<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WESTPOINT STEVENS INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 2200 36-3498354
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
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507 WEST TENTH STREET
WEST POINT, GEORGIA 31833
(706) 645-4000
(Address, including zip code, and telephone number, including area code of
Registrants' principal executive offices)
CHRISTOPHER N. ZODROW, ESQ.
VICE PRESIDENT AND SECRETARY
WESTPOINT STEVENS INC.
507 West Tenth Street
West Point, Georgia 31833
(706) 645-4000
(Name, address, including zip code, and telephone number, including area code of
agent for service)
------------------------
COPIES TO:
HOWARD CHATZINOFF, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153-0119
(212) 310-8000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER NOTE(1) OFFERING PRICE(1) REGISTRATION FEE
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7 7/8% Senior Notes due 2005...... $525,000,000 100% $525,000,000 $154,875
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7 7/8% Senior Notes due 2008...... $475,000,000 100% $475,000,000 $140,125
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(f).
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 24, 1998
PROSPECTUS
$1,000,000,000
OFFER TO EXCHANGE ITS 7 7/8% SENIOR NOTES DUE 2005
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 7 7/8% SENIOR NOTES DUE 2005
AND ITS 7 7/8% SENIOR NOTES DUE 2008
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING 7 7/8% SENIOR NOTES DUE 2008
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 PM., NEW YORK CITY TIME,
ON , 1998, UNLESS EXTENDED.
-----------------------
WestPoint Stevens Inc., a Delaware corporation (the "Company") hereby offers
(the "Exchange Offer"), upon the terms and conditions set forth in this
Prospectus (the "Prospectus") and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), to exchange (i) $1,000 principal amount of its 7 7/8%
Senior Notes due 2005 (the "Senior Notes due 2005"), registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which this prospectus is a part, for each $1,000
principal amount of its outstanding 7 7/8% Senior Notes due 2005 (the "Old
Senior Notes due 2005"), of which $525,000,000 principal amount is outstanding
and (ii) $1,000 principal amount of its 7 7/8% Senior Notes due 2008 (the
"Senior Notes due 2008" and together with the Senior Notes due 2005, the
"Exchange Securities"), registered under the Securities Act, pursuant to a
Registration Statement of which this Prospectus is a part, for each $1,000
principal amount of its outstanding 7 7/8% Senior Notes due 2008 (the "Old
Senior Notes due 2008" and together with the Old Senior Notes due 2005, the "Old
Securities"), of which $475,000,000 principal amount is outstanding,
respectively. The form and terms of the Exchange Securities are the same as the
form and terms of the Old Securities except that (i) the Exchange Securities
will have been registered under the Securities Act and, therefore, will not bear
legends restricting the transfer thereof and (ii) holders of the Exchange
Securities will not be entitled to certain rights of holders of Old Securities
under the Registration Rights Agreements (as defined). The Old Securities and
the Exchange Securities are referred to herein collectively as the "Securities."
The Exchange Securities will evidence the same debt as the Old Securities (which
they replace) and will be issued under and be entitled to the benefits of the
Indentures that govern the Securities, each dated as of June 9, 1998
(collectively, the "Indentures") by and between the Company and The Bank of New
York, as trustee. See "The Exchange Offer" and "Description of Securities."
The Company will accept for exchange any and all Old Securities validly
tendered and not withdrawn prior to 5:00 p.m., New York City time on
, 1998, unless extended by the Company in its sole discretion (the
"Expiration Date"). Tenders of Old Notes may be withdrawn at any time prior to
5:00 p.m. on the Expiration Date. The Exchange Offer is subject to certain
customary conditions. See "The Exchange Offer."
The Old Securities were sold by the Company on June 9, 1998 to Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., NationsBanc
Montgomery Securities LLC, BNY Capital Markets, Inc., First Chicago Capital
Markets, Inc. and Scotia Capital Markets (collectively the "Initial Purchasers")
in a transaction not registered under the Securities Act in reliance upon an
exemption under the Securities Act (the "Initial Offering"). The Initial
Purchasers subsequently placed the Old Securities with qualified institutional
buyers in reliance on Rule 144A under the Securities Act and in offshore
transactions to Non-U.S. persons in reliance on Regulation S under the
Securities Act. Accordingly, the Old Securities may not be reoffered, resold or
otherwise transferred in the United States unless registered under the
Securities Act or unless an applicable exemption from the registration
requirements of the Securities Act is available. The Exchange Securities are
being offered hereunder in order to satisfy the obligations of the Company under
the Registration Rights Agreements entered into among the Company and the
Initial Purchasers in connection with the Initial Offering. See "The Exchange
Offer."
The Senior Notes due 2005 will mature on June 15, 2005 and the Senior Notes
due 2008 will mature on June 15, 2008. Interest on the Securities is payable in
cash semiannually in arrears on June 15 and December 15 of each year, commencing
December 15, 1998. The Securities will be redeemable, in whole or in part, at
any time, at the option of the Company at 100% of the principal amount thereof
plus the Make-Whole Premium (as defined) plus accrued and unpaid interest, if
any, to the date of purchase. In the event of a Change of Control Triggering
Event (as defined), the Company will make an offer to purchase the Securities
then outstanding at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase. See
"Description of the Securities."
