedness arises as "Designated Senior Indebtedness."
"Event of Default" has the meaning specified in Article Four.
"Excess Payment" means the portion of the aggregate of any cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value and
described in a Board Resolution) of other consideration payable in respect of
any tender offer or other negotiated transaction by the Company or a Subsidiary
for all or any portion of the Company's Common Stock that is in excess of an
amount equal to the product of (x) the number of shares of Common Stock with
respect to which the aggregate tender offer or negotiated purchase consideration
is payable times (y) the Reference Price.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Facility Manager" means Wells Fargo Bank, N.A., the facility manager
under the Term Loan Agreement, and its successors and assigns.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of this Indenture.
"Global Security" means, as the context may require, any or all of the
Restricted Global Security and the Unrestricted Global Security.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
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 take 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
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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.
"Hazelbank" means Hazelbank, Inc., a Wisconsin corporation.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities arising in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit issued under letter of credit
facilities, acceptance facilities or other similar facilities and in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any Capital Stock of such Person, or any warrants, rights or options
to acquire such Capital Stock, now or hereafter outstanding, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements of such Person,
(v) all Capital Lease Obligations of such Person, (vi) all Indebtedness referred
to in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person, (viii) all Redeemable Capital Stock valued at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends, and (ix) any amendment, supplement, modification,
deferral, renewal, extension, refunding or refinancing of any Indebtedness of
the types referred to in clauses (i) through (viii) above. For purposes hereof,
the "maximum fixed repurchase price" of any Redeemable Capital Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by, the
fair market value of such Redeemable Capital Stock, such fair market value to be
determined in good faith by the Board of Directors of such Person.
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"Indenture" means this instrument as originally executed (including all
exhibits and schedules thereto) and as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means the Stated Maturity of a regular
installment of interest on the Securities or the Special Payment Date with
respect to Defaulted Interest.
"Interest Rate Agreements" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements) and/or other types of
interest rate hedging agreements from time to time.
"Issue Date" means January 29, 1999.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein provided
or as provided in this Indenture, whether at Stated Maturity or the Redemption
Date and whether by declaration of acceleration, call for redemption or
otherwise.
"Mondial" means Mondial Industries Limited Partnership, a Wisconsin
limited partnership.
"Moody's" means Moody's Investors Service, Inc. or any successor rating
agency.
"Non-Payment Default" means any event (other than a Payment Default)
the occurrence of which entitles one or more Persons to accelerate at such time
the maturity of any Designated Senior Indebtedness.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined
in Regulation S.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, Vice Chairman, President or a Vice President (regardless of Vice
Presidential designation), and by the Treasurer, Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee.
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<PAGE>
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or the Trustee, and who shall be reasonably acceptable
to the Trustee, including but not limited to an Opinion of Independent Counsel.
"Opinion of Independent Counsel" means a written opinion by someone who
is not an employee or consultant of the Company and who shall be reasonably
acceptable to the Trustee.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; provided, that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor reasonably satisfactory to the Trustee has been
made;
(c) Securities, except to the extent provided in Sections 302 and 303,
with respect to which the Company has effected defeasance or covenant defeasance
as provided in Article Three; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee and the Company proof reasonably satisfactory to each of them that such
Securities are held by a bona fide purchaser in whose hands the Securities are
valid obligations of the Company; provided, however, that in determining whether
the Holders of the requisite principal amount of Outstanding Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the reasonable satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
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"Paying Agent" means any Person authorized by the Company to pay the
principal, premium, if any, or interest on any Securities on behalf of the
Company.
"Payment Default" means any default in the payment of principal,
premium, if any, interest, commitment fees, letter of credit fees, reimbursement
obligations in respect of amounts owing under letters of credit or payments in
respect of interest under Interest Rate Agreements, in each case, on any
Designated Senior Indebtedness.
"Permitted Holders" means each of (i) HWH Capital Partners, L.P., HWH
Valentine Partners, L.P., HWH Surplus Valentine Partners, L.P. (each a
"Partnership") or Haas Wheat & Partners Incorporated and any of their respective
Affiliates; (ii) any officer or other member of management employed by the
Company or any Subsidiary as of the date of the Indenture; (iii) Robert B. Haas
and Douglas D. Wheat; (iv) family members or relatives of the persons described
in clauses (ii) and (iii); (v) any trusts created for the benefit of the persons
described in clause (ii), (iii) or (iv); (vi) in the event of the incompetence
or death of any of the persons described in clauses (ii), (iii) and (iv), such
person's estate, executor, administrator, committee or other personal
representatives or beneficiaries; and (vii) upon a distribution by a Partnership
of all or any of the stock of the Company, the limited partners of such
Partnership.
"Permitted Junior Securities" means, so long as the effect of any
exclusion employing this definition is not to cause the Securities to be treated
in any case or proceeding or similar event described in clauses (a), (b) or (c)
of the first paragraph of Section 1202 as part of the same class of claims as
the Senior Indebtedness or any class of claims pari passu with, or senior to,
the Senior Indebtedness, for any payment or distribution, debt or equity
securities of the Company or any successor Person provided for by a plan of
reorganization or readjustment that are subordinated at least to the same extent
that the Securities are subordinated to the payment of all Senior Indebtedness
then outstanding; provided that (1) if a new Person results from such
reorganization or readjustment, such Person assumes any Senior Indebtedness not
paid in full in cash or Cash Equivalents in connection with such reorganization
or readjustment and (2) the rights of the holders of such Senior Indebtedness
are not, without the consent of such holders, altered by such reorganization or
readjustment.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivisions thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 205 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
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"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A under the Securities Act.
"Redeemable Capital Stock" means any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or exchangeable
or otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Securities or is redeemable at the option of the holder thereof at any time
prior to any such Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such Stated Maturity at the option of
the holder thereof.
"Redemption Date" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be
redeemed pursuant to a provision in this Indenture means the price at which it
is to be redeemed pursuant to this Indenture.
"Reference Price" means, with respect to any tender offer or other
negotiated transaction by the Company or a Subsidiary for all or any portion of
the Company's Common Stock, the average of the Daily Market Prices per share of
Common Stock on the five consecutive trading days selected by the Company out of
the 10 consecutive trading days next succeeding the date of payment of such
negotiated transaction consideration or expiration of such tender offer, as the
case may be.
"Registration Rights Agreement" means the Registration Rights Agreement
dated the Issue Date between the Company and Mondial.
"Regular Record Date" for the interest payable on any Interest Payment
Date means January 15 or July 15, as the case may be (whether or not a Business
Day), next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Indenture or any other officer of
the Trustee to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Global Security" means a Security substantially in the form
of EXHIBIT A that includes the legends set forth in EXHIBIT A and EXHIBIT E.
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"Restricted Security" has the meaning set forth in Rule 144(a)(3) under
the Securities Act; provided that the Trustee shall be entitled to request and
conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Rule 144" means Rule 144 under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Securities" has the meaning specified in the first recital of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on any Indebtedness of the Company (other than as otherwise provided in
this definition), whether outstanding on the date hereof or thereafter created,
incurred or assumed, and whether at any time owing, actually or contingent,
unless in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities. Without limiting the generality of the foregoing, "Senior
Indebtedness" shall include the principal of, premium, if any, and interest
(including interest accruing after the filing of a petition initiating any
proceeding under any state, federal or foreign bankruptcy laws whether or not
allowable as a claim in such proceedings) on all obligations of every nature of
the Company from time to time owed to the lenders under (i) the Credit Agreement
and (ii) the Term Loan Agreement; provided, however, that any Indebtedness under
any refinancing, refunding, or replacement of the Credit Agreement or the Term
Loan Agreement shall not constitute Senior Indebtedness to the extent that the
Indebtedness thereunder is expressly subordinate to any other Indebtedness of
the Company. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (i) Indebtedness evidenced by the Securities, (ii) Indebtedness
(including but not limited to the Senior Subordinated Notes) that is subordinate
or junior in right of payment to any Indebtedness of the Company, (iii)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to the
Company, (iv) Indebtedness which is represented by Redeemable Capital Stock, (v)
any liability for foreign, federal, state, local or other taxes owed or owing by
the Company, (vi) Indebtedness of the Company to a Subsidiary or any other
Affiliate of the Company or any of such Affiliate's subsidiaries, (vii) that
portion of any Indebtedness which at the time of issuance is issued in violation
of this Indenture and (viii) the Company's 15 1/2% Junior Subordinated Notes due
2003.
"Senior Notes" means the Company's 87/8% Senior Notes due 2004.
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"Senior Subordinated Notes" means the Company's 9% Senior Subordinated
Notes due 2003.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 206.
"S&P" means Standard & Poor's Ratings Services, or any successor rating
agency.
"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, as the case may be, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company
subordinated in right of payment to the Securities.
"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.
"Term Loan Agreement" means the Term Loan Agreement dated as of July
21, 1997, by and among the Company, as the Borrower, the several banks and other
financial institutions from time to time parties thereto, DLJ Capital Funding,
Inc., as the Syndication Agent, and Wells Fargo Bank, N.A., as the Facility
Manager, as such agreement may be amended, renewed, extended, substituted,
refinanced, restructured, replaced, supplemented or otherwise modified from time
to time (including, without limitation, any successive renewals, extensions,
substitutions, refinancings, restructurings, replacements, supplementations or
other modifications of the foregoing).
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Unrestricted Global Security" means a Global Security substantially in
the form of EXHIBIT A that includes the legends set forth in EXHIBIT E but does
not include any of the legends set forth in EXHIBIT A.
"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
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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).
Section 102. Other Definitions.
Defined
Term in Section
- ---- ----------
"Act" 105
"Agent Members" 210
"Change of Control Offer" 908
"Change of Control Purchase Date" 908
"Change of Control Purchase Price" 908
"Conversion Date" 1302
"Conversion Price" 1301
"Conversion Shares" 1304
"covenant defeasance" 303
"Defaulted Interest" 206
"defeasance" 302
"Defeasance Redemption Date" 304
"Defeased Securities" 301
"Distribution Date" 1304
"Distribution Record Date" 1304
"Payment Blockage Period" 1203
"Physical Securities" 201
"Private Placement Legend" 211
"Purchase Date" 1304
"Rights" 1304
"Security Register" 204
"Security Registrar" 204
"Senior Representative" 1203
"Special Payment Date" 206
"Specified Date" 1302
"Supplemental Indenture" 701
"Surviving Entity" 701
"U.S. Government Obligations" 304
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Section 103. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate to the effect that all conditions
precedent, if any, provided for in this Indenture (including any covenant
compliance which constitutes a condition precedent) relating to the proposed
action have been complied with and an Opinion of Counsel to the effect that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or request as to
which the furnishing of any certificates and/or opinions is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to compliance with
a condition or covenant provided for in this Indenture shall include:
(a) a statement to the effect that each individual or firm signing such
certificate or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement to the effect that, in the opinion of each such
individual or such firm, he has made such examination or investigation as is
necessary to enable him or them to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual
or such firm, such condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or other
obligor of the Securities may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable
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care should know, that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is based are
erroneous. Any certificate or opinion of such an officer or of counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the Company with respect to
such factual matters and which contains a statement to the effect that the
information with respect to such factual matters is in the possession of the
Company, unless such officer or counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous. Opinions of Counsel
required to be delivered to the Trustee may have qualifications customary for
opinions of the type required and counsel delivering such Opinions of Counsel
may rely on certificates of the Company or government or other officials
customary for opinions of the type required, including certificates certifying
as to matters of fact, including that various financial covenants have been
complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 105. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The ownership of Securities shall be proved by the Security
Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act by the Holder of any Security shall bind every future Holder
of the same Security or the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, suffered or omitted to be done by the Trustee, any
Paying Agent, Conversion Agent or the Company in reliance thereon, whether or
not notation of such action is made upon such Security.
(d) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him
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the execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate of affidavit shall also
constitute sufficient proof of his authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
Section 106. Notices, Etc., to Trustee and the Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any other obligor of
the Securities shall be sufficient for every purpose hereunder if made, given,
furnished or filed, in writing, by first-class mail postage prepaid (return
receipt requested) or delivered in person or by recognized overnight courier to
or with the Trustee at 140 Broadway, 12th Floor, New York, New York 10005,
Attention: Corporate Trust Department or at any other address furnished in
writing prior thereto to the Holders, the Company or any other obligor of the
Securities by the Trustee; or
(b) the Company shall be sufficient for every purpose (except as
provided in Section 401(c)) hereunder if in writing and mailed, first-class
postage prepaid or delivered by recognized overnight courier, to the Company
addressed to it at 300 Nyala Farms Road, Westport, Connecticut 06880, Attention:
Chief Financial Officer, or at any other address previously furnished in writing
to the Trustee by the Company, with a copy, in the case of any notice under
Section 402, to Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the
Americas, New York, New York 10019-6064, Attention: Robert M. Hirsh, Esq.
Section 107. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before of after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
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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 mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, such provision
of the Trust Indenture Act shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and any
other obligor of the Securities shall bind their successors and assigns, whether
so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 113. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF).
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Section 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal or premium, if any, need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at Maturity or the Stated
Maturity, and no interest shall accrue with respect to such payment for the
period from and after such Interest Payment Date, Redemption Date, Maturity or
Stated Maturity, as the case may be, to the next succeeding Business Day.
Section 115. Schedules.
All schedules attached hereto are by this reference made a part with
the same effect as if herein set forth in full.
Section 116. Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
Section 117. No Set-Off.
Notwithstanding anything to the contrary contained herein, the Company
hereby waives the right to set-off against the unpaid principal of, premium, if
any, and interest on the Securities any payments or other amounts (including
indemnity payments) which the Company becomes entitled to receive from the
Holders under the Asset Purchase Agreement or otherwise.
Section 118. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture.
The following Trust Indenture Act terms used in this Indenture have the
following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder of a Security;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
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"obligor" on the Securities means the Company and any successor obligor
upon the Securities.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by Commission rule under the Trust Indenture Act have the meanings so
assigned to them.
ARTICLE TWO
THE SECURITIES
Section 201. Form and Dating.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of EXHIBIT A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Securities may have
notations, legends or endorsements approved as to form by the Company and
required by law, stock exchange rule, agreements to which the Company is subject
or usage. Each Security shall be dated the date of its authentication. The
Securities initially shall be issuable only in denominations of $1,000 and
integral multiples thereof and thereafter may be issued in any denominations.
Subject to the following paragraph, Securities shall be issued
initially under this Indenture in the form of one or more permanent certificated
Securities in registered form, in substantially the form set forth in EXHIBIT A
(the "Physical Securities"), with appropriate legends. Beneficial owners of
Physical Securities may request registration of such Physical Securities in
their names or the names of their nominees.
So long as the Securities are eligible for book-entry settlement with
the Depository, or unless otherwise required by law, all Securities that are so
eligible may be represented at the request of the Holders thereof by one or more
Global Securities in registered form, registered in the name of the Depository
or its nominee and deposited with the Trustee, as custodian for the Depository,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided, for credit by the Depository to the respective accounts of beneficial
owners of the Securities represented thereby (or such other accounts as they may
direct). The aggregate principal amount of the Restricted Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depository, as hereinafter provided.
If the Securities are to be issued in the form of one or more Global
Securities, then the Company shall execute and the Trustee shall authenticate
and deliver one or more Global Securities.
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The principal of and interest on Book-Entry Securities shall be payable
to the Depository or its nominee, as the case may be, as the sole registered
owner and the sole holder of the Book-Entry Securities represented thereby. The
principal of and interest on Securities in certificated form shall be payable at
the office of the Paying Agent.
Section 202. Execution and Authentication.
The Securities shall be executed on behalf of the Company by one of its
Chairman of the Board, Vice-Chairman, President or one of its Vice Presidents.
The signature of any of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices on the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities and the Officer's Certificate and
Opinion(s) of Counsel required by Section 103, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as
provided in this Indenture and not otherwise.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture. The form of Trustee's
certificate of authentication to be borne by the Securities shall be
substantially as set forth in EXHIBIT A hereto.
In case the Company, pursuant to Article Seven, shall be consolidated
or merged with or into any other Person or shall sell, convey, assign, transfer,
lease or otherwise dispose of substantially all of its properties and assets to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged or
consolidated, or the successor Person which shall have received a conveyance,
transfer, lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article Seven, any of
the Physical Securities authenticated or delivered prior to such consolidation,
merger, conveyance, transfer, lease or other disposition may, from time to time,
at the request of the successor Person, be exchanged for other Physical
Securities executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of like
tenor as the Securities surrendered for such exchange and of
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like principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Securities as specified in such request
for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of a Holder but without
expense to such Holder, shall provide for the exchange of all Securities at the
time Outstanding held by such Holder for Securities authenticated and delivered
in such new name.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities on behalf of the Trustee. Unless
limited by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any Security Registrar or
Paying Agent to deal with the Company and its Affiliates.
Section 203. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 902,
without charge to the Holders thereof. Upon surrender for cancellation of any
one or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 204. Registrar, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee, or such other office as the Trustee may designate, a register (the
register maintained in such office and in any other office or agency designated
pursuant to Section 902 being herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as the Security
Registrar may prescribe, the Company shall provide for the
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registration of Securities and of transfers of Securities. The Trustee or an
agent thereof or of the Company shall initially be the "Security Registrar" for
the purpose of registering Securities and transfers of Securities as herein
provided. The Company may appoint one or more co-registrars.
Subject to this Section 204 and Sections 210 and 211 hereof, upon
surrender for registration of transfer of any Physical Security at the office or
agency of the Company designated pursuant to Section 902, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Physical Securities of any
authorized denomination or denominations, of a like aggregate principal amount.