The Securities will rank pari passu in right of payment with all existing
and future unsecured and unsubordinated indebtedness of the Company and senior
in right of payment to all subordinated indebtedness of the Company. The
Securities will rank pari passu in right of payment with each other. As of March
31, 1998, on a pro forma basis for the Refinancing (as defined) and the
application of the proceeds therefrom, the Company would have had $343.8 million
of secured indebtedness outstanding and the claims of holders of the Securities
would have been structurally subordinated to $62.2 million of indebtedness and
other liabilities of the Company's subsidiaries. See "Description of the
Securities."
(Continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER THEIR OLD NOTES IN THE EXCHANGE
OFFER.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------
The date of this Prospectus is , 1998
<PAGE> 3
(cover page continued)
Based upon an interpretation by the staff of the Securities and Exchange
Commission (the "Commission") set forth in certain no-action letters issued to
third parties, the Company believes that the Exchange Securities issued pursuant
to the Exchange Offer in exchange for Old Securities may be offered for resale,
resold and otherwise transferred by any holder thereof (other than any such
holder that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such
Exchange Securities are acquired in the ordinary course of such holder's
business and such holder has no arrangement or understanding with any person to
participate in the distribution of such Exchange Securities. See "The Exchange
Offer -- Resale of the Exchange Securities." Holders of Old Securities wishing
to accept the Exchange Offer must represent to the Company, as required by the
Registration Rights Agreements, that such conditions have been met. Each
broker-dealer (a "Participating Broker-Dealer") that receives Exchange
Securities for its own account pursuant to the Exchange Offer must acknowledge
that it will deliver a prospectus in connection with any resale of such Exchange
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of Exchange
Securities received in exchange for Old Securities where such Old Securities
were acquired by such Participating Broker-Dealer as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days after the Expiration Date, it will make this Prospectus
available to any Participating Broker-Dealer for use in connection with any such
resale. See "Plan of Distribution."
The Company will not receive any proceeds from the Exchange Offer. The
Company has agreed to bear the expenses of the Exchange Offer. No underwriter is
being used in connection with the Exchange Offer. Holders of Old Securities not
tendered and accepted in the Exchange Offer will continue to hold such Old
Securities and will be entitled to all the rights and benefits and will be
subject to the limitations applicable thereto under the Indentures and with
respect to transfer under the Securities Act. See "The Exchange Offer."
There has not previously been any public market for the Old Securities or
the Exchange Securities. The Company does not intend to list the Exchange
Securities on any securities exchange or to seek approval for quotation through
any automated quotation system. There can be no assurance that an active market
for the Exchange Securities will develop. See "Risk Factors -- Absence of a
Public Market Could Adversely Affect the Value of Exchange Securities."
Moreover, to the extent that Old Securities are tendered and accepted in the
Exchange Offer, the trading market for untendered and tendered but unaccepted
Old Securities could be adversely affected.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD SECURITIES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF
TRANSMITTAL, NOR ANY EXCHANGE MADE HEREUNDER, SHALL UNDER ANY CIRCUMSTANCES
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.
UNTIL , 1998 (90 DAYS AFTER COMMENCEMENT OF THE
EXCHANGE OFFER), ALL DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE SECURITIES,
WHETHER OR NOT PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
i
<PAGE> 4
(cover page continued)
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
THE EXCHANGE SECURITIES WILL BE AVAILABLE INITIALLY ONLY IN BOOK-ENTRY
FORM. EXCEPT AS DESCRIBED UNDER "BOOK-ENTRY; DELIVERY AND FORM," THE COMPANY
EXPECTS THAT THE EXCHANGE SECURITIES ISSUED PURSUANT TO THE EXCHANGE OFFER WILL
BE REPRESENTED BY A GLOBAL NOTE (AS DEFINED), WHICH WILL BE DEPOSITED WITH, OR
ON BEHALF OF, THE DEPOSITORY TRUST COMPANY ("DTC") AND REGISTERED IN ITS NAME OR
IN THE NAME OF CEDE & CO., ITS NOMINEE. BENEFICIAL INTERESTS IN THE GLOBAL NOTE
REPRESENTING THE EXCHANGE SECURITIES WILL BE SHOWN ON, AND TRANSFERS THEREOF
WILL BE EFFECTED THROUGH, RECORDS MAINTAINED BY DTC AND ITS PARTICIPANTS. AFTER
THE INITIAL ISSUANCE OF THE GLOBAL NOTE, NOTES IN CERTIFICATED FORM WILL BE
ISSUED IN EXCHANGE FOR THE GLOBAL NOTE ONLY UNDER LIMITED CIRCUMSTANCES AS SET
FORTH IN THE INDENTURE. SEE "BOOK-ENTRY; DELIVERY AND FORM."
PROSPECTIVE INVESTORS IN THE EXCHANGE SECURITIES ARE NOT TO CONSTRUE THE
CONTENTS OF THIS PROSPECTUS AS INVESTMENT, LEGAL OR TAX ADVICE. EACH INVESTOR
SHOULD CONSULT ITS OWN COUNSEL, ACCOUNTANT AND OTHER ADVISORS AS TO LEGAL, TAX,
BUSINESS, FINANCIAL AND RELATED ASPECTS OF THE EXCHANGE SECURITIES. THE COMPANY
IS NOT MAKING ANY REPRESENTATION TO ANY PROSPECTIVE INVESTOR IN THE EXCHANGE
SECURITIES REGARDING THE LEGALITY OF AN INVESTMENT THEREIN BY SUCH PERSON UNDER
APPROPRIATE LEGAL INVESTMENT OR SIMILAR LAWS.
------------------------
ii
<PAGE> 5
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN OF THE MATTERS DISCUSSED IN THIS PROSPECTUS MAY CONSTITUTE
FORWARD-LOOKING STATEMENTS FOR PURPOSES OF THE SECURITIES ACT AND THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). SUCH FORWARD-LOOKING
STATEMENTS MAY INVOLVE UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL
RESULTS AND PERFORMANCE OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM FUTURE
RESULTS OR PERFORMANCE EXPRESSED OR IMPLIED BY SUCH STATEMENTS. CAUTIONARY
STATEMENTS REGARDING THE RISKS ASSOCIATED WITH SUCH FORWARD-LOOKING STATEMENTS
INCLUDE, WITHOUT LIMITATION, THOSE STATEMENTS INCLUDED UNDER "RISK FACTORS,"
"SUMMARY," "BUSINESS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" AND ELSEWHERE HEREIN. SUCH RISKS AND
UNCERTAINTIES MAY BE ATTRIBUTABLE TO IMPORTANT FACTORS WHICH INCLUDE BUT ARE NOT
LIMITED TO THE FOLLOWING: PRODUCT MARGINS MAY VARY FROM THOSE PROJECTED; RAW
MATERIAL PRICES MAY VARY FROM THOSE ASSUMED; ADDITIONAL RESERVES MAY BE REQUIRED
FOR BAD DEBTS, RETURNS, ALLOWANCES, GOVERNMENTAL COMPLIANCE COSTS, OR
LITIGATION; THERE MAY BE CHANGES IN THE PERFORMANCE OF FINANCIAL MARKETS OR
FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES; UNANTICIPATED NATURAL DISASTERS
COULD HAVE A MATERIAL IMPACT UPON RESULTS OF OPERATIONS; THERE MAY BE CHANGES IN
THE GENERAL ECONOMIC CONDITIONS WHICH AFFECT CUSTOMER PAYMENT PRACTICES OR
CONSUMER SPENDING; COMPETITION FOR RETAIL AND WHOLESALE CUSTOMERS, PRICING AND
TRANSPORTATION OF PRODUCTS MAY VARY FROM TIME TO TIME DUE TO SEASONAL VARIATIONS
OR OTHERWISE; CUSTOMER PREFERENCES FOR OTHER COMPANIES' PRODUCTS CAN BE AFFECTED
BY COMPETITION, OR GENERAL MARKET DEMAND FOR DOMESTIC OR IMPORTED GOODS OR THE
QUANTITY, QUALITY, PRICE OR DELIVERY TIME OF SUCH GOODS; THERE COULD BE AN
UNANTICIPATED LOSS OF A MATERIAL CUSTOMER, OR A MATERIAL LICENSE; THE
AVAILABILITY AND PRICE OF RAW MATERIALS COULD BE AFFECTED BY WEATHER, DISEASE,
ENERGY COSTS OR OTHER FACTORS; EFFORTS TO AVOID ADVERSE EFFECTS DUE TO COMPUTER
SYSTEMS FAILING TO FUNCTION PROPERLY WITH RESPECT TO DATES IN THE YEAR 2000 AND
BEYOND COULD MEET WITH VARYING DEGREES OF SUCCESS IN OPERATIONS AND IN
TRANSACTIONS WITH CUSTOMERS, SUPPLIERS AND FINANCIAL INSTITUTIONS; AND THE
ABILITY TO PROJECT RISK FACTORS MAY VARY. IN ADDITION, CONSIDERATION SHOULD BE
GIVEN TO ANY OTHER RISKS AND UNCERTAINTIES DISCUSSED IN OTHER DOCUMENTS FILED BY
THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION. SEE "RISK
FACTORS--FORWARD-LOOKING STATEMENTS."