Notwithstanding anything in this Indenture to the contrary, prior to
January 30, 2000, no Security may be transferred, in whole or in part, to any
Person for any purpose, except by operation of law (including the laws of
descent of any jurisdiction) and except that Mondial may transfer a Security, or
a portion thereof, to any of its general or limited partners and Hazelbank may
transfer a Security, or a portion thereof, to any of its shareholders. For
purposes hereof, the Trustee shall be entitled to conclusively rely on the list
delivered to it pursuant to Section 601(c), as the same may be amended or
supplemented from time to time on written notice to it by the Company, in
determining whether a proposed transferee is a general or limited partner of
Mondial or a shareholder of Hazelbank.
At the option of the Holder, Physical Securities may be exchanged for
other Physical Securities of any authorized denomination or denominations, of a
like aggregate principal amount, upon surrender of the Physical Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer,
for exchange or redemption, or conversion into Common Stock, shall (if so
required by the Company or the Trustee) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar, duly executed by the Holder thereof or such Holder's
attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of,
transfer, exchange or redemption of Securities, but the Company may require
payment of a sum sufficient to pay all documentary, stamp or similar issue or
transfer taxes or other governmental charges that may be imposed in connection
with any registration of, transfer,
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exchange or redemption of Securities, other than exchanges pursuant to Section
202, 203, 205, 806, 908, 1008 or 1302 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
(i) 15 days before the mailing of a notice of redemption of the Securities
selected for redemption under Section 1004 and ending at the close of business
on the day of such mailing or (ii) 15 days before an Interest Payment Date and
ending on the close of business on the Interest Payment Date,(b) to register the
transfer of or exchange (i) any Security so selected for redemption in whole or
in part, except the unredeemed portion of Securities being redeemed in part, or
(ii) any Securities or portion thereof surrendered for conversion pursuant to
Article Thirteen.
Section 205. Mutilated, Destroyed, Lost and Stolen Securities.
If (a) any mutilated Security is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee, such security and/or indemnity, in each case as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a
replacement Security of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section, the
Company may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charge that may
be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company and any other obligor of the Securities,
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
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Section 206. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on the Stated Maturity of such interest shall be paid to the
Person in whose name that Security is registered at the close of business on the
Regular Record Date for such interest payment.
Any interest on any Security which is payable, but is not paid or duly
provided for on the Stated Maturity of such interest (or within 15 days after
the Stated Maturity of such interest) and interest on such defaulted interest at
the then applicable interest rate borne by the Securities, to the extent lawful
(such defaulted interest and interest thereon herein collectively called
"Defaulted Interest") shall forthwith cease to be payable to the Holder in whose
name such Security is registered as of the Regular Record Date; and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities are registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the
proposed payment (the "Special Payment Date"), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the Special Payment Date, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Subsection provided. Such notice
shall be received by the Trustee no less than 30 days prior to the
Special Payment Date. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which Special Record
Date shall be not more than 15 days and not less than 10 days prior to
the Special Payment Date and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company in writing of such Special Record Date and
Special Payment Date. In the name and at the expense of the Company,
the Trustee shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Payment Date
therefor to be mailed, certified or registered (return receipt
requested) first-class postage prepaid, to each Holder at his address
as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities are
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registered on such Special Record Date and shall no longer be payable
pursuant to the following subsection (b).
(b) The Company may make payment to the Persons in whose name
the Securities are registered at the close of business on the Special
Record Date and Special Payment Date of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, unless, after written
notice given by the Company to the Trustee of the proposed payment
pursuant to this subsection, such manner of payment shall not be deemed
practicable by the Trustee (acting reasonably). The Trustee shall give
prompt written notice to the Company of any such determination.
Subject to the foregoing provisions of this Section 206, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior such Interest Payment Date), interest on
such Security whose Stated Maturity is on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable (although such accrued
and unpaid interest will be deemed paid by the appropriate portion of the Common
Stock received by the holders upon such conversion).
Section 207. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of, premium, if any,
and (subject to Section 206) interest on such Security, for the purpose of
conversion and for all other purposes whatsoever, whether or not such Security
is overdue, and none of the Company, the Trustee or any agent of the Company or
the Trustee shall be affected by notice to the contrary.
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Section 208. Cancellation.
All Securities surrendered for payment, purchase, conversion,
redemption, registration of transfer or exchange shall be delivered to the
Trustee and, if not already canceled, shall be promptly canceled by it. The
Company or any Subsidiary may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company or any such Subsidiary may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee. The Company may not issue new Securities to replace Securities that it
has paid or that have been delivered to the Trustee for cancellation or that any
Holder has converted pursuant to Article Thirteen. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be destroyed in accordance with its
customary procedures and certification of their destruction delivered to the
Company unless by a Company Order received by the Trustee prior to such
destruction the Company shall direct that the canceled Securities be returned to
it. The Trustee shall provide the Company a list of all Securities that have
been canceled from time to time as requested by the Company.
Section 209. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 210. Book-entry Provisions for Global Security.
(a) Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers, in
whole or in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in a Global Security may be transferred
or exchanged for Physical Securities upon request of a Holder but only upon at
least 20 days' prior written notice given to the Trustee by or on behalf of the
Depository in accordance with the rules and procedures of the Depository and the
provisions of Section 211. In addition, Physical Securities shall be transferred
to all beneficial owners in exchange for their beneficial interests in a Global
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Security if (i) the Depository (x) notifies in writing the Company that it is
unwilling or unable to continue as Depository for such Global Security and a
successor depository is not appointed by the Company within 90 days of such
notice or (y) has ceased to be a clearing agency registered under the Exchange
Act, (ii) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of Physical Securities or (iii) an Event of Default
has occurred and is continuing and the Security Registrar has received a written
request from the Depository to issue Physical Securities.
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depository or
its nominee to the Trustee, as Security Registrar, for exchange or cancellation
as provided in this Article Two. If any Security is to be exchanged for other
Securities or canceled in part, or if a Physical Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, such Global
Security shall be so surrendered for exchange or cancellation as provided in
this Article Two or, if the Trustee is acting as custodian for the Depository or
its nominee (or is party to a similar arrangement) with respect to such Global
Security, the principal amount thereof shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or canceled, or the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, in each case by means of an appropriate
adjustment made on the records of the Trustee, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depository or its
authorized representatives to make a corresponding adjustment to its records
(including by crediting or debiting any Agent Member's account as necessary to
reflect any transfer or exchange of a beneficial interest). Upon any such
surrender or adjustment of a Global Security, the Trustee shall, subject to this
Article Two, authenticate and deliver any Securities issuable in exchange for
such Global Security (or any portion thereof) to or upon the order of, and
registered in such names as may be directed by, the Depository or its authorized
representative. Upon the request of the Trustee in connection with the
occurrence of any of the events specified in the preceding paragraph or in
paragraph (b) above, the Company shall promptly make available to the Trustee a
reasonable supply of Securities that are not in the form of Global Securities.
The Trustee shall be entitled to rely upon any order, direction or request of
the Depository or its authorized representative which is given or made pursuant
to this Article Two if such order, direction or request is given or made in
accordance with the Applicable Procedures.
(d) In connection with the transfer of the entire Global Security to
beneficial owners pursuant to paragraph (b), the Global Security shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Security, an equal aggregate principal amount of Physical Securities
of authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (d)
shall, except as
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otherwise provided by paragraphs (a)(i)(x) and (e) of Section 211, bear the
legend regarding transfer restrictions applicable to the Physical Securities set
forth in EXHIBIT A.
(f) If a Security is a Restricted Security and a Physical Security,
then as provided in this Indenture and subject to the limitations herein set
forth, the Holder, provided it is a Qualified Institutional Buyer or an
Institutional Accredited Investor, may exchange such Security for a Book-Entry
Security by instructing the Trustee (by completing the Transferee Certificate in
the form of EXHIBIT C hereto) to arrange for such Security to be represented by
a beneficial interest in the appropriate Restricted Global Security in
accordance with the customary procedures of the Depository.
(g) The Holder of a Global Security may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action such Holder is entitled to
take under this Indenture or the Securities.
Section 211. Special Transfer Provisions.
(a) Transfers of Physical Securities and Certain Restricted Global
Securities to Non-QIB Institutional Accredited Investors. The following
provisions shall apply with respect to the registration of any proposed transfer
of a Physical Security constituting a Restricted Security and certain Restricted
Global Securities to any Institutional Accredited Investor which is not a QIB:
(i) the Security Registrar shall register the transfer of any
Security constituting a Restricted Security, whether or not such Restricted
Security bears the private placement legend substantially in the form of the
first paragraph of EXHIBIT A hereto (the "Private Placement Legend"), if (x) the
requested transfer is after the first anniversary of the Issue Date and, to the
knowledge of the Trustee, the transferor is not an Affiliate of the Company or
(y) the proposed transferee has delivered to the Security Registrar a
certificate substantially in the form of EXHIBIT D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Restricted Global Security representing Securities
held by QIBs, upon receipt by the Security Registrar of (x) the certificate, if
any, required by paragraph (i) above and (y) instructions given in accordance
with the Depository's and the Security Registrar's procedures, (a) the Registrar
shall reflect on its books and records the date and (if the transfer does not
involve a transfer of outstanding Physical Securities) a decrease in the
principal amount of such Restricted Global Security in an amount equal to the
principal amount of the beneficial interest in such Restricted Global Security
to be transferred, and (b) (x) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Securities of like tenor and
amount or (y) the Security Registrar shall reflect on its books and records the
date and an increase in the principal amount of the Restricted Global
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Security representing Securities held by Institutional Accredited Investors in
an amount equal to the principal amount of such Restricted Global Security to be
so transferred.
(b) Transfers of Physical Securities and Certain Restricted Global
Securities to QIBs. The following provisions shall apply with respect to the
registration of any proposed transfer of a Physical Security constituting a
Restricted Security and certain Restricted Global Securities to a QIB:
(i) the Security Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has advised the Company and
the Security Registrar in writing, that the sale has been made in compliance
with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has otherwise
advised the Company and the Security Registrar in writing, that it is purchasing
the Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a QIB
within the meaning of Rule 144A, and is aware that the sale to it is being made
in reliance on Rule 144A, and acknowledges that it has received such information
regarding the Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member and the
Securities to be transferred consist of (a) Physical Securities which after
transfer are to be evidenced by a beneficial interest in the Restricted Global
Security representing Securities held by QIBs, or (b) an interest in the
Restricted Global Security representing Securities held by Institutional
Accredited Investors, upon receipt by the Security Registrar of instructions
given in accordance with the Depository's and the Security Registrar's
procedures, the Security Registrar shall reflect on its books and records the
date and an increase in the principal amount of such Restricted Global Security
in an amount equal (x) the principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities so transferred
or (y) the amount of the interest in the Restricted Global Security representing
Securities held by Institutional Accredited Investors to be so transferred (in
which case the Security Registrar shall reflect on its books and records the
date and an appropriate decrease in the principal amount of such Restricted
Global Security).
(c) Transfer of Physical Securities to Non-U.S. Persons
The following provisions shall apply with respect to the registration
of any proposed transfer of a Physical Security constituting a Restricted
Security to any Non-U.S. Person:
(i) the Security Registrar shall register the transfer of any
Security constituting a Restricted Security, whether or not such Restricted
Security bears the Private Placement Legend, if (x) the requested transfer is
after the first anniversary of the Issue Date
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and, to the knowledge of the Trustee, the transferor is not an Affiliate of the
Company or (y) each of the proposed transferee and transferor has delivered to
the Security Registrar a written certification that such transfer is being made
in compliance with Regulation S (or other evidence satisfactory to the Trustee);
and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in a Restricted Global Security, upon receipt by the
Security Registrar of (x) the certificate, if any, required by (i) above and (y)
instructions given in accordance with the Depository's and the Security
Registrar's procedures, (a) the Security Registrar shall reflect on its books
and records the date and (if the transfer does not involve a transfer of
outstanding Physical Securities) a decrease in the principal amount of such
Restricted Global Security in an amount equal to the principal amount of the
beneficial interest in such Restricted Global Security to be so transferred, and
(b) the Company shall execute and the Trustee shall authenticate and deliver one
or more Physical Securities of like tenor and amount.
(d) Certain Transfers and Exchanges.
(i) Non-Global Restricted Security to Global Security. If the
Holder of a Restricted Security (other than a Global Security) wishes at any
time to transfer all or any portion of such Security to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the Restricted
Global Security, such transfer may be effected, subject to the Applicable
Procedures, only in accordance with this clause (i). Upon receipt by the
Trustee, as Security Registrar, of (A) such Security and written instructions
given by or on behalf of such Holder as provided in Section 210 directing the
Trustee to credit or cause to be credited to a specified Agent Member's account
a beneficial interest in the Restricted Global Security, in a specified
principal amount equal to the principal amount of the Restricted Security (or
portion thereof) to be so transferred, and (B) an appropriately completed
certificate substantially in the form set forth on EXHIBIT C hereto, if the
specified amount is to be credited with a beneficial interest in the Restricted
Global Security, signed by or on behalf of such Holder, then the Trustee, as
Security Registrar, shall cancel such Restricted Security (and issue a new
Security in respect of any untransferred portion thereof as provided in Section
210) and increase the principal amount of the Restricted Global Security by the
specified principal amount.
(ii) Other Exchange. Securities that are not Global Securities
may be exchanged (on registration of transfer or otherwise) for Securities that
are not Global Securities or for beneficial interests in a Global Security (if
any is then outstanding) only in accordance with such procedures, which shall be
substantially consistent with the provisions of clause (i) above (including the
certification requirements intended to insure that transfers or beneficial
interests in a Global Security comply with Rule 144A, Regulation S, or another
exemption from the Securities Act) and any Applicable Procedures, as may be from
time to time adopted by the Company and the Trustee.
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(e) Restrictive Legends. Upon the registration of transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the Security
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of Securities
bearing the Private Placement Legend or other applicable legend, the Security
Registrar shall deliver only Securities that bear the Private Placement Legend
or such other legend unless (i) the circumstance contemplated by paragraph
(a)(i)(x) of this Section 211 exists or (ii) there is delivered to the Security
Registrar an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither the legends sought to be removed nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of this Indenture or the Securities Act.
(f) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such Security acknowledges the restrictions on
transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 210 or this Section
211 in accordance with its customary procedures. The Company shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Security Registrar.
Section 212. Conversion Notices.
Conversion notices shall be substantially in the form of EXHIBIT B
hereto.
ARTICLE THREE
DEFEASANCE AND COVENANT DEFEASANCE
Section 301. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 302 or Section 303 be
applied to all of the Outstanding Securities (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Three.
Section 302. Defeasance and Discharge.
Upon the Company's exercise under Section 301 of the option applicable
to this Section 302, each of the Company and any other obligor on the Securities
shall be
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deemed to have been discharged from its obligations with respect to the Defeased
Securities on the date the conditions set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company and any other obligor of the Securities shall be deemed to have paid and
discharged the entire indebtedness represented by the Defeased Securities, which
shall thereafter be deemed to be "Outstanding" only for the purposes of Section
305 and the other Sections of this Indenture referred to in (a) and (b) below,
and to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company and upon written request, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of Defeased Securities to receive, solely from the trust fund described
in Section 304 and as more fully set forth in such Section, payments in respect
of the principal of, premium, if any, and interest on such Securities when such
payments are due, (b) the Company's obligations with respect to such Defeased
Securities under Sections 203, 204, 205, 902 and 903, (c) the rights, powers,
trusts, duties, indemnities and immunities of the Trustee hereunder, and (d)
this Article Three. Subject to compliance with this Article Three, the Company
may exercise its option under this Section 302 notwithstanding the prior
exercise of its option under Section 303 with respect to the Securities.
Section 303. Covenant Defeasance.
Upon the Company's exercise under Section 301 of the option applicable
to this Section 303, each of the Company and any other obligor on the Securities
shall be released from its obligations under any covenant or provision contained
in Sections 905 through 908, inclusive, with respect to the Defeased Securities
on and after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"), and the Defeased Securities shall thereafter be deemed
to be not "Outstanding" for the purposes of any direction, waiver, consent or
declaration or Act of Holders (and the consequences of any thereof) in
connection with such covenants and provisions, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Defeased Securities, the Company and
any other obligor of the Securities may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or Article, whether directly or indirectly, by reason of any reference
elsewhere herein or in such Defeased Securities to any such Section or Article
or by reason of any reference in any such Section or Article to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default, under Section 401(c), (d) or (g)
but, except as specified above, the remainder of this Indenture and such
Defeased Securities shall be unaffected thereby.
Section 304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
302 or Section 303 to the Defeased Securities:
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(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (a) United States dollars in
an amount, (b) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in an
amount, or (c) a combination thereof, in such amounts as will be sufficient, as
reflected in the written report of a nationally recognized firm of independent
public accountants or a nationally recognized investment banking firm delivered
to the Trustee, to pay and discharge (and which shall be applied by the Trustee
to pay and discharge) the principal of, premium, if any, and interest on, the
Defeased Securities on the Stated Maturity (or on any date after January 29,
2002 (such date being referred to as the "Defeasance Redemption Date"), if prior
to electing either defeasance or covenant defeasance, the Company has delivered
to the Trustee an irrevocable notice to redeem all of the outstanding Securities
on the Defeasance Redemption Date) of such principal or installment of interest;
provided that the Trustee (or such qualifying trustee) shall have been
irrevocably instructed to apply such United States dollars or the proceeds of
such U.S. Government Obligations to said payments with respect to the
Securities. For this purpose, "U.S. Government Obligations" means securities
that are (i) direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation evidenced
by such depository receipt.
(2) In the case of an election under Section 302, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States to the effect that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that the Holders of the Outstanding Securities
will not recognize income, gain or loss for federal income tax purposes as a
result of such defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance had not occurred.
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(3) In the case of an election under Section 303, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States to the effect that the Holders of the Outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
(4) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as subsections 401(e) and (f)
are concerned, at any time during the period ending on the 91st day after the
date of deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee
to have a conflicting interest with respect to any securities of the Company.
(6) Such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a Default under, this Indenture or a breach or
violation of any provision of any agreement to which the Company is a party or
by which it is bound.
(7) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel in the United States to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Securities over the other creditors of the
Company or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others.