ALL WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY
ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS. THE
COMPANY DOES NOT INTEND TO UPDATE THESE CAUTIONARY STATEMENTS.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. The reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and should be available at the Commission's Regional
Offices at 7 World Trade Center, 13th Floor, New York, New York 10048, and 5000
West Madison Street, Suite 1400, Chicago, Illinois 60621 and at the offices of
the Nasdaq National Market, 1735 K Street, N.W., Washington, D.C. 20006. Copies
of such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Commission maintains a Web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
The Company has filed with the Commission a Registration Statement on Form
S-4 (the "Exchange Offer Registration Statement," which term shall encompass all
amendments, exhibits, annexes and schedules thereto) pursuant to the Securities
Act, and the rules and regulations promulgated thereunder, covering the Exchange
Securities being offered hereby. This Prospectus does not contain all the
information set forth in the Exchange Offer Registration Statement. For further
information with respect to the Company and the Exchange Offer, reference is
made to the Exchange Offer Registration Statement. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to herein are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Exchange Offer
Registration Statement, reference is made to such exhibits for a more complete
description of the document or matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.
iii
<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents (and the amendments thereto) have been filed by the
Company (File No. 0-21496) and are incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 1997 (the "Form 10-K");
(ii) The Company's Quarterly Report on Form 10-Q for its fiscal
quarter ended March 31, 1998; and
(iii) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10 filed with the Commission
pursuant to Section 12 of the Exchange Act on July 1, 1993, and the
Amendment to the Registration Statement on Form 10/A filed on June 2, 1994,
including any other amendment or report filed for the purpose of updating
such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference in this Prospectus shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
incorporated herein or in any other subsequently filed document that also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus. Subject
to the foregoing, all information appearing in this Prospectus is qualified in
its entirety by the information appearing in the documents incorporated by
reference herein.
Copies of all documents incorporated by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents), will be provided without charge to each person, including
any beneficial owner to whom a copy of this Prospectus has been delivered upon
the written or oral request of such person. Requests for such copies should be
directed to WestPoint Stevens Inc., 507 West Tenth Street, West Point, Georgia
31833, Attention: Secretary, telephone: (706) 645-4000.
iv
<PAGE> 7
SUMMARY
The following is a summary of certain information contained elsewhere in
this Prospectus and is qualified by the more detailed information set forth
elsewhere in or incorporated by reference to this Prospectus, which should be
read in its entirety. Unless otherwise indicated, capitalized terms used in this
Prospectus Summary have the respective meanings ascribed to them elsewhere in
this Prospectus. The information contained in this Prospectus contains
forward-looking statements which involve known and unknown risks, uncertainties
and other factors that may cause the actual results, performance or achievements
of the Company to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. See
"Cautionary Note Regarding Forward-Looking Statements" on page iii.
THE COMPANY
OVERVIEW
The Company is the nation's leading manufacturer and marketer of bed and
bath home fashions ("Home Fashions") products. Management believes that the
Company is the low-cost producer in the Home Fashions industry in the United
States and that it is able to achieve significantly higher operating margins
than its competitors as a result of its strong consumer marketing programs,
well-known brand names, low-cost production, sophisticated distribution systems
and strong customer relationships.
The Company is the largest producer in the domestic sheet and pillowcase
markets and shares leadership in the domestic bath towel market. The Company has
positioned itself as a single-source supplier to retailers of bed and bath
products, offering a broad assortment of products across multiple price points.
The breadth of the Company's products and price points allows it to provide a
comprehensive product offering for each major distribution channel, including
chain and department stores, mass merchants and specialty bed and bath stores.
The Company's products include decorative sheets and towels, designer sheets and
accessories, institutional sheets and towels, blankets, private label sheets and
towels, bedskirts, bedspreads, comforters, duvet covers, drapes, valances, throw
pillows, shower curtains and table covers in a variety of fabrics and a wide
assortment of colors and patterns.
The Company markets its products under well-known and long-established
trademarks, brand names and private labels, which it uses as merchandising tools
to assist its customers in coordinating their product offerings and
differentiating their products from those of their competitors. The Company, for
example, is one of the major suppliers of the Martha Stewart bed and bath
product collection sold at Kmart stores nationwide. The Company's trademarks
include ATELIER MARTEX(R), MARTEX(R), UTICA(R), STEVENS(R), LADY PEPPERELL(R)
and VELLUX(R). In addition, the Company manufactures and sells certain products
pursuant to licensing agreements under designer names that include, among
others, Ralph Lauren Home Collection, Sanderson, Star Wars, Designers Guild and
Esprit.
BUSINESS STRATEGY
The Company's business strategy is to strengthen its leadership in the Home
Fashions market by increasing brand name awareness, remaining the low-cost
producer in the industry, leveraging technology to provide superior customer
service, developing innovative products, entering into new business lines and
expanding its international presence.
Increasing Brand Name Awareness -- The Company's marketing programs are
increasingly important in creating sales and profit growth. The Company's
overall advertising strategy is to maintain the strong brand image of all of its
lines, while highlighting innovative products and important line extensions. The
Company targets specific market segments through national consumer magazines and
retailer catalogs, and over the past three years has significantly raised its
investment in consumer advertising. The MARTEX(R) campaign, for example,
unveiled in 1995 and entitled "The Bare Necessities," set a new standard for the
industry. This successful campaign generated more than 200 million impressions
via consumer magazines, sharply increased
1
<PAGE> 8
consumer brand recognition of MARTEX(R) and received numerous advertising and
industry awards, including the Gold Medallion award from the American Marketing
Effectiveness Council.