(9) No event or condition shall exist that would prevent the Company
from making payments of the principal of, premium, if any, and interest on the
Securities on the date of such deposit or at any time ending on the 91st day
after the date of such deposit.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each to the effect that all
conditions precedent provided for relating to either the defeasance under
Section 302 or the covenant defeasance under Section 303 (as the case may be)
have been complied with as contemplated by this Section 304.
Opinions of Counsel required to be delivered under this Section may
have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required, which
certificates shall be limited to matters of fact, including that various
financial covenants have been complied with.
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Section 305. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 903, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 304 in respect of the
Defeased Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 304 or the principal and interest received in
respect thereof, other than any such tax, fee or other charge which by law is
for the account of the Holders of the Defeased Securities.
Anything in this Article Three to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations held by it as
provided in Section 304 which, in the opinion of a nationally recognized firm of
independent public accountants or nationally recognized investment banking firm
expressed in a written report delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect defeasance
or covenant defeasance. In the event of an error in any calculation resulting in
a withdrawal hereunder, the Company shall deposit an amount equal to the amount
erroneously withdrawn as promptly as practicable after becoming aware of such
error.
Section 306. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 302 or 303, as
the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section 302
or 303, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such United States dollars or U.S. Government Obligations
in accordance with Section 302 or 303, as the case may be; provided, however,
that (a) if the Company makes any payment to the Trustee or Paying Agent of
principal, premium, if any, or interest on any Security following the
reinstatement of its obligations, the Trustee or Paying Agent shall promptly pay
any such amount to the Holders of the Securities and the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the United States dollars and U.S. Government Obligations held by
the Trustee or Paying Agent and (b) the Trustee or Paying Agent shall
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return all such United States dollars and U.S. Government Obligations to the
Company promptly after receiving a Company Request therefor at any time, if the
Trustee or Paying Agent receives written notice from the Company that such
reinstatement of the Company's obligations has occurred and continues to be in
effect at such time.
ARTICLE FOUR
REMEDIES
Section 401. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on any
Security when it becomes due and payable, and such default shall continue for a
period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security when and as the same shall become due and
payable at its Maturity (upon acceleration, optional redemption or otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company under this Indenture (other than a default
in the performance, or breach, of a covenant or agreement which is specifically
dealt with in Section 401(a) or (b) or in clauses (ii) or (iii) of this Section
401(c)) and such default or breach shall continue for a period of 30 days after
written notice has been given, by certified mail, (x) to the Company by the
Trustee or (y) to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities; (ii) there shall be a
default in the performance or breach of the provisions of Article Seven; or
(iii) the Company shall have failed to make or consummate a Change of Control
Offer in accordance with the provisions of Section 908;
(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company or any Subsidiary then has
outstanding Indebtedness in excess of $25,000,000 in the aggregate and, if not
already matured at its final maturity in accordance with its terms, such
Indebtedness shall have been accelerated;
(e) 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 in an
involuntary case or proceeding under any applicable Bankruptcy Law or (ii) a
decree or order adjudging the Company bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or
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composition of or in respect of the Company under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part of
its property, or ordering the winding up or liquidation of its affairs, and any
such decree or order for relief shall continue to be in effect, or any such
other decree or order shall be unstayed and in effect, for a period of 60
consecutive days;
(f) (i) the Company 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 consents to the entry of a decree or
order, for relief in respect of the Company 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 files a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state law, (iv) the Company (x) 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 or of any
substantial part of its property, (y) makes an assignment for the benefit of
creditors or (z) admits in writing its inability to pay its debts generally as
they become due or (v) the Company takes any corporate action in furtherance of
any such actions in this paragraph (f); or
(g) one or more final judgments, orders or decrees for the payment of
money in excess of $15,000,000, either individually or in the aggregate, shall
be entered against the Company or any Subsidiary or any of their respective
properties and shall not be discharged and either (i) enforcement proceedings
shall have been commenced upon such judgment, order or decree or (ii) 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.
Section 402. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Sections 401(e) or (f) with respect to the Company) occurs and is continuing,
the Trustee or the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities may, and the Trustee upon the request of the Holders
of not less than 25% in aggregate principal amount of the Outstanding Securities
shall, declare all the Securities to be due and payable immediately in an amount
equal to the principal amount of the Securities, together with accrued and
unpaid interest, if any, to the date the Securities shall have become due and
payable, by a notice in writing to the Company (and to the Trustee, if given by
Holders), and upon any such declaration such amount shall become immediately due
and payable. If an Event of Default specified in Sections 401(e) or (f) occurs
with respect to the Company and is continuing, then all the Securities shall
ipso facto become and be immediately due and payable, in an amount equal to the
principal amount of the Securities, together with accrued and unpaid interest,
if any, to the date the Securities become due and payable, without any
declaration or other act on the part of the Trustee or any Holder.
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At any time after such declaration of acceleration has been made and
before judgment or decree for payment of the money due has been obtained by the
Trustee as provided hereinafter in this Article, the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities, by written
notice of 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 and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 507,
(ii) all overdue interest on the Securities,
(iii) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Securities,
and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities; and
(b) all Events of Default, other than the non-payment of principal of
the Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 413.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
Section 403. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(a) default is made in the payment of any interest on any Security when
such interest becomes due and payable and which default continues for a period
of 30 days, or
(b) default is made in the payment of the principal, premium, if any,
on any Security at the Stated Maturity (upon acceleration, optional or mandatory
redemption, required repurchase or otherwise) thereof, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal and premium, if any, and interest, with interest upon the overdue
principal and premium, if any, and, to the extent that payment of such interest
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shall be legally enforceable, upon overdue installments of interest, at the rate
borne by the Securities.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture by such appropriate private or judicial proceedings
as the Trustee shall deem most effectual to protect and enforce such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein or therein, or
to enforce any other proper remedy or to enforce any other proper remedy,
subject however to Section 412.
The rights and remedies under this Section 403 are in addition to the
other rights and remedies under this Article Four.
Section 404. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Company or any other obligor upon
the Securities, or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company or the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities and
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements add advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 507.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, composition or other similar
arrangement affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 405. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amounts due the Trustee under Section 507, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.
Section 406. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article or
otherwise on behalf of the Holders or the Trustee pursuant to this Article or
through any proceeding or any arrangement or restructuring in anticipation or in
lieu of any proceeding contemplated by this Article shall be applied, subject to
applicable law, in the following order, at the date or dates fixed by the
Trustee and in case of the distribution of such money on account of principal,
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender hereof
if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 507;
SECOND: Subject to Article Twelve, to the payment in full of the
amounts then due and unpaid upon the Securities for principal, premium, if any,
and interest, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind according to
the amounts due and payable in such Securities for principal, premium, if any,
and interest; and
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THIRD: Subject to Article Twelve, the balance, if any, to the Person or
Persons entitled thereto as a court of competent jurisdiction shall direct, or
to the Company, provided that all sums due and owing to the Holders and the
Trustee have been paid in full as required by this Indenture.
Section 407. Limitation on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the
Securities, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered, and if requested have
provided, to the Trustee an indemnity satisfactory to the Trustee in its sole
discretion against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer (and if requested, provision) of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner provided in
this Indenture and for the equal and ratable benefit to all the Holders.
Section 408. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, but subject to
Article Twelve, the Holder of any Security shall have the right on the terms
stated herein, which is absolute and unconditional, to receive payment of the
principal of, premium, if any, and (subject to Section 206) interest on such
Security on the respective Stated Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date), to
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convert the Securities in accordance with Article Thirteen and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
Section 409. Restoration of Rights and Remedies.
If the Trustee or any Holders has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, (a) the Company and any other obligor under
the Securities, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder, and (b) thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 410. Rights and Remedies Cumulative.
Except as provided in Section 205, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 411. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
Section 412. Control by Holders.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture (including, without limitation, Section 407) or expose the
Trustee to personal liability; and
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(b) subject to the provisions of Section 315 of the Trust Indenture
Act, the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
Section 413. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest on
any Security, or
(b) in respect of a covenant or provision hereof which under Article
Eight cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected by such modification or amendment.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 414. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of, premium, if any, or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 415. Waiver of Stay, Extension or Usury Laws.
Each of the Company and any other obligor under the Securities
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim to take the
benefit or advantage of, any stay or extension law
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or any usury or other similar law wherever enacted, now or at any time hereafter
in force, which would prohibit or forgive the Company or any other obligor under
the Securities from paying all or any portion of the principal of, premium, if
any, or interest on the Securities contemplated herein or in the Securities or
which may affect the covenants or the performance of this Indenture; and each of
the Company and any other obligor under the Securities (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 416. Remedies Subject to Applicable Law.
All rights, remedies and powers provided by this Article may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Indenture are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Indenture invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
applicable law.
ARTICLE FIVE
THE TRUSTEE
Section 501. Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or obligations shall
be implied in this Indenture that are adverse to the Trustee; and
(2) in the absence of bad faith or willful misconduct on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 501;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
of the Holders of a majority in principal amount of Outstanding
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power confirmed upon the Trustee under this Indenture.
(d) No provision of Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 501.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
Section 502. Notice of Defaults.
Within 30 days after a Responsible Officer of the Trustee receives
notice of the occurrence of any Default, the Trustee shall transmit by mail to
all Holders or any other Persons entitled to receive reports pursuant to Trust
Indenture Act Section 313(c), as their names and addresses appear in the
Security Register, notice of such Default, unless such Default shall have been
cured or waived; provided, however, that, except in the case of a Default in the
payment of the principal of, premium, if any, or interest on any Security, the
Trustee shall be protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders.
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Section 503. Certain Rights of Trustee.
Subject to the provisions of Trust Indenture Act Sections 315(a)
through 315(d):
(a) the Trustee may rely conclusively and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) wherever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to the taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) in the absence of bad faith on its part, may
rely conclusively, upon an Officers' Certificate and/or an Opinion of Counsel;
(d) the Trustee may consult with counsel and any written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon in accordance with such advice or Opinion
of Counsel;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee in is
sole discretion against the costs, expenses and liabilities which might be
incurred therein or thereby in compliance with such request or direction;
(f) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence or willful misconduct of the Trustee;
(g) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document;
but the Trustee in its discretion may make such further inquiry or investigation
in accordance with any of the provisions of this Indenture into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further
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inquiry or investigation, it shall be entitled to examine such relevant books,
records and premises of the Company as may be reasonable, personally or by agent
or attorney;
(h) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(i) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights and powers; and
(j) the Trustee shall not be charged with knowledge of any Default or
Event of Default unless either (i) a Responsible Officer shall have actual
knowledge thereof or (ii) the Trustee shall have received notice thereof in
accordance with Section 106 hereof from the Company of any Holder of Notes.
Section 504. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 505. Trustee and Agents May Hold Securities; Collections; Etc.
The Trustee, any Paying Agent, Conversion Agent, Security Registrar or
any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities, with the same rights it would have if
it were not the Trustee, Paying Agent, Conversion Agent, Security Registrar or
such other agent and, subject to Trust Indenture Act Sections 310 and 311, may
otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
the Trustee, Paying Agent, Conversion Agent, Security Registrar or such other
agent.
Section 506. Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law.
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Section 507. Compensation and Indemnification of Trustee and its Prior
Claim.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder (which, to the extent lawful, shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Company covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence, bad faith or
willful misconduct. When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 401(e) or Section
401(f), the expenses (including the reasonable compensation and the expenses and
disbursements of its counsel) and the compensation for the services are intended
to constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law. The Company also covenants to
indemnify the Trustee and each predecessor Trustee, and their respective
officers, agents and employees for, and to hold them harmless against, any
claim, loss, liability, tax, assessment or other governmental charge (other than
taxes applicable to the Trustee's compensation hereunder) or expense incurred
without negligence, bad faith or willful misconduct on its part, arising out of
or in connection with the acceptance or administration of this Indenture or the
trusts hereunder and its duties hereunder, including enforcement of this Section
507 and also including any liability which the Trustee may incur as a result of
failure to withhold, pay or report any tax, assessment or other governmental
charge, and the costs and expenses of defending itself against or investigating
any claim of liability in the premises. The obligations of the Company under
this Section to compensate and indemnify the Trustee and each predecessor
Trustee and to pay or reimburse the Trustee and each predecessor Trustee for
expenses, disbursements and advances shall constitute an additional obligation
hereunder and shall survive the satisfaction and discharge of this Indenture and
the resignation or removal of the Trustee and each predecessor Trustee. As
security for the performance of the obligations of the Company under this
Section, the Trustee shall have a lien prior to the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of Holders of particular Securities.
Section 508. Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
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Section 509. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under Trust Indenture Act Section 310(a)(1) and which shall
have a combined capital and surplus of at least $100,000,000, and have a
Corporate Trust Office in The City of New York to the extent there is such an
institution eligible and willing to serve. If the Trustee does not have an
office in The City of New York, the Trustee shall appoint an agent in The City
of New York reasonably acceptable to the Company to conduct any activities which
the Trustee is required under this Indenture to conduct in The City of New York.
The Trustee may not rescind any such agency without the consent of the Company,
which consent may not be unreasonably withheld, unless the Trustee appoints a
satisfactory replacement or has a Corporate Trust Office in The City of New
York. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of federal, state, territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
Section 510. Resignation and Removal; Appointment of Successor Trustee.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 511.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign by giving written notice thereof to the Company. Upon receiving
such notice of resignation, the Company shall use its best efforts to promptly
appoint a successor Trustee by Board Resolution or written instrument executed
by authority of the Board of Directors of the Company, a copy of which shall be
delivered to the resigning Trustee and a copy to the successor Trustee. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may, or any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee. Such court may thereupon, after such notice,
if any, as it may deem proper, appoint a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of
not less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
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(1) the Trustee shall fail to comply with the provisions of
Trust Indenture Act Section 310(b) after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 509
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 414, any Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution or written instrument executed by authority of
the Board of Directors of the Company, shall use its best efforts to promptly
appoint a successor Trustee and shall comply with the applicable requirements of
Section 511. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, the Company or a court of
competent jurisdiction has not appointed a successor Trustee, a successor
Trustee shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities delivered to the Company and the retiring
Trustee, and the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the
successor Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders of the Securities and accepted
appointment in the manner hereinafter provided, any Holder of a Security who has
been a bona fide Holder for at least six months may, subject to Section 414, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office or agent hereunder.
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Section 511. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee under this Indenture;
but, nevertheless, on the written request of the Company or the successor
Trustee, upon payment of its charges then unpaid, such retiring Trustee shall
pay over to the successor Trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
Trustee all such rights, powers, duties and obligations.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights and powers. Any Trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property or funds held or
collected by such Trustee or such successor Trustee to secure any amounts then
due such Trustee pursuant to the provisions of Section 507.
No successor Trustee with respect to the Securities shall accept
appointment as provided in this Section 511 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article Five and shall
have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 509 in
The City of New York.
Upon acceptance of appointment by any successor Trustee as provided in
this Section 511, the Company shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
510. If the Company fails to give such notice within 10 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be given at the expense of the Company.
Section 512. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided such corporation shall be eligible under
Trust Indenture
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Act Section 310(a) and this Article Five and shall have a combined capital and
surplus of at least $100,000,000.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
Securities either in the name of any predecessor hereunder or in the name of the
successor Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have; provided that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, amalgamation, conversion or consolidation.
Section 513. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SIX
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 601. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 10 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date;
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a list
of similar form and content to that in subsection (a) hereof as of a date not
more than 15 days prior to the time such list is furnished; and
(c) on the Issue Date, a list of the names and addresses of the general
and limited partners of Mondial and the shareholders of Hazelbank;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no list that would otherwise be required by subsections (a) or (b)
above need be furnished.
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Section 602. Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 312.
Section 603. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the first
May 15 after the issuance of Securities, the Trustee shall transmit by mail to
all Holders, as their names and addresses appear in the Security Register, as
provided in Trust Indenture Act Section 313(c), a brief report dated as of such
May 15 in accordance with and with respect to the matters required by Trust
Indenture Act Section 313(a).
(b) The Trustee shall promptly transmit to the Company a copy of any
report it transmits to Holders pursuant to this Section 603.
Section 604. Reports by Company.
The Company shall:
(a) file with the Trustee within 30 days after the Company is required
to file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company is required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of said
Sections, then it shall (i) deliver to the Trustee annual audited financial
statements of the Company and its Subsidiaries, prepared on a Consolidated basis
in conformity with GAAP, within 120 days after the end of each fiscal year of
the Company, and (ii) file with the Trustee and the Commission, in accordance
with, and so long as not prohibited by, the rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the
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conditions and covenants of this Indenture as is required from time to time by
such rules and regulations (including such rules and regulations, if any,
referred to in Trust Indenture Act Section 314(a)); and
(c) transmit by mail to all Holders or any other Persons entitled to
receive a report pursuant to Trust Indenture Act Section 313(c), within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Trust Indenture Act Section 313(c), such summaries of any
information, documents and reports required to be filed by the Company pursuant
to subsections (a) and (b) of this Section as is required and not prohibited by
rules and regulations prescribed from time to time by the Commission.
ARTICLE SEVEN
CONSOLIDATION, MERGER, SALE OF ASSETS
Section 701. Company May Merge, Consolidate, Etc., Only on Certain
Terms.
(a) The Company shall not, in a single transaction or 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 to any Person or group of affiliated Persons, or
permit any of its Subsidiaries to enter into any such transaction or
transactions if such transaction or transactions, in the aggregate, would result
in a sale, assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company and its
Subsidiaries on a Consolidated basis to any other Person or group of affiliated
Persons, unless at the time and after giving effect thereto:
(i) either (a) the Company shall be the continuing
corporation, or (b) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or the Person
which acquires by sale, assignment, conveyance, transfer, lease or
disposition all or substantially all of the properties and assets of
the Company and its Subsidiaries on a Consolidated basis (the
"Surviving Entity") shall be a corporation, partnership, limited
liability company or business trust duly organized and validly existing
under the laws of the United States of America, any state thereof or
the District of Columbia and shall, in either case, expressly assume,
by a supple mental indenture hereto, executed and delivered to the
Trustee, in form and substance reasonably satisfactory to the Trustee,
all the obligations of the Company under the Securities and this
Indenture, and this Indenture shall remain in full force and effect;
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(ii) immediately before and immediately after giving effect to
such transaction on a pro forma basis, no Default or Event of Default
shall have occurred and be continuing;
(iii) 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, lease or other
transaction and the supplemental indenture in respect thereto comply
with the provisions described in this Section 701(a) and that all
conditions precedent herein provided for in this Section 701(a)
relating to such transaction have been complied with.