Remaining the Low-Cost Producer -- Over the past five years, the Company
has made approximately $522 million of capital expenditures and intends to
invest an additional $145 million in 1998 to further modernize and expand its
facilities. Management believes that this capital spending program has firmly
established the Company as the industry's low-cost producer, enabling it to
provide quality products at attractive price points. The capital expenditures
have been used to, among other things, replace older looms with wider, faster,
more efficient air jet looms, replace ring spinning with open-end and air jet
spinning, modernize with high speed dyeing, printing and finishing equipment,
and further automate the Company's cut and sew operations. In addition, the
Company's digital rendering technology takes computer assisted design (CAD)
product designs and digitally transforms them, thereby eliminating many steps in
traditional product development, and further converts the product designs into
room settings.
Leveraging Technology to Provide Superior Customer Service -- The Company
is committed to developing and maintaining integral relationships with its
customers through "Strategic Partnering," a program designed to improve
customers' operating results by leveraging the Company's merchandising,
manufacturing and inventory management systems. The Company uses Electronic Data
Interchange ("EDI"), "Quick Response" and "Vendor Managed Inventory"
replenishment programs and point-of-sale data to assist its customers' inventory
management. New systems connect the Company's sales, merchandising,
manufacturing and administrative operations, permitting customers to place
orders and allowing the Company to fill, track and bill orders electronically
with its customers. In addition, the Company employs the latest available retail
warehouse and shelf space management technology to minimize inventory and
maximize floor stock turnover for its customers.
Developing Innovative Products -- The Company is a leader in the industry
in product innovation. The Company, for example, created the wrinkle-free cotton
sheet category, in which it maintains the leading market share. The Company also
created the VELLUX(R) blanket, for which it is the only worldwide supplier, and
was the first domestic manufacturer to supply Jacquard sheeting to the Home
Fashions industry. In addition to offering important growth opportunities,
innovative new products provide value to consumers, increase sales and margins
for retail customers, and enhance profitability for the Company. To consumers
seeking finer fashion products in the luxury category, ATELIER MARTEX(R), the
Company's premium luxury brand, continues to enjoy favorable consumer acceptance
following rapid growth in 1995 and 1996. The innovations from this line, which
include the introduction of unique styling techniques, have now been introduced
in other Company brands and private label programs.
Entering into New Business Lines -- The Company continues to identify new
attractive business lines and has recently expanded its infant bedding and
independent soft window treatment segments. For example, the Company has
recently introduced a BABY MARTEX(TM) line of infant bedding, including sheets,
blankets and bumper pads. The Company anticipates continued growth from these
categories as it applies its product innovation, manufacturing and marketing
expertise.
Expanding its International Presence -- The Company distributes its
products internationally with emphasis on the Canadian and European markets. In
January 1997, the Company acquired P.J. Flower & Co. Limited, a British company
that manufactures, markets and distributes bed and bath linens and related home
furnishings products in Europe. P.J. Flower & Co. Limited, which was recently
renamed WestPoint Stevens (Europe) Limited, has recently added licensed products
to its core offerings, including the Ralph Lauren Home Collection in the Western
European market and Designers Guild in international markets. The Company's
strategy is to increase its penetration of international markets.
The Company is a Delaware corporation with its principal executive offices
located at 507 West Tenth Street, West Point, Georgia 31833. The Company's
telephone number at such address is (706) 645-4000.
2
<PAGE> 9
THE FINANCING TRANSACTIONS
The issuance of the Old Securities was part of a series of financing
transactions (the "Financing Transactions") pursuant to which the Company
intends to reduce interest expense, extend debt maturities and improve financial
flexibility. The components of the Financing Transactions are the consummation
of (i) the issuance of the Old Securities, (ii) the purchase (the "Tender
Offers") of the Company's outstanding 8 3/4% Senior Notes due 2001 (the "8 3/4%
Senior Notes") and the outstanding 9 3/8% Senior Subordinated Debentures due
2005 (the "9 3/8% Senior Subordinated Debentures"), (iii) the redemption (the
"Redemption") of the Company's 9% Sinking Fund Debentures due 2017 and (iv) the
refinancing (the "Refinancing") of the Company's Senior Credit Facility with an
amended and restated $550 million secured revolving Credit Facility (the "Senior
Credit Facility"). The issuance of the Old Securities, the Refinancing and the
Tender Offers were consummated on June 9, 1998. The Redemption was consummated
on July 9, 1998.
3
<PAGE> 10
THE INITIAL OFFERING
The Initial Offering....... The Old Securities were sold by the Company on June
9, 1998 (the "Initial Offering") to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Goldman, Sachs
& Co., NationsBanc Montgomery Securities LLC, BNY
Capital Markets, Inc., First Chicago Capital
Markets, Inc. and Scotia Capital Markets
(collectively the "Initial Purchasers") pursuant to
a Purchase Agreement dated June 3, 1998 (the
"Purchase Agreement"). The Initial Purchasers
subsequently resold all of the Old Securities to
qualified institutional buyers in reliance on Rule
144A under the Securities Act or to Non-U.S.
persons in offshore transactions in reliance on
Regulation S under the Securities Act.