Section 702. 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 on a Consolidated basis of the Company in accordance with Section 701
with respect to which the Company is not the continuing corporation, the
successor Person formed by such consolidation or into which the Company 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 under this Indenture,
with the same effect as if such successor had been named as the Company. When a
successor assumes all the obligations of its predecessor under this Indenture or
the Securities, the predecessor shall be released from those obligations;
provided that, in the case of a transfer by lease, the predecessor shall not be
released from the payment of principal and interest on the Securities.
Any successor to the Company described in the foregoing paragraph may
cause to be signed, and may issue either in its own name or in the name of the
Company, any or all of the Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor thereafter shall cause
to be signed and delivered to the Trustee for that purpose. All the Securities
so issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance with
the terms of this Indenture as though all of such Securities had been issued at
the date of the execution of this Indenture.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 801. Supplemental Indentures and Agreements Without Consent of
Holders.
Without the consent of any Holders, the Company and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form and substance reasonably satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power conferred upon the Company in this
Indenture or the Securities;
(c) to cure any ambiguity or to correct or supplement any provision in
this Indenture or the Securities which may be defective or inconsistent with any
other provision in this Indenture or the Securities;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by Section 805 or otherwise;
(e) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder;
(f) to comply with Section 1314; and
(g) to clarify or make any other provisions with respect to matters or
questions arising under this Indenture or the Securities; provided that, in each
case, such clarification or provision thus made shall not adversely affect the
interests of the Holders.
Section 802. Supplemental Indentures and Agreements with Consent of
Holders.
Except as permitted by Section 801, with the consent of the Holders of
not less than a majority in aggregate principal amount of the Outstanding
Securities, by Act of said Holders delivered to the Company and the Trustee, the
Company and the Trustee may (i) enter into an indenture or indentures
supplemental, in form and substance reasonably satisfactory to the Trustee, for
the purpose of adding any provisions to or amending,
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modifying or changing in any manner or eliminating any of the provisions of this
Indenture or the Securities (including, but not limited to, for the purpose of
modifying in any manner the rights of the Holders under this Indenture or the
Securities) or (ii) waive compliance with any provision in this Indenture or the
Securities (other than waivers of past Defaults covered by Section 413 and
waivers of covenants which are covered by Section 910); provided, however, that
no such supplemental indenture, agreement or instrument shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security or waive a default in the payment of the principal
or interest on any Security or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
change the coin or currency in which the principal of any Security or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment after the Stated Maturity thereof;
(b) amend, change or modify 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 908, including amending, changing or modifying any of
the provisions or definitions with respect thereto.
(c) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain Defaults
hereunder and their consequences provided for in this Indenture;
(d) modify any of the provisions of this Section or Sections 413 or
910, except to increase the percentage of Outstanding Securities required for
such actions or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each Security
affected thereby;
(e) except as otherwise permitted under Article Seven, consent to the
assignment or transfer by the Company of any of its rights and obligations under
this Indenture; or
(f) amend or modify any of the provisions of this Indenture relating to
the subordination of the Securities in any manner adverse to the Holders of the
Securities.
Upon the written request of the Company accompanied by a copy of a
Board Resolution authorizing the execution of any such supplemental indenture,
and upon the filing with the Trustee of evidence of the consent of Holders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture.
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It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
An amendment under this Section 802 or Section 801 may not make any
change that adversely affects the rights under Article Twelve of any holder of
Senior Indebtedness then outstanding unless the requisite holders of each issue
of Senior Indebtedness affected thereby consent to such change.
Section 803. Execution of Supplemental Indentures and Agreements.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and (subject to Trust Indenture Act Section 315(a)
through 315(d) and Section 603 hereof) shall be fully protected in relying upon,
in addition to the documents required by Section 103, an Opinion of Counsel and
an Officers' Certificate to the effect that the execution of such supplemental
indenture, agreement or instrument is authorized or permitted by this Indenture.
The Trustee may, but shall not be obligated to, enter into any such supplemental
indenture, agreement or instrument which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Section 804. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 805. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 806. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Eight may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities modified so as to conform to any such supplemental indenture, in
the opinion of the Trustee and the Board of Directors, may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
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Section 807. Record Date.
If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
but shall not be obligated to, fix a record date for the purpose of determining
the Holders entitled to consent to any supplemental indenture, agreement or
instrument or any waiver, and shall promptly notify the Trustee of any such
record date. If a record date is fixed those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such supplemental indenture, agreement or instrument or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. The record date shall be a date
no more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such solicitation is completed.
No such consent shall be valid or effective for more than six months after such
record date. Subject to applicable law, until any supplemental indenture,
agreement, instrument or waiver becomes effective, or a consent to it by a
Holder of a Security shall cease to be valid and effective as set forth in the
preceding sentence, such consent is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
ARTICLE NINE
COVENANTS
Section 901. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of, premium, if
any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
Section 902. Maintenance of Office or Agency.
The Company will maintain in The City of New York, an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer, exchange or conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The office of the Trustee at 140 Broadway,
12th Floor, New York, New York 10005 shall be such office or agency of the
Company, unless the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and
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the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such office or agency.
Section 903. Money for Security Payments to Be Held in Trust.
The Company will, on or before each due date of the principal of,
premium, if any, or interest on, any Securities, deposit with a Paying Agent
(which shall not be the Company) a sum in same day funds sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal, premium,
if any, or interest;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent;
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for any purpose, by Company Order direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same terms as those upon
which such sums were
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held by such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent in trust for
the payment of the principal of, premium, if any, or interest on any Security
and remaining unclaimed for two years after such principal and premium, if any,
or interest has become due and payable shall promptly be paid to the Company
upon Company Request; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such payment to the Company, may at the expense of the
Company cause to be published once, in The New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance on such money
then remaining will promptly be repaid to the Company.
Section 904. Corporate Existence.
Subject to Article Seven, 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 related rights and franchises (charter and statutory) of the
Company and each Subsidiary; provided, however, that the Company shall not be
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof would not reasonably be expected to have a material adverse effect on
the ability of the Company to perform its obligations hereunder; and provided,
further, however, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Subsidiary or any of its assets in compliance with the terms of
this Indenture.
Section 905. 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 material
taxes, assessments and governmental charges levied or imposed upon the Company
or any Subsidiary shown to be due on any return of the Company or any Subsidiary
or otherwise assessed or upon the income, profits or property of the Company or
any Subsidiary and (b) all material lawful claims for labor, materials and
supplies, which, if unpaid, would by law become a Lien upon the property of the
Company or any Subsidiary; 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
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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 906. Maintenance of Properties.
The Company will cause all material properties owned by the Company or
any Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be consistent with sound business practice and reasonably
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 906 shall prevent the Company from discontinuing the
maintenance of any such properties if such discontinuance is, in the judgment of
the Company, desirable in the conduct of business of the Company and its
Subsidiary and not reasonably expected to have a material adverse effect on the
ability of the Company to perform its obligations hereunder.
Section 907. Insurance.
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature reasonably self-insured or 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 in the same general
geographic areas in which the Company and its Subsidiaries operate, except where
the failure to do so would not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), earnings, business affairs or
prospects of the Company and its Subsidiaries, taken as a whole.
Section 908. Purchase of Securities upon a Change of Control.
(a) If a Change of Control shall occur at any time, then each Holder
shall have the right, subject to the terms and provisions hereof, to require
that the Company purchase such Holder's Securities, pursuant to an offer
described in subsection (b) of this Section (a "Change of Control Offer"), in
whole or in part in integral multiples of $1,000, at a purchase price (the
"Change of Control Purchase Price") in cash in an amount equal to 101% of the
principal amount of such Securities, plus accrued and unpaid interest to the
date of purchase (the "Change of Control Purchase Date"), in accordance with the
procedures set forth in paragraphs (b), (c), (d) and (e) of this Section.
(b) Within 30 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, to the Trustee and to each Holder, at his address appearing in
the Security Register stating or including:
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(i) that a Change of Control has occurred, the date of such
event, and that such Holder has the right to require the Company to
repurchase such Holder's Securities at the Change of Control Purchase
Price;
(ii) 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);
(iii) that the Change of Control Offer is being made pursuant
to Section 908(a) and that all Securities properly tendered pursuant to
the Change of Control Offer will be accepted for payment at the Change
of Control Offer Purchase Price;
(iv) 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 may be necessary for
the Company to comply with the requirements under the Exchange Act;
(v) (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, comparable information
concerning the Company, (ii) a description of material developments in
the Company's business subsequent to the date of the latest of such
reports and (iii) such other information, if any, concerning the
business of the Company and its Subsidiaries which the Company in good
faith believes will enable such Holders to make an informed investment
decision regarding the Change of Control Offer;
(vi) the Change of Control Purchase Price;
(vii) the names and addresses of the Paying Agent and the
offices or agencies referred to in Section 902;
(viii) that Securities must be surrendered at least three
Business Days 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 902 to collect payment;
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(ix) that the Change of Control Purchase Price for any
Security which has been properly tendered and not withdrawn will be
paid promptly following the Change of Control Purchase Date;
(x) the procedures for withdrawing a tender of Securities and
Change of Control Purchase Notice;
(xi) that any Security not tendered will continue to accrue
interest; and
(xii) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Security accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
on and after the Change of Control Purchase Date.
(c) Upon receipt by the Company of the proper tender of Securities,
each Holder of a Security in respect of which such proper tender was made shall
(unless the tender of such Security is properly withdrawn) thereafter be
entitled to receive solely the Change of Control Purchase Price with respect to
such Security. Upon surrender of any such Security for purchase in accordance
with the foregoing provisions, such Security shall be paid by the Company at the
Change of Control Purchase Price; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Change of Control Purchase
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 206. If any Security
tendered for purchase in accordance with the provisions of this Section shall
not be so paid upon surrender thereof by deposit of funds with the Paying Agent
in accordance with paragraph (d) below, the principal thereof (and premium, if
any, thereon) shall, until paid, bear interest from the Change of Control
Purchase Date at the rate borne by such Security. Holders electing to have
Securities purchased will be required to surrender such Securities to the Paying
Agent at the address specified in the notice at least three Business Days prior
to the Change of Control Purchase Date. Any Security that is to be purchased
only in part shall be surrendered to a Paying Agent in accordance with the
provisions of this Section at the office of such Paying Agent (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing),
and the Company shall execute and the Trustee shall authenticate and deliver to
the Holder of such Security, without service charge, one or more new Securities
of any authorized denomination as requested by such Holder in an aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Security so surrendered that is not purchased.
(d) The Company shall (i) not later than the Change of Control Purchase
Date, accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) not later than 11:00 a.m. (New York time) on the
Change of Control
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Purchase Date, deposit with the Paying Agent an amount of cash sufficient to pay
the aggregate Change of Control Purchase Price of all the Securities or portions
thereof which are to be purchased as of the Change of Control Purchase Date and
(iii) not later than 11:00 a.m. (New York time) on the Change of Control
Purchase Date, deliver to the Paying Agent an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Change of Control Purchase Price of the
Securities purchased from each such Holder. Any Securities not so accepted shall
be promptly mailed or delivered by the Paying Agent at the Company's expense to
the Holder thereof. The Company will publicly announce the results of the Change
of Control Offer on the Change of Control Purchase Date. For purposes of this
Section 908, the Company shall choose a Paying Agent which shall not be the
Company.
(e) A tender made in response to a Change of Control Purchase Notice
may be withdrawn before or after delivery by the Holder to the Paying Agent at
the office of the Paying Agent of the Security to which such Change of Control
Purchase Notice relates, by means of a written notice of withdrawal delivered by
the Holder to the Paying Agent at the office of the Paying Agent or to the
office or agency referred to in Section 902 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:
(i) the name of the Holder;
(ii) the certificate number of the Security in respect of
which such notice of withdrawal is being submitted;
(iii) the principal amount of the Security (which shall be
$1,000 or an integral multiple thereof) delivered for purchase by the
Holder as to which such notice of withdrawal is being submitted;
(iv) a statement that such Holder is withdrawing such Holder's
election to have such principal amount of such Security purchased; and
(v) the principal amount, if any, of such Security (which
shall be $1,000 or an integral multiple thereof) that remains subject
to the original Change of Control Purchase Notice and that has been or
will be delivered for purchase by the Company.
(f) As provided in the Securities, the Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed, together with
interest or dividends, if any, thereon, held by them for the payment of the
Change of Control Purchase Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by the Company pursuant to clause
(ii) of paragraph (d) above exceeds the aggregate Change of Control Purchase
Price of the Securities or portions thereof to be purchased, then the Trustee
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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 or dividends, 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) Notwithstanding anything to the contrary contained herein, the
Company shall not be obligated to repurchase the Securities pursuant to a Change
of Control Offer, make any payments in respect of a Change of Control Offer or
otherwise comply with this Section 908, (i) if the Company has elected to redeem
all of the Securities in accordance with Article Ten and (ii) until all of the
Company's obligations with respect to change of control offers made to the
holders of the Senior Notes have been satisfied in full.
Section 909. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, on or before a date not
more than 45 days after the end of each fiscal quarter and not more than 90 days
after the end of each fiscal year of the Company ending after the date hereof, a
written statement signed by two executive officers of the Company, one of whom
shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating whether or not, after a
review of the activities of the Company during such year or such quarter and of
the Company's performance under this Indenture, to the best knowledge, based on
such review, of the signers thereof, the Company has fulfilled all its
obligations and is in compliance with all conditions and covenants under this
Indenture throughout such year or quarter, as the case may be, and, if there has
been a Default, specifying each Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Subsidiary gives any
notice or takes any other action with respect to a claimed Default, the Company
shall deliver to the Trustee by registered or certified mail or by telegram,
telex or facsimile transmission followed by hard copy an Officers' Certificate
specifying such Default, Event of Default, notice or other action, the status
thereof and what action the Company is taking or proposes to take with respect
thereto, within five Business Days of its occurrence.
Section 910. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 905 through 907 if, before or after
the time for such compliance, the Holders of not less than a majority in
aggregate principal amount of the
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Securities at the time Outstanding 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 full force
and effect.
ARTICLE TEN
REDEMPTION OF SECURITIES
Section 1001. Right of Redemption.
(a) The Securities shall not be redeemable at the Company's option
prior to January 29, 2002. Thereafter, the Securities may be redeemed, at the
election of the Company, in whole or in part, subject to the conditions and at
the Redemption Prices specified in the form of Security, together with accrued
and unpaid interest, if any, to the Redemption Date (subject to the right of
Holders of record on relevant Regular Record Dates and Special Record Dates to
receive interest due on relevant Interest Payment Dates).
(b) Notwithstanding the foregoing, at any time, the Company, at its
option, may redeem the Securities, in whole or in part, at any time within 90
days after a Change of Control, upon not less than 30 nor more than 60 days'
notice, in amounts of $1,000 or integral multiples thereof, at a redemption
price equal to the sum of (i) 101% of the principal amount thereof plus (ii)
accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of record on relevant Regular Record Dates and Special Record Dates to
receive interest due on relevant Interest Payment Dates).
(c) Notwithstanding anything in this Indenture to the contrary, (i) the
Company may not redeem that portion, if any, of a Security as to which it has
received a proper conversion notice under Section 1302 prior to the Redemption
Date fixed by the Company and (ii) each Holder shall have a period of not less
than 30 days after notice to such Holder of redemption under Section 1005 within
which to exercise its right to convert pursuant to Article Thirteen.
Section 1002. Applicability of Article.
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
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Section 1003. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1001 shall be evidenced by a Company Order and an Officers' Certificate.
In case of any redemption at the election of the Company, the Company shall, not
less than 30 nor more than 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice period shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date and of the principal
amount of Securities to be redeemed.
Section 1004. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee (or such shorter period as the
Trustee may agree upon), from the Outstanding Securities not previously called
for redemption, by lot or such other method as the Trustee shall deem fair and
reasonable, and the amounts to be redeemed may be equal to $1,000 or any
integral multiple thereof.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
Section 1005. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date upon
surrender of such
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Security, a new Security or Securities in the aggregate principal amount equal
to the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof to be redeemed, and that
(unless the Company shall default in payment of the Redemption Price) interest
thereon shall cease to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such Securities.
Such notice shall also state the current Conversion Price and the date
on which the right to convert such Securities or portions thereof into Common
Stock will expire.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company. If the Company
elects to give notice of redemption, it shall provide the Trustee with a
certificate stating that such notice has been given in compliance with the
requirements of this Section 1005.
Such notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
Section 1006. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent an amount of money in same day funds sufficient
to pay the Redemption Price of, and, except if the Redemption Date shall be an
Interest Payment Date, accrued interest on, all the Securities or portions
thereof which are to be redeemed on that date unless theretofore converted into
Common Stock pursuant to the provisions hereof. If any Security called for
redemption is converted, any money deposited with the Trustee or with a Paying
Agent for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 206) be paid to the Company on Company
Request. The Trustee or the Paying Agent shall hold in trust for, and return to,
the Company promptly after the Business Day following the Redemption Date any
interest or dividends, if any, earned on amounts
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deposited with the Trustee or the Paying Agent remaining after the payment of
the aggregate Redemption Price for all securities to be redeemed.
Section 1007. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall not have deposited funds in accordance with Section 1006 in
respect of the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price together with accrued interest to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Regular Record Dates according to the terms and the provisions of
Section 206.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, by deposit or segregation of funds in
accordance with Section 1006, the principal and premium, if any, shall, until
paid, bear interest from the Redemption Date at the rate borne by such Security.