Registration Rights
Agreement................ Pursuant to the Purchase Agreement, the Company and
the Initial Purchasers entered into Registration
Rights Agreements dated as of June 9, 1998 (the
"Registration Rights Agreements"), which grant the
holders of the Old Securities certain exchange and
registration rights. The Exchange Offer is intended
to satisfy such exchange and registration rights
which terminate upon the consummation of the
Exchange Offer.
THE EXCHANGE OFFER
Securities Offered......... $525,000,000 aggregate principal amount of 7 7/8%
Senior Notes due 2005 of the Company (the "Senior
Notes due 2005") and $475,000,000 aggregate
principal amount of 7 7/8% Senior Notes due 2008 of
the Company (the "Senior Notes due 2008 and
together with the Senior Notes due 2005, the
"Exchange Securities").
The Exchange Offer......... The Company is offering to exchange (i) $1,000
principal amount of Senior Notes due 2005 for each
$1,000 principal amount of Old Senior Notes due
2005 and (ii) $1,000 principal amount of Senior
Notes due 2008 for each $1,000 principal amount of
Old Senior Notes due 2008, that are properly
tendered and accepted. As of the date hereof,
$1,000,000,000 aggregate principal amount of Old
Securities are outstanding. The Company will issue
the Exchange Securities to holders on or promptly
after the Expiration Date.
Based on an interpretation by the staff of the
Commission set forth in no-action letters issued to
third parties, the Company believes that Exchange
Securities issued pursuant to the Exchange Offer in
exchange for Old Securities may be offered for
resale, resold and otherwise transferred by any
holder thereof (other than any such holder which is
an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act) without
compliance with the registration and prospectus
delivery provisions of the Securities Act;
provided, that such Exchange Securities are
acquired in the ordinary course of such holder's
business and that such holder does not intend to
participate and has no arrangement or understanding
with any person to participate in the distribution
of such Exchange Securities.
Any Participating Broker-Dealer that acquired Old
Securities for its own account as a result of
market-making activities or other trading
activities may be a statutory underwriter. Each
Participating Broker-Dealer that receives Exchange
Securities for its own account pursuant to the
Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale
of such Exchange Securities. The Letter of
4
<PAGE> 11
Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating
Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be
amended or supplemented from time to time, may be
used by a Participating Broker-Dealer in connection
with resales of Exchange Securities received in
exchange for Old Securities where such Old
Securities were acquired by such Participating
Broker-Dealer as a result of market-making
activities or other trading activities. The Company
has agreed that, for a period of 180 days after the
Expiration Date, it will make this Prospectus
available to any Participating Broker-Dealer for
use in connection with any such resale. See "Plan
of Distribution."
Any holder who tenders in the Exchange Offer with
the intention to participate, or for the purpose of
participating, in a distribution of the Exchange
Securities cannot rely on the position of the staff
of the Commission enunciated in no-action letters
and, in the absence of an exemption therefrom, must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any resale transaction. Failure to
comply with such requirements in such instance may
result in such holder incurring liability under the
Securities Act for which the holder is not
indemnified by the Company.
Expiration Date............ 5:00 p.m., New York City time, on ,
1998 unless the Exchange Offer is extended, in
which case the term "Expiration Date" means the
latest date and time to which the Exchange Offer is
extended.
Accrued Interest on the
Exchange Securities and
the Old Securities....... Each Exchange Security will bear interest from its
issuance date. Holders of Old Securities that are
accepted for exchange will receive, in cash,
accrued interest thereon to, but not including, the
issuance date of the Exchange Securities. Such
interest will be paid with the first interest
payment on the Exchange Securities. Interest on the
Old Securities accepted for exchange will cease to
accrue upon issuance of the Exchange Securities.
Conditions to the Exchange
Offer.................... The Exchange Offer is subject to certain customary
conditions, which may be waived by the Company. See
"The Exchange Offer -- Conditions."
Procedures for Tendering
Old Securities........... Each holder of Old Securities wishing to accept the
Exchange Offer must complete, sign and date the
accompanying Letter of Transmittal, or a facsimile
thereof (or, in the case of a book-entry transfer,
transmit an Agent's Message (as defined) in lieu
thereof), in accordance with the instructions
contained herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile (or Agent's message), together with the
Old Securities and any other required documentation
to the Exchange Agent (as defined) at the address
set forth herein. By executing the Letter of
Transmittal (or transmitting an Agent's Message),
each holder will represent to the Company that,
among other things, the Exchange Securities
acquired pursuant to the Exchange Offer are being
obtained in the ordinary course of business of the
person receiving such Exchange Securities, whether
or not such person is the holder, that neither the
holder nor any such other person has any
5
<PAGE> 12
arrangement or understanding with any person to
participate in the distribution of such Exchange
Securities and that neither the holder nor any such
other person is an "affiliate," as defined under
Rule 405 of the Securities Act, of the Company. See
"The Exchange Offer -- Purpose and Effect of the
Exchange Offer" and "-- Procedures for Tendering."
Untendered Old
Securities............... Following the consummation of the Exchange Offer,
holders of Old Securities eligible to participate
but who do not tender their Old Securities will not
have any further exchange or registration rights
and such Old Securities will continue to be subject
to certain restrictions on transfer. Accordingly,
the liquidity of the market for such Old Securities
could be adversely affected. See "Risk
Factors -- Lack of Public Market; Volatility;
Restrictions on Resale."
Consequences of Failure to
Exchange................. The Old Securities that are not exchanged pursuant
to the Exchange Offer will remain restricted
securities. Accordingly, such Old Securities may be
resold only (i) to the Company, (ii) pursuant to
Rule 144A or Rule 144 under the Securities Act or
pursuant to some other exemption under the
Securities Act, (iii) outside the United States to
a foreign person pursuant to the requirements of
Rule 904 under the Securities Act, or (iv) pursuant
to an effective registration statement under the
Securities Act. See "The Exchange
Offer -- Consequences of Failure to Exchange."
Shelf Registration
Statement................ If any holder of the Old Securities (other than any
such holder which is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities
Act) is not eligible under applicable securities
laws to participate in the Exchange Offer, and such
holder has satisfied certain conditions relating to
the provision of information to the Company for use
therein, the Company has agreed to register the Old
Securities on a shelf registration statement (the
"Shelf Registration Statement") and to use its best
efforts to cause it to be declared effective by the
Commission as promptly as practical on or after the
consummation of the Exchange Offer. The Company has
agreed to maintain the effectiveness of the Shelf
Registration Statement for, under certain
circumstances, a maximum of two years, to cover
resales of the Old Securities held by any such
holders.
Special Procedures for
Beneficial Owners........ Any beneficial owner whose Old Securities are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and
who wishes to tender should contact such registered
holder promptly and instruct such registered holder
to tender on such beneficial owner's behalf. If
such beneficial owner wishes to tender on such
owner's own behalf, such owner must, prior to
completing and executing the Letter of Transmittal
and delivering its Old Securities, either make
appropriate arrangements to register ownership of
the Old Securities in such owner's name or obtain a
properly completed bond power from the registered
holder. The transfer of registered ownership may
take considerable time.
Guaranteed Delivery
Procedures............... Holders of Old Securities who wish to tender their
Old Securities and whose Old Securities are not
immediately available or who cannot deliver their
Old Securities (or comply with the procedures for
book-entry transfer), the Letter of Transmittal or
any other documents required by the Letter of
Transmittal to the Exchange Agent (or
6
<PAGE> 13
transmit an Agent's message in lieu thereof) prior
to the Expiration Date must tender their Old
Securities according to the guaranteed delivery
procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures."
Withdrawal Rights.......... Tenders may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date.
Acceptance of Old
Securities and Delivery
of Exchange Securities... The Company will accept for exchange any and all
Old Securities which are properly tendered in the
Exchange Offer prior to 5:00 p.m., New York City
time, on the Expiration Date. The Exchange
Securities issued pursuant to the Exchange Offer
will be delivered promptly following the Expiration
Date. See "The Exchange Offer -- Terms of the
Exchange Offer."
Certain U.S. Federal Income
Tax Considerations....... For a discussion of material U.S. federal income
tax considerations relating to the exchange of the
Exchange Securities for the Old Securities, see
"Certain U.S. Federal Income Tax Considerations."
Use of Proceeds............ There will be no cash proceeds to the Company from
the issuance of the Exchange Securities pursuant to
the Exchange Offer. See "Use of Proceeds."
Exchange Agent............. The Exchange Agent is The Bank of New York. The
address and telephone and facsimile numbers of the
Exchange Agent are set forth under "The Exchange
Offer -- Exchange Agent" and in the Letter of
Transmittal.
7
<PAGE> 14
SUMMARY OF THE TERMS OF THE SECURITIES
The Exchange Offer applies to the Old Securities. The form and terms of the
Exchange Securities are identical in all material respects to the form and terms
of the Old Securities, except that (i) the Exchange Securities will have been
registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof and (ii) holders of the Exchange Securities
will not be entitled to certain rights of holders of Old Securities under the
Registration Rights Agreements, which rights will terminate upon consummation of
the Exchange Offer. The Exchange Securities will evidence the same debt as the
Old Securities (which they replace) and will be issued under and be entitled to
the benefits of the Indenture. For further information and for definitions of
certain capitalized terms used below, see "Description of the Securities."
Securities Offered......... $525,000,000 aggregate principal amount of 7 7/8%
Senior Notes due 2005 and $475,000,000 aggregate
principal amount of 7 7/8% Senior Notes due 2008
(together, the "Securities").
Maturity Date.............. June 15, 2005 and June 15, 2008, respectively.
Interest Payment Dates..... June 15 and December 15, commencing December 15,
1998.