Section 1008. Securities Redeemed or Purchased in Part.
Any Security which is to be redeemed or purchased only in part shall be
surrendered to the Paying Agent at the office or agency maintained for such
purpose pursuant to Section 902 (with, if the Company, the Security Registrar or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company, the Security Registrar or the Trustee, as
the case may be, duly executed by the Holder thereof or such Holder's attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in exchange
for, the unredeemed portion of the principal of the Security so surrendered that
is not redeemed or purchased.
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 1101. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of the Securities
herein expressly provided for) and the
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Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(a) either
(1) all the Securities theretofore authenticated and delivered
(other than (i) lost, stolen or destroyed Securities which have been
replaced or paid as provided in Section 205 and (ii) Securities for
whose payment United States dollars have theretofore been deposited in
trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 903) have been delivered to the
Trustee for cancellation; or
(2) all Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) 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 has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust an amount sufficient to pay
and discharge the entire indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, including principal of,
premium, if any, and accrued interest on such Securities at such
Maturity, Stated Maturity or Redemption Date;
(b) the Company has paid all other sums payable thereunder by the
Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each to the effect that all conditions precedent
herein provided for relating to the satisfaction and discharge of this Indenture
have been complied with and that such satisfaction and discharge will not result
in a breach or violation of, or constitute a default under, this Indenture or a
breach or violation of any agreement to which the Company is a party or by which
either is bound.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 507 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of subsection (a) of this Section, the
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obligations of the Trustee under Section 1102 and the last paragraph of Section
903 shall survive.
Section 1102. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 903, all
United States dollars deposited with the Trustee pursuant to Section 1101 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent as the Trustee may determine, to the Persons entitled thereto, of
the principal of, premium, if any, and interest on the Securities for whose
payment such United States dollars have been deposited with the Trustee.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
Section 1201. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder, by such Holder's
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the Indebtedness represented
by the Securities and the payment of the principal of, premium, if any, and
interest on each and all of the Securities are hereby expressly made subordinate
and subject in right of payment as provided in this Article to the prior payment
in full, in cash or Cash Equivalents or in any manner acceptable to the
requisite holders of Designated Senior Indebtedness, of all Senior Indebtedness.
For purposes of this Indenture, the requisite holders of Designated Senior
Indebtedness shall be determined by the instruments governing Designated Senior
Indebtedness.
This Article Twelve shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness; and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 1202. Payment Over of Proceeds Upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of the Company, then and in any
such event:
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(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents or in any other manner acceptable to
the requisite holders of Designated Senior Indebtedness, of all amounts due on
or in respect of all Senior Indebtedness, before the Holders of the Securities
are entitled to receive any payment or distribution of any kind or character
(excluding Permitted Junior Securities) on account of the principal of, premium,
if any, or interest on the Securities or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of the Securities (including
any payment or other distribution which may be received from the holders of
Subordinated Indebtedness as a result of any payment on such Subordinated
Indebtedness); and
(2) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (excluding Permitted Junior
Securities), by set-off or otherwise, to which the Holders or the Trustee would
be entitled but for the provisions of this Article shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash or Cash Equivalents or in any
other manner acceptable to the requisite holders of Designated Senior
Indebtedness, of all Senior Indebtedness remaining unpaid, after giving effect
to any concurrent payment or distribution to the holders of such Senior
Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, in respect of principal, premium, if
any, and interest on the Securities or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of the Securities before all
Senior Indebtedness is paid in full, then and in such event such payment or
distribution (excluding Permitted Junior Securities) (including any payment or
other distribution which may be received from the holders of Subordinated
Indebtedness as a result of any payment on such Subordinated Indebtedness) shall
be paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Company for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full in cash or Cash Equivalents or in any other manner
acceptable to the requisite holders of Designated Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness and until so paid shall be held in trust for the benefit of
the holders of Senior Indebtedness.
The Consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of the
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Company's properties or assets to another Person upon the terms and conditions
set forth in Article Seven shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or the surviving entity of
such merger or the Person which acquires by sale, assignment, conveyance,
transfer, lease or other disposal of all or substantially all of the Company's
properties or assets, as the case may be, shall, as a part of such
consolidation, merger, sale, assignment, conveyance, transfer, lease or other
disposal, comply with the conditions set forth in Article Seven.
Section 1203. Suspension of Payment When Senior Indebtedness in
Default.
(a) Unless Section 1202 shall be applicable, upon (1) the occurrence of
a Payment Default beyond the applicable grace period, and (2) receipt by the
Trustee (with a copy to the Company) from a representative of holders of any
Designated Senior Indebtedness (a "Senior Representative") of written notice of
a Payment Default, then no payment (other than any payments previously made
pursuant to the provisions described in Article Four) or distribution of any
assets of the Company of any kind or character (excluding Permitted Junior
Securities) shall be made by the Company on account of principal of, premium, if
any, or interest on, the Securities or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of the Securities unless and
until such Payment Default shall have been cured or waived or shall have ceased
to exist or the Designated Senior Indebtedness shall have been discharged or
paid in full in cash or Cash Equivalents, or in any other manner acceptable to
the requisite holders of such Designated Senior Indebtedness, after which the
Company shall resume making any and all required payments in respect of the
Securities, including any missed payments.
(b) Unless Section 1202 shall be applicable, upon (1) the occurrence of
a Non-payment Default and (2) receipt by the Trustee (with a copy to the
Company) from a Senior Representative of written notice of such occurrence, no
payment (other than any payments previously made pursuant to the provisions
described in Article Four) or distribution of any assets of the Company of any
kind or character (excluding Permitted Junior Securities) shall be made by the
Company on account of any principal of, premium, if any, or interest on, the
Securities or on account of the purchase, redemption, defeasance or other
acquisition of or in respect of Securities for a period ("Payment Blockage
Period") commencing on the date of receipt by the Trustee of such notice unless
and until the earliest of (subject to any blockage of payments that may then or
thereafter be in effect under subsection (a) of this Section 1203) (x) 179 days
having elapsed since receipt of such written notice by the Trustee (provided any
Designated Senior Indebtedness as to which notice was given shall not
theretofore have been accelerated), (y) the date such Non-payment Default and
all other Non-payment Defaults as to which notice is also given after such
Payment Blockage Period is initiated shall have been cured or waived or shall
have ceased to exist or the Senior Indebtedness related thereto shall have been
discharged or paid in full in cash or Cash Equivalents or in any other manner
acceptable to the requisite holders of such
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Designated Senior Indebtedness or (z) the date on which such Payment Blockage
Period (and all Non-Payment Defaults as to which notice is given after such
Payment Blockage Period is initiated) shall have been terminated by written
notice to the Company or the Trustee from the Senior Representative or the
holders of at least a majority of the Designated Senior Indebtedness that
initiated such Payment Blockage Period, after which, in each such case, the
Company shall resume making any and all required payments in respect of the
Securities, including any missed payments. Notwithstanding any other provision
of this paragraph (b), in no event shall a Payment Blockage Period extend beyond
179 days from the date of the receipt by the Trustee of the notice referred to
in clause (2) of this paragraph (b) (such 179-day period referred to as the
"Initial Blockage Period"). Any number of notices of Non-Payment Defaults may be
given during the Initial Blockage Period; provided that during any 365-day
consecutive period only one Payment Blockage Period during which payment of
principal of, premium, if any, or interest on, the Securities may not be made
may commence and the duration of such Payment Blockage Period may not exceed 179
days. No Nonpayment Default with respect to Designated Senior Indebtedness which
existed or was continuing on the date of the commencement of any Payment
Blockage Period will be, or can be, made the basis for the commencement of a
second Payment Blockage Period, whether or not within a period of 365
consecutive days, unless such Non-payment Default shall have been cured or
waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to a Senior Representative of the holders
of the Designated Senior Indebtedness or as a court of competent jurisdiction
shall direct and until so paid shall be held in trust for the benefit of the
holders of Senior Indebtedness.
Section 1204. Payment Permitted if No Default.
Nothing contained in this Article, elsewhere in this Indenture or in
any of the Securities shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 1202 or under the conditions
described in Section 1203, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
Section 1205. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness in cash or
Cash Equivalents or in any other manner acceptable to the requisite holders of
Designated Senior Indebtedness, the Holders of the Securities shall be
subrogated to the rights of the holders of all Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of, premium, if any, and interest on the
Securities shall be paid in full. For purposes of such subrogation, no payments
or
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distributions to the holders of Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
Notwithstanding anything in this Indenture to the contrary, neither the
issuance and delivery of junior securities upon conversion of Securities in
accordance with Article Thirteen nor the payment of cash in lieu of fractional
shares of Common Stock in accordance with Article Thirteen shall be deemed to
constitute a payment or distribution on account of the principal or interest, if
any, in respect of the Securities. For the purposes of this paragraph, the term
"junior securities" means (a) shares of any stock of any class of the Company,
(b) securities of the Company which are subordinated in right of payment to all
Senior Indebtedness of the Company which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Securities are so subordinated as provided in this
Article Twelve, and (c) any securities into which the Securities become
convertible or exchangeable pursuant to Section 1314 which are securities of a
Person required to enter into a supplemental indenture pursuant to such section
(or Section 801) and are either (x) shares of any stock of any class of such
Person, or (y) securities of such Person which are subordinated in right of
payment to all Senior Indebtedness of such Person which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article Twelve.
Section 1206. Provisions Solely to Define Relative Rights.
The provisions of this Article are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 1202, to receive,
pursuant to and in accordance with such Section, cash, property and securities
otherwise payable or deliverable to the Trustee or such
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Holder, or (2) under the conditions specified in Section 1203, to prevent any
payment prohibited by such Section or enforce their rights pursuant to Section
1203(c).
Section 1207. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the Indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved. If the Trustee
does not file a proper claim at least 30 days before the expiration of the time
to file such claim, then the holders of Senior Indebtedness, and their agents,
trustees or other representatives are authorized to do so for and on behalf of
the Holders.
Section 1208. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act by any such holder, or by any non-compliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of Subsection (a) of this Section,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (1) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; provided, however, that in no
event shall any such actions limit the right of the Holders of the Securities to
take any action to accelerate the maturity of the Securities in accordance with
the provisions set forth in Article Four in this Indenture or to pursue any
rights or remedies hereunder or under applicable laws if the taking of such
action does not otherwise violate the terms of this Article.
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Section 1209. Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from a Senior Representative or
any trustee, fiduciary or agent therefor; and, prior to the receipt of any such
written notice, the Trustee shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have received
the notice provided for in this Section at least two Business Days prior to the
date upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of, premium, if
any, or interest on any Security), then, anything herein contained to the
contrary notwithstanding but without limiting the rights and remedies of the
holders of Senior Indebtedness or any trustee, fiduciary or agent thereof, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within two
Business Days prior to such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the elimination of the act or
condition preventing any such payment unless and until the Trustee shall have
received an officers' certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee by a Person representing himself to be a Senior
Representative or a holder of Senior Indebtedness (or a trustee, fiduciary or
agent therefor) to establish that such notice has been given by a Senior
Representative or a holder of Senior Indebtedness (or a trustee, fiduciary or
agent therefor); provided, however, that failure to give such notice to the
Company shall not affect in any way the ability of the Trustee to rely on such
notice. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
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Section 1210. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article; provided that the foregoing shall apply only if such court has
been fully apprised of the provisions of this Article.
Section 1211. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to the provisions in this Indenture
regarding compensation and indemnification of the Trustee.
Section 1212. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1211 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 1213. No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Securities to take any action to accelerate the maturity of
the Securities pursuant to the provisions described under "Events of Default"
and as set forth in this Indenture or to pursue any rights or remedies hereunder
or under applicable law, subject to the rights, if any, under this Article of
the holders, from time to time, of Senior Indebtedness to receive the cash,
property or securities receivable upon the exercise of such rights or remedies.
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Section 1214. Trustee's Relation to Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Article against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall mistakenly in the
absence of gross negligence or willful misconduct pay over or deliver to
Holders, the Company or any other Person moneys or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
Section 1301. Conversion Privilege and Conversion Price.
Subject to the terms and provisions of this Article Thirteen, at any
time following January 30, 2000, a Holder of a Security shall have the right, at
its option, to convert such Security (or any portion of the principal amount
thereof which is $1,000 or an integral multiple of $1,000) at the Conversion
Price then in effect. Such conversion right shall expire at the close of
business on the Business Day immediately preceding January 31, 2004, subject, in
the case of conversion of any Global Security, to any Applicable Procedures. In
case a Security or portion thereof is called for redemption at the election of
the Company or for repurchase pursuant to a Change of Control Offer made by the
Company, such conversion right in respect of the Security or portion thereof
shall expire at the close of business, New York time, on the Business Day
immediately preceding the corresponding Redemption Date or Change of Control
Purchase Date, as the case may be (unless the Company defaults in making the
payment due upon redemption or the consummation of the Change of Control Offer,
as the case may be, in which case the conversion right shall terminate on the
date such default is cured), in each case subject as aforesaid to any Applicable
Procedures with respect to any Global Security. The number of shares of Common
Stock issuable upon conversion of a Security (or portion thereof) is determined
by dividing the principal amount of the Security (or portion thereof) being so
converted by the conversion price in effect on the Conversion Date (the
"Conversion Price").
The initial Conversion Price is stated in Section 7 of the Securities
and is subject to adjustment as provided in this Article Thirteen.
Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion thereof. (For convenience, the
conversion of all or a
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portion, as the case may be, of the principal amount of a Security, is
hereinafter sometimes referred to as the conversion of such Security.)
Section 1302. Exercise of Conversion Privilege. In order to exercise
the conversion privilege, the Holder of any Security to be converted shall: (a)
complete, sign and deliver to the Company at any office or agency maintained by
the Company pursuant to Section 902 an irrevocable written notice (in the form
set forth pursuant to Section 212 hereof) that the Holder elects to convert such
Security, or a portion thereof, and stating a date on which conversion is sought
to be made (the "Specified Date"), which must be on a Business Day and be at
least 10 days after the date of the Company's receipt of such conversion notice,
except in the event that there is an outstanding tender offer for shares of the
Company's Common Stock pursuant to Section 14 of the Securities Exchange Act in
which case the Specified Date must be on a Business Day and be at least five
days after the date of the Company's receipt of such conversion notice; (b)
surrender, not later than 11:00 a.m. (New York time) on the Specified Date or on
such other date and at such other time as such Holder and the Company mutually
agree in writing, such Security to the Company at such office or agency; (c) if
required, furnish appropriate endorsements and transfer documents; (d) if
required, pay all transfer or similar taxes; and (e) if required, pay funds
equal to interest payable on the next Interest Payment Date. The Specified Date
or such other date, as the case may be, on which the Holder satisfies all of the
foregoing requirements is the conversion date (the "Conversion Date").
Except as described in the last paragraph of Section 206, no Holder of
Securities will be entitled upon conversion thereof to any payment or adjustment
for accrued and unpaid interest thereon or for dividends on the shares of Common
Stock issued in connection therewith. Securities surrendered for conversion
during the period from the close of business on any Regular Record Date to the
opening of business on the next succeeding Interest Payment Date (except any
Security called for redemption on a Redemption Date or for repurchase on a
Change of Control Purchase Date within such period between and including such
Regular Record Date and such Interest Payment Date and, as a result, the right
to convert such Security would terminate during such period) must be accompanied
by payment to the Company in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount converted.
Securities shall be deemed to have been converted immediately prior to
the close of business on the Conversion Date for such Securities in accordance
with the foregoing provisions, and at such time the rights of the Holders of
such Securities as Holders shall cease with respect to the such Securities (or
the portion thereof being converted, as the case may be), and the Person or
Persons entitled to receive the Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock at
such time. As promptly as practicable on or after the Conversion Date, the
Company shall issue and shall deliver at such office or agency a certificate or
certificates for
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the number of full shares of Common Stock issuable upon conversion, together
with payment in lieu of any fraction of a share as provided in Section 1303.
All shares of Common Stock delivered upon such conversion of Securities
shall, if required, bear the Private Placement Legend and shall be subject to
the restrictions on transfer provided in such legend.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof a new Security or Securities of authorized
denominations in aggregate principal amount equal to the unconverted portion of
the principal amount of such Security. Any requirements for notice, surrender or
delivery of Securities pursuant to this Article Thirteen shall, with respect to
any Global Security, be subject to any Applicable Procedures.
Section 1303. Fractions of Shares. No fractional shares of Common Stock
shall be issued upon conversion of Securities. If more than one Security 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 the Securities (or specified portions
thereof) so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment (calculated
to the nearest cent) in respect of such fraction in an amount equal to the same
fraction of the Daily Market Price per share of the Common Stock at the close of
business on the day of conversion (or, if such day is not a trading day, on the
trading day immediately preceding such day) or, alternatively, the Company shall
round up to the next higher whole share.
Section 1304. Adjustment of Conversion Price. The Conversion Price
shall be subject to adjustment from time to time as follows:
(a) In case the Company shall (1) pay a dividend in shares of Common
Stock to holders of Common Stock, (2) make a distribution in shares of Common
Stock to holders of Common Stock, (3) subdivide its outstanding shares of Common
Stock into a greater number of shares of Common Stock or (4) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Conversion Price in effect immediately prior to such action shall be
adjusted so that the holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
which he would have owned immediately following such action had such Securities
been converted immediately prior thereto. Any adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision or combination.
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(b) In case the Company shall issue rights, warrants or options to
substantially all holders of Common Stock entitling them (for a period
commencing no earlier than the record date for the determination of holders of
Common Stock entitled to receive such rights, warrants or options and expiring
not more than 45 days after such record date) to subscribe for or purchase
shares of Common Stock (or securities convertible into Common Stock) at a price
per share less than the current market price (as determined pursuant to
subsection (f) below) of the Common Stock on such record date, the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to such record date
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding on such record date, plus the number of shares of Common Stock
which the aggregate offering price of the offered shares of Common Stock (or the
aggregate conversion price of the convertible securities so offered) would
purchase at such current market price, and of which the denominator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock offered (or into which the convertible
securities so offered are convertible). Such adjustments shall become effective
immediately after such record date.
(c) In case the Company shall distribute to all holders of Common Stock
shares of any class of stock other than Common Stock, evidences of indebtedness
or other assets (other than cash dividends out of current or retained earnings),
or shall distribute to substantially all holders of Common Stock rights,
warrants or options to subscribe for securities (other than those referred to in
subsection (b) above), then in each such case the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of such distribution by
a fraction of which the numerator shall be the current market price (determined
as provided in subsection (f) below) of the Common Stock on the record date
mentioned below less the then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive evidence of such fair market
value and described in a Board Resolution) of the portion of the assets so
distributed or of such subscription rights, warrants or options applicable to
one share of Common Stock, and of which the denominator shall be such current
market price of the Common Stock. Such adjustment shall become effective
immediately after the record date for the determination of the holders of Common
Stock entitled to receive such distribution. Notwithstanding the foregoing, in
the event that the Company shall distribute rights, warrants or options (other
than those referred to in subsection (b) above) ("Rights") pro rata to holders
of Common Stock, the Company may, in lieu of making any adjustment pursuant to
this Section 1304, make proper provision so that each holder of a Security who
converts such Security (or any portion thereof) after the record date for such
distribution and prior to the expiration or redemption of the Rights shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion (the "Conversion Shares"), a number of
Rights to be determined as follows: (i) if such conversion occurs on or prior to
the date for the distribution to the holders of Rights of separate certificates
evidencing such Rights (the "Distribution Date"), the same number of Rights to
which a holder of a number of shares of Common Stock equal
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to the number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
principal amount of the Security so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of its Common Stock cash (including any distributions
of cash out of current or retained earnings of the Company but excluding any
cash that is distributed as part of a distribution requiring a Conversion Price
adjustment pursuant to paragraph (c) of this Section) in an aggregate amount
that, together with the sum of (x) the aggregate amount of any other
distributions to all holders of its Common Stock made in cash plus (y) all
Excess Payments, in each case made within the 12 months preceding the date fixed
for determining the stockholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no Conversion Price
adjustment pursuant to paragraphs (c) or (e) of this Section or this paragraph
(d) has been made, exceeds 10% of the product of the current market price per
share (determined as provided in paragraph (f) of this Section) of the Common
Stock on the Distribution Record Date times the number of shares of Common Stock
outstanding on the Distribution Record Date (excluding shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying such Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this paragraph (d) by a fraction of which the numerator shall be
the current market price per share (determined as provided in paragraph (f) of
this Section) of the Common Stock on the Distribution Record Date less the
amount of such cash and other consideration (including any Excess Payments) so
distributed applicable to one share (based on the pro rata portion of the
aggregate amount of such cash and other consideration (including any Excess
Payments), divided by the shares of Common Stock outstanding on the Distribution
Record Date) of Common Stock and the denominator shall be such current market
price per share (determined as provided in paragraph (f) of this Section) of the
Common Stock on the Distribution Record Date, such reduction to become effective
immediately prior to the opening of business on the day following the
Distribution Record Date.
(e) In case a tender offer or other negotiated transaction made by the
Company or any Subsidiary for all or any portion of the Common Stock shall be
consummated, if an Excess Payment is made in respect of such tender offer or
other negotiated transaction and the amount of such Excess Payment, together
with the sum of (x) the aggregate amount of all Excess Payments plus (y) the
aggregate amount of all distributions to all holders of the Common Stock made in
cash (specifically including distributions of cash out of retained earnings), in
each case made within the 12 months preceding the date of payment of such
current negotiated transaction consideration or expiration of such current
tender offer, as the case may be (the "Purchase Date"), and as
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to which no adjustment pursuant to paragraph (c) or paragraph (d) of this
Section or this paragraph (e) has been made, exceeds 10% of the product of the
current market price per share (determined as provided in paragraph (f) of this
Section) of the Common Stock on the Purchase Date times the number of shares of
Common Stock outstanding (including any tendered shares but excluding any shares
held in the treasury of the Company) on the Purchase Date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying such Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this paragraph
(e) by a fraction of which the numerator shall be the current market price per
share (determined as provided in paragraph (f) of this Section) of the Common
Stock on the Purchase Date less the amount of such Excess Payments and such cash
distributions, if any, applicable to one share (based on the pro rata portion of
the aggregate amount of such Excess Payments and such cash distributions,
divided by the shares of Common Stock outstanding on the Purchase Date) of
Common Stock and the denominator shall be such current market price per share
(determined as provided in paragraph (f) of this Section) of the Common Stock on
the Purchase Date, such reduction to become effective immediately prior to the
opening of business on the day following the Purchase Date.
(f) The current market price per share of Common Stock on any date
shall be deemed to be the average of the Daily Market Prices for the shorter of
(i) 30 consecutive Business Days ending on the last full trading day on the
exchange or market referred to in determining such Daily Market Prices prior to
the time of determination or (ii) the period commencing on the date next
succeeding the first public announcement of the issuance of such rights,
warrants or options or such other distribution or such negotiated transaction
through such last full trading day on the exchange or market referred to in
determining such Daily Market Prices prior to the time of determination.
(g) In any case in which this Section 1304 shall require that an
adjustment be made immediately following a record date, the Company may elect to
defer (but only until five Business Days following the filing by the Company
with the Trustee of the certificate described in Section 1308 below) issuing to
the holder of any Security converted after such record date the shares of Common
Stock and other Capital Stock of the Company issuable upon such conversion over
and above the shares of Common Stock and other Capital Stock of the Company
issuable upon such conversion only on the basis of the Conversion Price prior to
adjustment; and, in lieu of the shares the issuance of which is so deferred, the
Company shall issue or cause its transfer agents to issue due bills or other
appropriate evidence of the right to receive such shares.
Section 1305. No Adjustment. No adjustment in the Conversion Price
shall be required until cumulative adjustments amount to 1% or more of the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 1305 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article Thirteen shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. No adjustment need be made
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for rights to purchase Common Stock pursuant to a Company plan for reinvestment
of dividends or interest. No adjustment need be made for a change in the par
value or no par value of the Common Stock.
Section 1306. Other Adjustments. (a) If, as a result of an adjustment
made pursuant to Section 1304 above, the Holder of any Security thereafter
surrendered for conversion shall become entitled to receive any shares of
Capital Stock of the Company other than shares of its Common Stock, thereafter
the Conversion Price of such other shares so receivable upon conversion of any
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
Common Stock contained in this Article Thirteen.
(b) If, as a result of an adjustment pursuant to this Article Thirteen,
the Holder of a Security thereafter surrendered for conversion would be entitled
to receive shares of two or more classes of the Capital Stock of the Company,
the Board of Directors (whose determination shall be conclusive if made in good
faith and shall be described in a Board Resolution) shall determine the number
of shares of each such class to be issued upon such conversion.
(c) In the event that shares of Common Stock are not delivered after
the expiration of any of the rights, warrants or options referred to in Section
1304(b) and Section 1304(c) hereof, the Conversion Price shall be readjusted to
the Conversion Price which would otherwise be in effect had the adjustment made
upon the issuance of such rights or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered.
Section 1307. Adjustments for Tax Purposes. The Company may make such
reductions in the Conversion Price, in addition to those required by Section
1304 above, as it determines to be advisable in order that any stock dividend,
subdivision of shares, distribution or rights to purchase stock or securities or
distribution of securities convertible into or exchangeable for stock made by
the Company to its stockholders will not be taxable to the recipients thereof.
Section 1308. Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted, the Company shall promptly mail to the Holders a
notice of the adjustment. The Company shall file with the Trustee and the
Conversion Agent such notice. The notice shall, absent manifest error, be
conclusive evidence that the adjustment is correct. Neither the Trustee nor any
Conversion Agent shall be under any duty or responsibility with respect to any
such notice except to exhibit the same to any Holder desiring inspection
thereof.
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Section 1309. Notice of Certain Corporate Action. If:
(a) the Company takes any action that would require an adjustment in
the Conversion Price pursuant to Section 1304;
(b) the Company takes any action that would require a supplemental
indenture pursuant to Section 1314; or
(c) there is a dissolution, liquidation or winding down of the Company;
then the Company shall mail or shall deliver to the Trustee and direct the
Trustee to mail to Holders and file with the Trustee and the Conversion Agent a
notice stating the proposed record date for a dividend or distribution or the
proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
The Company shall file and mail the notice at least 15 days before such date.
Failure to file or mail the notice or any defect in it shall not affect the
validity of any transaction referred to in clause (a), (b) or (c) of this
Section.
Section 1310. Company to Reserve Common Stock. The Company shall at all
times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock, solely for the purpose of effecting the
conversion of Securities, the whole number of shares of Common Stock then
issuable upon the conversion in full of all outstanding Securities.
Section 1311. Taxes on Conversions. The Company will pay any and all
taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the Holder of the Security or Securities to be converted, and
no such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.
Section 1312. Covenant as to Common Stock. The Company covenants that
all shares of Common Stock which may be issued upon conversion of Securities
will upon issue be newly issued (and not treasury shares) and be duly
authorized, validly issued, fully paid and nonassessable and, except as provided
in Section 1308, the Company will pay all taxes, liens and charges with respect
to the issue thereof.
Section 1313. Cancellation of Converted Securities. All Securities
delivered for conversion shall be delivered to the Trustee to be canceled by or
at the direction of the Trustee, which shall dispose of the same as provided in
Section 208.
88
<PAGE>
Section 1314. Provisions in Case of Reclassification, Consolidation,
Merger or Sale of Assets. In the event that the Company shall be a party to any
transaction including, without limitation, any (i) recapitalization or
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination of the Common Stock), (ii) any consolidation of the
Company with, or merger of the Company into, any other Person, any merger of
another Person into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), (iii) any sale or transfer of all or substantially
all of the assets of the Company or (iv) any other transaction pursuant to which
the Common Stock is converted into the right to receive other securities, cash
or other property, then lawful provision shall be made as part of the terms of
such transaction whereby the Holder of each Security then outstanding shall have
the right thereafter to convert such Security only into (subject to funds being
legally available for such purpose under applicable law at the time of such
conversion) the kind and amount of securities, cash and other properly
receivable upon such transaction by a holder of the number of shares of Common
Stock into which such Security might have been converted immediately prior to
such transaction. The Company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquired the
Company's shares, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture establishing such rights. Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section 1314 shall similarly apply to successive transactions
of the foregoing type.
Section 1315. Successive Adjustments. After an adjustment to the
Conversion Rate under this Article Thirteen, any subsequent event requiring an
adjustment under this Article Thirteen shall cause an adjustment to the
Conversion Price as so adjusted.
[Rest of page intentionally left blank.]
89
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
PLAYTEX PRODUCTS, INC.
By:__________________________
Name:
Title:
MARINE MIDLAND BANK
as Trustee
By:__________________________
Name:
Title:
90
<PAGE>
EXHIBIT A
(Form of Face of Security)
[If a restricted security, then insert -- THE SECURITY (OR ITS PREDECESSOR)
EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY AND ANY SHARES OF COMMON
STOCK ISSUED UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) INSIDE
THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (B)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES TO A FOREIGN PURCHASER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND,
IN THE CASE OF CLAUSE (B), (C) OR (D), BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY, OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OR ANY SECURITY ISSUED IN EXCHANGE FOR OR IN SUBSTITUTION HEREOF OR UPON
THE CONVERSION HEREOF OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.]
PRIOR TO JANUARY 30, 2000, THE SECURITY EVIDENCED HEREBY MAY NOT BE TRANSFERRED,
IN WHOLE OR IN PART, TO ANY PERSON FOR ANY PURPOSE, EXCEPT BY OPERATION OF LAW
(INCLUDING THE LAWS OF DESCENT OF ANY JURISDICTION) AND EXCEPT THAT MONDIAL
INDUSTRIES LIMITED PARTNERSHIP, A WISCONSIN LIMITED PARTNERSHIP, MAY TRANSFER
THE SECURITY EVIDENCED HEREBY AND HELD BY IT, OR A PORTION THEREOF, TO ANY OF
ITS GENERAL OR LIMITED PARTNERS OR SHAREHOLDERS AND HAZELBANK, INC., A WISCONSIN
CORPORATION, MAY TRANSFER THE SECURITY EVIDENCED HEREBY AND HELD BY IT, OR A
PORTION THEREOF, TO ANY OF ITS SHAREHOLDERS.
A-1
<PAGE>
PLAYTEX PRODUCTS, INC.
---------------
6.0% CONVERTIBLE SUBORDINATED NOTES due 2004
No. ________ $____________
PLAYTEX PRODUCTS, 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
January 31, 2004, at the office or agency of the Company referred to below, and
to pay interest thereon from January 29, 1999 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on January 31 and July 31 commencing July 31, 1999 at the rate of 6.0% per
annum, in United States dollars, until the principal hereof is paid or duly
provided for.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be January 15 or July 15 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so paid, or duly provided for, and interest on such defaulted interest at
the interest rate borne by the Securities, to the extent lawful, shall forthwith
cease to be payable to the Holder in whose name such Security is registered as
of such Regular Record Date, and may be paid on the Special Payment Date to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date to be fixed by the
Trustee (and for which notice shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date) or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in The City
of New York, or at such other office or agency of the Company as may be
maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register. Interest shall be
accrued on the basis of a 360-day year of twelve 30-day months.
A-2
<PAGE>
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature, this Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
Dated: ____________
PLAYTEX PRODUCTS, INC.
By:______________________
A-3
<PAGE>
(Form of Reverse of Security)
1. This Security is one of a duly authorized issue of Securities of the
Company designated as its 6.0% Convertible Subordinated Notes due 2004 (herein
called the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $50,000,000, which may be
issued under and are subject to the terms of an indenture (herein called the
"Indenture") dated as of January 29, 1999, between the Company and Marine
Midland Bank, as trustee (together with any successor Trustee under the
Indenture, the "Trustee"), 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 Trustee and the Holders, and of the terms upon which the Securities
are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a) the
entire Indebtedness on this Security and (b) certain covenants and related
Defaults and Events of Default, in each case upon compliance with certain
conditions set forth therein.
2. The payment of the principal of, interest on or any other amounts
due on the Securities is subordinated in right of payment to all existing and
future Senior Indebtedness of the Company, as described in the Indenture. Each
Holder, by accepting a Security, agrees to such subordination and authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
as its attorney-in-fact for such purpose.
3. The Securities are not redeemable by the Company prior to January
29, 2002. Thereafter, the Securities are subject to redemption, in whole or in
part, at the option of the Company upon not less than 30 nor more than 60 days'
prior notice to the Holders by first-class mail, at the election of the Company,
in amounts of $1,000 or integral multiples of $1,000 at a redemption price equal
to 100% of the principal amount, together with accrued and unpaid interest, to
the Redemption Date (subject to the right of Holders of record on relevant
Regular Record Dates or Special Record Dates to receive interest due on an
Interest Payment Date).
Notwithstanding the foregoing, at any time following the Issue Date,
the Company, at its option, may redeem the Securities, in whole or in part, at
any time within 90 days after a Change of Control upon not less than 30 nor more
than 60 days' prior notice to each Holder of Securities to be redeemed in
amounts of $1,000 or an integral multiple thereof, at a redemption price equal
to the sum of (i) 101% of the principal amount thereof plus (ii) accrued and
unpaid interest to the redemption date (subject to the right of Holders of
record on relevant Record Dates or Special Record Dates to receive interest due
on an Interest Payment Date).
A-4
<PAGE>
If less than all of the Securities are to be redeemed, such portion of
the Securities shall be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable.
In the case of any redemption of Securities, interest installments
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities of record as of the close of business on the
relevant Regular Record Date or Special Record Date referred to on the face
hereof. Securities (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.
4. Upon the occurrence of a Change of Control, each Holder shall have
the right to require the Company to purchase all or a portion of such Holder's
Securities in amounts of $1,000 or integral multiples of $1,000, at a purchase
price in cash equal to 101% of the principal amount thereof, plus accrued and
unpaid interest to the date of purchase.
5. If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture. Notwithstanding the foregoing, in the
case of an Event of Default from certain events of bankruptcy or insolvency with
respect to the Company, all outstanding Securities will become due and payable
without further action or notice.
6. The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture and the Securities at
any time with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of not less than a
majority in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and the Securities and
certain past Defaults under the Indenture and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange therefor or in lieu hereof whether or not notation of such consent
or waiver is made upon this Security.
7. Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security has the right, at its option, at any time following
January 30, 2000 and prior to the close of business on the Business Day
immediately preceding January 31, 2004, or in case this Security (or a portion
hereof) is called for redemption or
A-5
<PAGE>
the Company has made a Change of Control Purchase Offer, then in respect of this
Security (or such portion hereof) until and including but (unless the Company
defaults in making the payment due upon redemption or the consummation of the
Change of Control Offer, as the case may be) not after, the close of business on
the Business Day immediately preceding the corresponding Redemption Date or the
Change of Control Purchase Date, as the case may be, to convert this Security
(or any portion of the principal amount hereof which is $1,000 or an integral
multiple thereof), at the initial Conversion Price of $19.1475 per share,
subject to adjustment as provided in Article Thirteen of the Indenture. The
number of shares of Common Stock issuable upon conversion of this Security is
determined by dividing the principal amount hereof, or of such portion being
converted, by the Conversion Price in effect on the Conversion Date.
To convert this Security (or any portion hereof), the Holder must
surrender this Security and satisfy the other requirements set forth in Section
1302 of the Indenture. In case such surrender shall be made during the period
from the close of business on any Regular Record Date to the opening of business
on the next succeeding Interest Payment Date (unless this Security or the
portion hereof being converted has been called for redemption on a Redemption
Date or repurchase on a Change of Control Purchase Date within such period
between and including such Regular Record Date and such Interest Payment Date
and, as a result, the right to convert would terminate during such period), the
Security shall be accompanied by payment in New York Clearing House Funds or
other funds acceptable to the Company of an amount equal to the interest payable
on such Interest Payment Date on the principal amount of this Security then
being converted. Subject to the aforesaid requirement for payment of interest
and, in the case of a conversion after the close of business on any Regular
Record Date and on or before the next succeeding Interest Payment Date, to the
right of the Holder of this Security (or any Predecessor Security) of record at
such Regular Record Date to receive an installment of interest, no payment or
adjustment is to be made on conversion for interest accrued hereon or dividends
on the Common Stock issued on conversion.
No fractions of shares or scrip representing fractions of shares will
be issued on conversion, but instead of any fractional interest the Company
shall pay a cash adjustment or round up to the next higher whole share as
provided in Article Thirteen of the Indenture. The Conversion Price is subject
to adjustment as provided in Article Thirteen of the Indenture. In addition, the
Indenture provides that in case of certain reclassifications, consolidations,
mergers, sales or transfers of assets or other transactions pursuant to which
the Common Stock is converted into the right to receive other securities, cash
or other property, the right to convert this Security into shares of Common
Stock may be changed, as set forth in the Indenture, into a right to convert it
into securities, cash or other property.
8. No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the Company
or any other obligor under the Securities (in the event such other obligor is
obligated to make payments in respect of the Securities), which is absolute and
unconditional, to pay the principal of, premium, if
A-6
<PAGE>
any, and interest on this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
9. As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless (a) such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default, (b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, (c) the
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Securities a direction inconsistent with such request
and (d) the Trustee shall have failed to institute such proceeding within 60
days; provided, however, that such limitations do not apply to a suit instituted
by the Holder hereof for the enforcement of payment of the principal of (and
premium, if any) or any interest on this Security on or after the respective due
dates expressed herein.
10. As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose in
The City of New York or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
11. The Securities are issuable only in registered form without coupons
in denominations. The Securities initially shall be issuable only in
denominations of $1,000 and any integral multiple thereof and thereafter may be
issued in any denominations. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
12. Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and none of
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
13. Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer or disposition (other than pursuant to a lease) of all or
substantially all
A-7
<PAGE>
of the properties and assets of the Company in accordance with the Indenture,
subject to the terms and conditions of the Indenture, the successor Person to
such transaction shall become the obligor on this Security, and the Company
shall be discharged from all obligations and covenants under this Security and
the Indenture.
14. All terms used in this Security which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
A-8
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
MARINE MIDLAND BANK, as Trustee
By:____________________________
Authorized Signatory
A-9
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or federal tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:___________
Your Signature:_________________________________________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee.
A-10
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security purchased
by the Company pursuant to Section 908 of the Indenture check the box: [ ]
If you want to have only part of the Security purchased by the Company
pursuant to Section 908 of the Indenture, state the amount (in integral
multiples of $1,000) you elect to have purchased:
$ ___________________________
Date: _______________________
Your Signature:_________________________________________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee.
A-11
<PAGE>
EXHIBIT B
(Form of Conversion Notice)
To: Playtex Products, Inc.
The undersigned holder of this Security hereby irrevocably exercises
the option to convert this Security, or portion hereof (which is $1,000
principal amount or an integral multiple thereof) below designated, for shares
of Common Stock, par value $0.01 per share, of Playtex Products, Inc. on
_________, _____ (the "Specified Date") in accordance with the terms of the
Indenture referred to in this Security. The undersigned acknowledges that in
order for such conversion to be effective, the Specified Date must be a Business
Day and be at least 30 days after the date of Playtex's receipt of this notice,
except in the event that there is an outstanding tender offer for shares of
Playtex's Common Stock pursuant to Section 14 of the Exchange Act in which case
the Specified Date must be on a Business Day and be at least five days, after
the date of the Company's receipt of this notice. The undersigned directs that
the shares issuable and deliverable upon such conversion, together with any
check in payment for fractional shares and any Securities representing any
unconverted principal amount hereof, be issued and delivered to the undersigned
unless a different name has been indicated below. If shares or any portion of
this Security not converted are to be issued in the name of a Person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Date: ______________________
[Insert Name of Holder]
_________________________________________
By: _____________________________________
Name:
Title:
Portion of Note to be converted
($1,000 or an integral
multiple thereof): $___________
Amount of Substitute Note to be
issued: $__________
cc: Paul, Weiss, Rifkind, Wharton and Garrison
B-1
<PAGE>
EXHIBIT C
FORM OF CERTIFICATION FOR TRANSFER
OR EXCHANGE OF NON-GLOBAL RESTRICTED SECURITY TO
RESTRICTED GLOBAL SECURITY
(Transfers and exchanges pursuant to
Section 211(d)(i) of the Indenture)
Marine Midland Bank
140 Broadway, 12th Floor
New York, New York 10005
Attention: Corporate Trust Administration--Playtex Products
Re: PLAYTEX PRODUCTS, INC.
6.0% Convertible Subordinated Notes due 2004
(the "Securities")
--------------------------------------------
Reference is hereby made to the Indenture, dated as of January 29, 1999
(the "Indenture"), among Playtex Products, Inc., as Issuer, and Marine Midland
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
This letter relates to $__________ principal amount of Restricted
Securities held in definitive form (CUSIP No. __________) by [insert name of
transferor] (the "Transferor"). The Transferor has requested an exchange or
transfer of such Securities.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that (i) such Securities are owned by the
Transferor and are being exchanged without transfer or (ii) such transfer has
been effected pursuant to and in accordance with Rule 144A or another exemption
under the United States Securities Act of 1933, as amended (the "Securities
Act") and accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 144A:
(A) the Securities are being transferred to a person that the
Transferor reasonably believes is purchasing the Securities for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion;
(B) such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A; and
C-1
<PAGE>
(C) the Securities have been transferred in a transaction
meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States; or
(2) if the transfer has been effected pursuant to another exemption
under the Act:
(A) the Securities were transferred to a person that the
Transferor reasonably believes is an Institutional Accredited Investor;
and
(B) the Securities have been transferred pursuant to an
exemption from the Securities Act and made in accordance with any
applicable securities laws of any state of the United States.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certification to any interested party in such proceeding.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Issuer.
Dated:______________, _____
[Insert Name of Transferor]
By: _____________________________________
Name:
Title:
cc: Playtex Products, Inc.
C-2
<PAGE>
EXHIBIT D
FORM OF TRANSFEREE LETTER OF REPRESENTATION
--------------, ------
Marine Midland Bank
140 Broadway, 12th Floor
New York, New York 10005
Attention: Corporate Trust Administration--Playtex Products
Re: Playtex Products, Inc.
6.0% Convertible Subordinated Notes Due 2004
--------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of 6.0% Convertible
Subordinated Notes due 2004 (the "Convertible Notes") of Playtex Products, Inc.
(the "Company"), we hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act"), (an "Institutional Accredited Investor"), or an
entity in which all of the equity owners are Institutional Accredited
Investors;
(ii) any purchase of Convertible Notes by us will be for our
own account or for the account of one or more other Institutional
Accredited Investors as to which we exercise sole investment
discretion;
(iii) in the event that we purchase any Convertible Notes, we
will acquire such Convertible Notes having a minimum purchase price of
at least $100,000 for our own account and for each separate account for
which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks
of purchasing the Convertible Notes and we and any accounts for which
we are acting are able to bear the economic risks of our or their
investment; and
(v) we are not acquiring the Convertible Notes with a view to
any distribution thereof in a transaction that would violate the
Securities Act or the securities laws of any State of the United States
or any other applicable
D-1
<PAGE>
jurisdiction; provided that the disposition of our property and the
property of any accounts for which we are acting as fiduciary shall
remain at all times within our control.
We understand that the Convertible Notes have not been registered under
the Securities Act, and we agree, on our own behalf and on behalf of each
account for which we acquire any Convertible Notes, that such Convertible Notes
may be offered, resold, pledged or otherwise transferred only (i) to a person
who we reasonably believe to be a qualified institutional buyer (as defined in
Rule 144A under the Securities Act) in a transaction meeting the requirements of
Rule 144A, in a transaction meeting the requirements of Rule 144 under the
Securities Act, outside the United States to a foreign person in a transaction
meeting the requirements of Rule 904 under the Securities Act, or in accordance
with another exemption from the registration requirements of the Securities Act
(and, unless such transfer occurs in a transaction meeting the requirements of
Rule 144A, based upon an opinion of counsel if the Company so requests), (ii) to
the Company or (iii) pursuant to an effective registration statement under the
Securities Act, and, in each case, in accordance with any applicable securities
laws of any State of the United States or any other applicable jurisdiction. We
understand that the registrar will not be required to accept for registration of
transfer any Convertible Notes, except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that the Convertible Notes purchased
by us will bear a legend reflecting the substance of this paragraph. We further
agree to provide to any person acquiring any of the Convertible Notes from a
notice advising such person that resales of the Convertible Notes are restricted
as stated herein.
D-2
<PAGE>
We acknowledge that you, the Company and others will rely upon our
confirmation, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein cease to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
Very truly yours,
---------------------------------------
(Name of Purchaser)
By: ___________________________________
Date: _________________________________
Upon transfer the Convertible Notes would be registered in the name of
the new beneficiary owner as follows:
Name: _________________________________
Address: ______________________________
Taxpayer ID Number: ___________________
D-3
<PAGE>
EXHIBIT E
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
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.
E-1
================================================================================
REGISTRATION RIGHTS AGREEMENT
between
PLAYTEX PRODUCTS, INC.,
and
MONDIAL INDUSTRIES L.P.
---------------------------------------
Dated as of January 29, 1999
---------------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
1. Background............................................................1
2. Registration Under Securities Act, etc................................1
2.1 Incidental Registration......................................1
2.2 Registration Procedures......................................2
2.3 Underwritten Offerings.......................................5
2.4 Preparation; Reasonable Investigation........................6
2.5 Indemnification..............................................6
3. Definitions..........................................................10
4. Rule 144.............................................................12
5. Amendments and Waivers...............................................12
6. Nominees for Beneficial Owners.......................................13
7. Notices..............................................................13
8. Assignment...........................................................14
9. Calculation of Percentage Interests in Registrable Securities........14
10. Remedies.............................................................14
11. Severability.........................................................14
12. Entire Agreement.....................................................14
13. Headings.............................................................14
14. Governing Law........................................................14
15. Counterparts.........................................................15
16. No Inconsistent Agreements...........................................15
i
<PAGE>
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of January
29, 1999, between PLAYTEX PRODUCTS, INC., a Delaware corporation (the
"Company"), and MONDIAL INDUSTRIES LIMITED PARTNERSHIP, a Wisconsin limited
partnership (the "Seller").
The parties hereby agree as follows:
1. Background. Pursuant to an Asset Purchase Agreement, dated as of
January 6, 1999, among the Seller and the Company (the "Purchase Agreement"),
the Company agrees with the Seller, (i) for its benefit and (ii) for the benefit
of the holders from time to time of the Notes (including the Seller) and the
holders from time to time of the Common Stock issued upon conversion of the
Notes to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition precedent to the obligation of the
Seller to enter into and complete the closing under the Purchase Agreement. As
partial consideration for the purchase of the assets of the Seller, the Company
will have delivered to the Seller at the Closing (as defined in the Purchase
Agreement) an aggregate of $50,000,000 principal amount of Notes of the Company.
The Notes are convertible into such number of shares (the "Shares") of Common
Stock as determined in accordance with the terms set forth in the Indenture.
Capitalized terms used herein but not otherwise defined shall have the meanings
given them in Section 3.
2. Registration Under Securities Act, etc.
2.1 Incidental Registration.
(a) Right to Include Registrable Securities. If at
any time following the first anniversary of the closing of the transactions
contemplated by the Purchase Agreement, the Company proposes to register any of
its Common Stock under the Securities Act by registration on any form other than
Forms S-4 or S-8 or another similar form under the Securities Act which would
not permit the inclusion of Registrable Securities, whether or not for sale for
its own account, it will each such time give prompt written notice to all
registered holders of Registrable Securities of its intention to do so and of
such holders' rights under this Section 2.1. Upon the written request of any
such holder (a "Requesting Holder") made as promptly as practicable and in any
event within 30 days after the receipt of any such notice from the Company (15
days if the Company states in such written notice or gives telephonic or
telecopied notice to all registered holders of Registrable Securities, with
written confirmation to follow promptly thereafter, that (i) such registration
will be on Form S-3 and (ii) such shorter period of time is required because of
a planned filing date) (which request shall specify the Registrable Securities
intended to be disposed of by such Requesting Holder), the Company will use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the Requesting Holders thereof; provided, that prior to the effective date of
the Registration Statement filed in connection with such registration,
immediately upon notification to the Company from the managing
<PAGE>
2
underwriter of the price at which such securities are to be sold, if such price
is below the price which any Requesting Holder shall have indicated to be
acceptable to such Requesting Holder, the Company shall so advise such
Requesting Holder of such price, and such Requesting Holder shall then have the
right to withdraw its request to have its Registrable Securities included in
such Registration Statement; provided, further, however, that if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the Registration Statement filed in connection
with such registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the Company may, at its
election, give written notice of such determination to each Requesting Holder of
Registrable Securities and (x) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from any obligation of the Company to
pay the Registration Expenses in connection therewith), and (y) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registering such
other securities.
(b) Priority in Incidental Registrations. If the
managing underwriter of any underwritten offering shall inform the Company in
writing of its opinion that the number or type of Registrable Securities and the
Third Party Securities requested to be included in such registration would
materially adversely affect such offering, and the Company has so advised the
Requesting Holders, then the Company will include in such registration, to the
extent of the number and type which the Company is so advised can be sold in (or
during the time of) such offering, first, (x) if such registration is being
effected pursuant to the request of Securityholders under the demand
registration provisions of one of the Other Registration Rights Agreements, all
Third Party Securities so requested by such Securityholders under such Other
Registration Rights Agreement, or (y) if such registration is not being so
effected, all securities of the Company to be sold for its own account, second
such Registrable Securities requested to be included in such registration
pursuant to this Agreement and such Third Party Securities requested to be
included in such registration pursuant to the provisions of the Other
Registration Rights Agreements comparable to this Section 2.1, PRO RATA (based
on the number of Registrable Securities requested to be included therein by each
Requesting Holder and the number of Third Party Securities requested to be
included therein by each Securityholder) among such Requesting Holders and the
Securityholders, and third, if clause (x) of this Section 2.1(b) applies, all
securities proposed by the Company to be sold for its own account.
(c) Expenses. The Company will pay all Registration
Expenses in connection with any registration contemplated pursuant to this
Section 2.1.
2.2 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities
<PAGE>
3
under the Securities Act as provided in Section 2.1, the Company will, as
expeditiously as possible:
(i) prepare and (within 45 days after the
end of the period within which requests for registration may be given
to the Company) file with the Commission the requisite Registration
Statement to effect such registration and thereafter use its best
efforts to cause such Registration Statement to become effective;
provided, however, that the Company may discontinue any registration of
its securities which are not Registrable Securities (and, under the
circumstances specified in Section 2.1(a), Registrable Securities) at
any time prior to the effective date of the Registration Statement
relating thereto;
(ii) furnish to each seller of Registrable
Securities covered by such Registration Statement, such number of
conformed copies of such Registration Statement and of each such
amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus contained in such Registration
Statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities
Act, and such other documents, as such seller may reasonably request;
(iii) use its reasonable best efforts (x) to
register or qualify all Registrable Securities and other securities
covered by such Registration Statement under such other securities or
blue sky laws of such States of the United States of America where an
exemption is not available and as the sellers of Registrable Securities
covered by such Registration Statement shall reasonably request, (y) to
keep such registration or qualification in effect for so long as such
Registration Statement remains in effect and (z) to take any other
action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the
securities to be sold by such sellers, except that the Company shall
not for any such purpose be required to qualify generally to do
business as a foreign corporation or become subject to taxation in any
jurisdiction wherein it would not but for the requirements of this
subdivision (iii) be obligated to be so qualified or to consent to
general service of process in any such jurisdiction;
(iv) use its best efforts to cause all
Registrable Securities covered by such Registration Statement to be
registered with or approved by such other federal or state governmental
agencies or authorities as may be necessary in the reasonable opinion
of counsel to the Company and counsel to the seller or sellers of
Registrable Securities to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities;
<PAGE>
4
(v) furnish at the effective date of such
Registration Statement to each seller of Registrable Securities, and
each such seller's underwriters, if any, a signed counterpart of:
(x) an opinion of counsel for the
Company, dated the effective date of such Registration
Statement and, if applicable, the date of the closing under
the underwriting agreement, and
(y) a "comfort" letter signed by
the independent public accountants who have certified the
Company's financial statements included or incorporated by
reference in such Registration Statement,
covering substantially the same matters with respect to such
Registration Statement (and the prospectus included therein) and, in
the case of the accountants' comfort letter, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountants' comfort
letters delivered to the underwriters in underwritten public offerings
of securities and, in the case of the accountants' comfort letter, such
other financial matters, and, in the case of the legal opinion, such
other legal matters, as the underwriters may reasonably request;
(vi) notify each seller of Registrable
Securities covered by such Registration Statement at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event
as a result of which, the prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, in
the light of the circumstances under which they were made, and at the
request of any such seller promptly prepare and furnish to it a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include 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 in the light of the circumstances under which
they were made;
(vii) otherwise use its best efforts to
comply with all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably
practicable (but not more than eighteen months after the effective date
of such Registration Statement), an earnings statement covering the
period of at least twelve months beginning with the first day of the
first full fiscal quarter of the Company after the effective date of
<PAGE>
5
such Registration Statement, which earnings statement shall satisfy the
provi sions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder;
(viii) provide and cause to be maintained a
transfer agent and registrar (which, in each case, may be the Company)
for all Registrable Securities covered by such Registration Statement
from and after a date not later than the effective date of such
registration; and
(ix) use its best efforts to list all
Registrable Securities covered by such Registration Statement on any
national securities exchange on which Registrable Securities of the
same class covered by such Registration Statement are then listed and,
if no such Registrable Securities are so listed, on any national
securities exchange on which the Common Stock is then listed.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company (i) such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and (ii) if requested by the
Company an executed custody agreement and power of attorney in form and
substance reasonably satisfactory to the Company with respect to the Registrable
Securities to be registered pursuant to this Agreement.
Each holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
subdivision (vii) of this Section 2.2, such holder will forthwith discontinue
such holder's disposition of Registrable Securities pursuant to the Registration
Statement relating to such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by subdivision
(vii) of this Section 2.2 and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in such holder's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice.
2.3 Underwritten Offerings.
(a) Incidental Underwritten Offerings. If the Company
proposes to register any of its securities under the Securities Act as
contemplated by Section 2.1 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any
Requesting Holder of Registrable Securities, use its reasonable best efforts to
arrange for such underwriters to include all the Registrable Securities to be
offered and sold by such Requesting Holder among the securities of the Company
to be distributed by such underwriters, subject to the provisions of Section
2.1(b). The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting
<PAGE>
6
agreement between the Company and such underwriters and may, at their option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. Any such
Requesting Holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Requesting Holder, such Requesting Holder's Registrable Securities and such
Requesting Holder's intended method of distribution or any other representations
required by applicable law.
2.4 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each Registration Statement under the Securities
Act pursuant to this Agreement, the Company will give the holders of Registrable
Securities to be registered under such Registration Statement, their
underwriters, if any, and their respective counsel the opportunity prior to
filing to review such Registration Statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto,
and will give each of them such reasonable access to its books and records and
such opportunities to discuss the business of the Company with its officers and
the independent public accountants who have certified its financial statements
as shall be necessary, in the opinion of such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.5 Indemnification.
(a) Indemnification by the Company. The Company will,
and hereby does, indemnify and hold harmless, in the case of any Registration
Statement filed pursuant to Section 2.1, each seller of any Registrable
Securities covered by such Registration Statement and each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such seller or any such underwriter
within the meaning of the Securities Act or the Exchange Act, and their
respective directors, officers, partners, agents and affiliates, against any
losses, claims, damages or liabilities, joint or several, to which such seller
or underwriter or any such director, officer, partner, agent, affiliate or
controlling person may become subject under the Securities Act or otherwise,
including, without limitation, the reasonable fees and expenses of legal
counsel, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or
<PAGE>
7
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and the Company will
reimburse such seller or underwriter and each such director, officer, partner,
agent, affiliate and controlling Person for any reasonable legal or any other
expenses incurred by them in connection with investigating or defending any such
loss, claim, liability, action or proceeding; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Registration Statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such seller or underwriter, as the case may
be, specifically stating that it is for use in the preparation thereof;
provided, further, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement of any material
fact contained in any such Registration Statement, preliminary prospectus, final
prospectus or summary prospectus contained therein or any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which they were made not
misleading in a prospectus or prospectus supplement, if (i) such untrue
statement or omission is completely corrected in an amendment or supplement to
such prospectus or prospectus supplement, the seller of the Registrable
Securities has an obligation under the Securities Act to deliver a prospectus or
prospectus supplement in connection with such sale of Registrable Securities and
the seller of Registrable Securities thereafter fails to deliver such prospectus
or prospectus supplement as so amended or supplemented prior to or concurrently
with the sale of Registrable Securities to the person asserting such loss,
claim, damage or liability after the Company has furnished such seller with a
sufficient number of copies of the same or (ii) if the seller received written
notice from the Company of the existence of such an untrue statement or such an
omission and the seller continued to dispose of Registrable Securities prior to
the time of the receipt of either (a) an amended or supplemented prospectus or
prospectus supplement that completely corrected the untrue statement or the
omission or (b) a notice from the Company that the use of the existing
prospectus or prospectus supplement may be resumed. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such seller or underwriter or any such director, officer, partner, agent,
affiliate or controlling person and shall survive the transfer of such
securities by such seller or underwriter.
(b) Indemnification by the Sellers. As a condition to
including any Registrable Securities in any Registration Statement, the Company
shall have received an undertaking reasonably satisfactory to it from the
prospective seller of such Registrable Securities, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
2.5(a)) the Company, and each director
<PAGE>
8
of the Company, each officer of the Company and each other Person, if any, who
participates as an underwriter in the offering or sale of such securities and
each other Person who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, with respect to any statement
or alleged statement in or omission or alleged omission from such Registration
Statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such seller
specifically stating that it is for use in the preparation of such Registration
Statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; provided, however, that the liability of such
indemnifying party under this Section 2.5(b) shall be limited to the amount of
proceeds received by such indemnifying party in the offering giving rise to such
liability. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer of such securities
by such seller.
(c) Notices of Claims, etc. Promptly after receipt by
an indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.5(a) or (b), such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Sec tion 2.5, except to the extent that the
indemnifying party is actually and materially prejudiced by such failure to give
notice. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that any indemnified
party may, at its own expense, retain separate counsel to participate in such
defense. Notwithstanding the foregoing, in any action or proceeding in which
both the Company and an indemnified party is, or is reasonably likely to become,
a party, such indemnified party shall have the right to employ separate counsel
at the Company's expense and to control its own defense of such action or
proceeding if, in the reasonable opinion of counsel to such indemnified party,
(a) there are or may be legal defenses available to such indemnified party or to
other indemnified parties that are different from or additional to those
available to the Company or (b) any conflict or potential conflict exists
between the Company and such indemnified party that would make such separate
representation advisable; provided, however, that in no event shall the Company
be required to pay fees and expenses under this Section 2.5 for more than one
firm of attorneys representing the indemnified parties (together, if
appropriate, with one firm of local counsel per jurisdiction) in any one legal
action or group of related legal actions. No indemnifying party shall be liable
for any settle-
<PAGE>
9
ment of any action or proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No indemnifying party shall, without
the consent of the indemnified party, which consent shall not be unreasonably
withheld, consent to entry of any judgment or enter into any settlement which
does not include as a term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to such claim
or litigation or which requires action other than the payment of money by the
indemnifying party.
(d) Contribution. If the indemnification provided for
in this Section 2.5 shall for any reason be held by a court to be unavailable to
an indemnified party under Section 2.5(a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under Section 2.5(a) or (b), the indemnified party
and the indemnifying party under Section 2.5(a) or (b) shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating the same), (i) in
such proportion as is appropriate to reflect the relative fault of the Company
and the prospective sellers of Registrable Securities covered by the
Registration Statement which resulted in such loss, claim, damage or liability,
or action or proceeding in respect thereof, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action or
proceeding in respect thereof, as well as any other relevant equitable
considerations or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and such prospective
sellers from the offering of the securities covered by such Registration
Statement, provided, that for purposes of this clause (ii), the relative
benefits received by the prospective sellers shall be deemed not to exceed the
amount of proceeds received by such prospective sellers. 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. Such prospective sellers'
obligations to contribute as provided in this Section 2.5(d) are several in
proportion to the relative value of their respective Registrable Securities
covered by such Registration Statement and not joint. In addition, no Person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's consent, which
consent shall not be unreasonably withheld.
(e) Other Indemnification. Indemnification and
contribution similar to that specified in the preceding subdivisions of this
Section 2.5 (with appropriate modifications) shall be given by the Company and
each seller of Registrable Securities with respect to any required registration
or other qualification of securities under any federal or state law or
regulation of any governmental authority other than the Securities Act.
(f) Indemnification Payments. The indemnification and
contribution required by this Section 2.5 shall be made by periodic payments of
<PAGE>
10
the amount thereof during the course of the investigation or defense, as and
when bills are received or expense, loss, damage or liability is incurred upon
receipt by the Company of written invoices or statements, describing in
reasonable detail the expenses incurred and the amount and basis of calculation
thereof.
3. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
"Blum Agreement" means the Registration Rights Agreement dated as of
June 1, 1998, as amended, supplemented or otherwise modified from time to time,
between the Company and RCBA Playtex, L.P.
"Childs Agreement" means the Registration Rights Agreement, dated as of
January 28, 1998, as amended and restated by the First Amended and Restated
Registration Rights Agreement, dated as of June 1, 1998, as amended,
supplemented or otherwise modified from time to time, between Playtex Products,
Inc. and J.W. Childs Equity Partners L.P.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" shall mean and include the Common Stock, par value $.01
per share, of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, in each case, as issuable or
issued upon conversion of the Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any superseding Federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934, as amended, shall
include a reference to the comparable section, if any, of any such superseding
Federal statute.
"HWH Agreement" means the Registration Rights Agreement dated as of
March 17, 1995, as amended and restated by the First Amended and Restated
Registration Rights Agreement, dated as of June 1, 1998, as amended,
supplemented or otherwise modified from time to time, among the Company, HWH
Capital Partners, L.P., HWH Valentine Partners, L.P., and HWH Surplus Valentine
Partner, L.P.
"Indenture" means the Indenture, dated as of January 29, 1999 between
the Company and Marine Midland Bank, as Trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with
the terms hereof.
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11
"Notes" means the 6% Convertible Subordinated Notes Due 2004 of the
Company being issued and sold pursuant to the Purchase Agreement and the
Indenture.
"Other Registration Rights Agreement" means each of the Blum Agreement,
the Childs Agreement and the HWH Agreement.
"Person" means any individual, firm, corporation, partnership, limited
liability company or partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind and shall include any
successor (by merger or otherwise) of such entity.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Section 2, including, without limitation, all
registration and filing fees, all fees of the New York Stock Exchange, Inc.,
other national securities exchanges or the National Association of Securities
Dealers, Inc., all fees and expenses of complying with securities or blue sky
laws, all word processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of "comfort" letters
required by or incident to such performance and compliance, any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities (excluding any underwriting discounts or commissions with respect to
the Registrable Securities) and the reasonable fees and expenses of one counsel
to the Requesting Holders (selected by Requesting Holders representing at least
50% of the Registrable Securities covered by such registration); provided,
however, that in the event the Company shall determine, in accordance with
Section 2.1(a), not to register any securities with respect to which it had
given written notice of its intention to so register to holders of Registrable
Securities, all of the costs of the type (and subject to any limitation to the
extent) set forth in this definition and incurred by Requesting Holders in
connection with such registration on or prior to the date the Company notifies
the Requesting Holders of such determination shall be deemed Registration
Expenses.
"Registration Statement" means any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"Registrable Securities" means (A) the Shares of the Company into which
the Notes are convertible or converted, and any Related Registrable Securities
and (B) the Notes. As to any particular Registrable Securities, once issued,
such securities shall cease to be Registrable Securities when (i) a Registration
Statement
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12
with respect to the sale of such securities shall have become effective under
the Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement, (ii) they may have been sold as permitted by
Rule 144 (or any successor provision) under the Securities Act, (iii) they shall
have been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration of such
distribution under the Securities Act, (iv) they shall have ceased to be
outstanding, (v) in the case of a Note, such Note is converted into shares of
Common Stock in accordance with the terms of the Indenture or (vi) in the case
of a Note, such Note is eligible to be sold pursuant to paragraph (k) of Rule
144 and, as a result of the event or circumstance described in any of the
foregoing clauses (i) through (iv), the legends with respect to transfer
restrictions required under the Indenture (other than any such legends required
solely as the consequence of the fact that such Note is owned by, or was
previously owned by, the Company or an Affiliate of the Company) are removed or
removable in accordance with the terms of the Indenture. All references to
percentages of Registrable Securities shall be calculated pursuant to Section 9.
"Related Registrable Securities" means with respect to the Shares any
securities of the Company issued or issuable with respect to any of the Shares
by way of a dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise.
"Requesting Holder" is defined in Section 2.1.
"Securities Act" means the Securities Act of 1933, as amended, or any
superseding Federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933, as amended, shall include a
reference to the comparable section, if any, of any such superseding Federal
statute.
"Securityholder" means any of the parties to each of the Other
Registration Rights Agreements, in each case other than the Company.
4. Rule 144. The Company shall take all actions reasonably necessary to
enable holders of Registrable Securities to sell such securities without
registration under the Securities Act within the limitation of the provisions of
(a) Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rules or regulations hereafter adopted by the
Commission. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such requirements.
5. Amendments and Waivers. This Agreement may be amended with the
consent of the Company and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if
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13
the Company shall have obtained the written consent to such amendment, action or
omission to act, of the holder or holders of at least 66-2/3% of the Registrable
Securities affected by such amendment, action or omission to act. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 5, whether or not such Registrable
Securities shall have been marked to indicate such consent.
6. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number or percentage of
shares of Registrable Securities held by any holder or holders of Registrable
Securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
7. Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(a) if to the Seller, addressed to it in the manner set forth
in the Purchase Agreement, or at such other address as it shall have furnished
to the Company in writing in the manner set forth herein;
(b) if to any other holder of Registrable Securities, at the
address that such holder shall have furnished to the Company in writing in the
manner set forth herein, or, until any such other holder so furnishes to the
Company an address, then to and at the address of the last holder of such
Registrable Securities who has furnished an address to the Company; or
(c) if to the Company, addressed to it in the manner set forth
in the Purchase Agreement, or at such other address as the Company shall have
furnished to each holder of Registrable Securities at the time outstanding in
the manner set forth herein.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by a
courier, if delivered by overnight courier service; three business days after
being deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.
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14
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and, with respect to the
Company, the Seller and their respective successors and permitted assigns.
Except by operation of law, this Agreement may not be assigned by the Company
without the prior written consent of the holders of 66-2/3% of the Registrable
Securities outstanding at the time such consent is requested.
9. Calculation of Percentage Interests in Registrable Securities. For
purposes of this Agreement, all references to a percentage of the Registrable
Securities shall be calculated based upon the number of Registrable Securities
out standing at the time such calculation is made.
10. Remedies. Each holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
11. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Seller
shall be enforceable to the fullest extent permitted by law.
12. Entire Agreement. This Agreement, together with the Indenture, are
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement and the
Indenture supersede all prior agreements and understandings between the parties
with respect to such subject matter.
13. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
14. Governing Law. This Agreement has been negotiated, executed and
delivered in the State of New York and shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts made
and to be performed wholly within such state.
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15
15. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed an original and all of which taken together
shall constitute one and the same instrument.
16. No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities, or modify, amend, supplement
or extend any existing agreement with respect to its securities, which is or
will be inconsistent with the rights granted to the holders of Registrable
Securities in this Agreement.
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16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
PLAYTEX PRODUCTS, INC.
By:______________________________
Name:
Title:
MONDIAL INDUSTRIES LIMITED
PARTNERSHIP
By:______________________________
Name:
Title:
Exhibit 99.1
------------
FOR IMMEDIATE RELEASE Press Release
PLAYTEX PRODUCTS COMPLETES ACQUISITION
OF DIAPER GENIE(R) BUSINESS
WESTPORT, CT (January 29, 1999) - Playtex Products, Inc. (NYSE: PYX), a leading
diversified consumer and personal products company, announced today it has
completed the previously announced acqusition of the Diaper Genie(R) business,
the leading diaper disposal system in the U.S., from privately held Mondial
Industries Limited Partnership ("Mondial"). The purchase price consisted of $72
million in cash ad the issuance of $50 million in convertible debt to Mondial,
for a total consideration of $122 million.
The newly issued convertible debt will bear interest of 6% and will be
convertible after January 29, 2000 at the holders' option into approximately 2.6
million shares of Playtex common stock at a conversion price of approximately
$19.15 per share. The notes will mature in 2004 and are callable by Playtex
after January 29, 2002.
About Playtex Products
- ----------------------
Playtex Products, Inc. is a leading manufacturer and distributor of a
diversified portfolio of consumer and personal products. Infant Care is the
largest business segment and market leader with Playtex(R) infant feeding
products, Binky(R) pacifiers, Chubs(R) baby wipes, Wet Ones(R), and Mr.
Bubble(R). Feminine Care offers a wide range of Playtex(R) tampons and leads the
plastic applicator segment. Sun Care includes the #2-selling Banana Boat(R) and
BioSun(R). Household Products includes Woolite(R) rug and upholstery cleaning
products and Playtex(R) Gloves, the leader in the household latex glove market.
Personal Grooming includes market leaders Binaca(R) and Ogilvie(R).
About Diaper Genie(R)
- ---------------------
o Introduced in 1993 by Mondial, the patented Diaper Genie diaper
disposal system provides a unique system for the convenient and
hygienic disposal of soiled infant diapers. The system is composed of a
plastic storage container and plastic film refill cartridge. The Diaper
Genie totally encapsulates a soiled diaper, individually wrapping it in
a thin plastic film tubing and storing it in the base of the disposal
container, thereby reducing odor and bacteria.
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o Refill cartridges are purchased separately. Diaper Genie is the only
diaper pail and hamper product that sells branded, special purpose
refills.
o The exclusive "twist" action utilized by the Diaper Genie sealing
mechanism, the key feature of the product, is protected by patent until
the end of 2008. The exclusive refills are also protected by patent.
o A state-of-the-art facility at the company's headquarters in
Streetsboro, Ohio produces the system and refills with proprietary
injection molding tools, patented film handling equipment and
high-speed packaging lines.
o Diaper Genie holds the #1 market position in the diaper pail segment
with an 82% dollar share and 72% unit share.
o The business generated net sales of approximately $42 million and
EBITDA of approximately $13 million in 1998. Roughly two thirds of
sales are from refills.
o Diaper Genie's customers represent most major names in U.S. mass market
consumer goods retailing, including Wal-Mart, K-Mart, Target, Sears and
Toys'R'Us, together with many regional accounts and specialty baby
stores.
For more information, contact:
Michael F. Goss Julie K. Gottlieb
Executive Vice President Director of Investor Relations
and Chief Financial Officer and Communications
Playtex Products, Inc. Playtex Products, Inc.
(203) 341-4264 (203) 341-4262