Ranking.................... The Securities will rank pari passu in right of
payment with all existing or future unsecured and
unsubordinated indebtedness of the Company and
senior in right of payment to all subordinated
indebtedness of the Company. The Securities will
rank pari passu in right of payment with each
other. As of March 31, 1998, pro forma for the
Financing Transactions and the application of the
proceeds therefrom, the Company would have had
$343.8 million of secured indebtedness outstanding
and the claims of holders of the Securities would
have been structurally subordinated to $62.2
million of indebtedness and other liabilities of
the Company's subsidiaries. See "Description of the
Securities."
Optional Redemption........ The Securities will be redeemable, in whole or in
part, at any time at the option of the Company at
100% of the principal amount thereof plus the
Make-Whole Premium plus accrued and unpaid
interest, if any, to the date of purchase.
"Description of the Securities -- Optional
Redemption."
Change of Control
Triggering Event......... Following the occurrence of a Change of Control
Triggering Event, the Company will be required to
make an offer to purchase the Securities at a price
equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of
purchase. See "Description of the
Securities -- Change of Control Triggering Event."
Certain Covenants.......... The indentures under which the Securities were
issued (the "Indentures") limit (i) the incurrence
of additional indebtedness by the Company and the
Restricted Subsidiaries, (ii) consolidations,
mergers and transfers of all or substantially all
of the Company's and the Restricted Subsidiaries'
assets, (iii) the ability of the Company and the
Restricted Subsidiaries to incur liens, (iv) the
designation of certain subsidiaries as Unrestricted
Subsidiaries and (v) the entry of the Company and
the Restricted Subsidiaries into certain sale and
leaseback transactions. These covenants are subject
to certain exceptions and qualifications. See
"Description of the Securities."
Each of the Indentures provides that, so long as no
Default has occurred and is continuing after the
Securities have been assigned Investment Grade
Ratings (as defined herein) by any two of the
Ratings Agencies (as defined herein) and
notwithstanding that the Securities may thereafter
cease to be of Investment Grade Ratings, the
Company
8
<PAGE> 15
will be released from its obligations to comply
with certain of the covenants and provisions
described therein. See "Description of the
Securities -- Certain Covenants."
RISK FACTORS
See "Risk Factors" on page 12 for a discussion of certain factors which
should be considered before tendering Old Securities in exchange for Exchange
Securities. The risk factors are generally applicable to the Old Securities as
well as the Exchange Securities.
9
<PAGE> 16
SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA
The summary historical financial data presented below for each year in the
five year period ended December 31, 1997 were derived from the audited
Consolidated Financial Statements of the Company and its subsidiaries, and
should be read in conjunction therewith, including the notes thereto and other
information contained herein. The summary historical financial data presented
below for the three months ended March 31, 1998 and March 31, 1997 were derived
from the Condensed Consolidated Financial Statements (Unaudited) of the Company
and its subsidiaries, and should be read in conjunction therewith, including the
notes thereto and other information contained herein.
The pro forma unaudited interest expense data gives effect to the Financing
Transactions as if such transactions had been consummated on April 1, 1997. The
as adjusted balance sheet as of March 31, 1998 gives effect to the Financing
Transactions as if they occurred on March 31, 1998. The pro forma unaudited
consolidated financial data do not purport to represent what the Company's
actual financial position and results of operations would have been had such
events occurred on the aforementioned dates and should not serve as a forecast
of the Company's financial position and results of operations for any future
periods. The pro forma adjustments are based upon currently available
information and upon certain assumptions that management believes are reasonable
under the circumstances. These pro forma unaudited consolidated financial data
should be read in conjunction with the Company's Consolidated Financial
Statements, Condensed Consolidated Financial Statements and the notes thereto
included elsewhere herein.
The summary financial data should be read in conjunction with "The
Financing Transactions," "Capitalization," "Selected Historical Consolidated
Financial Data" and "Management's Discussion and Analysis of Financial
Conditions and Results of Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------------------------- -----------------------------------------------
1998 1997 1997 1996 1995 1994 1993(1)
------------ ------------ ------- ------- ------- ------- -------
(UNAUDITED)
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................ $ 398.7 $ 357.1 $1,657.5 $1,501.8 $1,418.2 $1,346.9 $1,267.5
Cost of goods sold................... 299.2 267.9 1,237.7 1,129.4 1,059.1 1,015.0 945.9
------------ ------------ ------- ------- ------- ------- -------
Gross earnings....................... 99.5 89.2 419.8 372.4 359.1 331.9 321.6
Selling, general and administrative
expenses........................... 55.1 50.7 204.9 183.9 180.4 175.1 170.7
Restructuring expense................ -- -- -- -- -- -- 178.0
Amortization of excess reorganization
value.............................. -- -- -- -- 152.4 203.3 190.2
------------ ------------ ------- ------- ------- ------- -------
Operating earnings(2)................ 44.4 38.5 214.9 188.5 26.3 (46.5) (217.3)
Interest expense..................... 25.7 23.4 102.2 94.5 93.5 94.2 90.4
Other expense-net.................... 0.4 0.8 2.5 3.0 3.2 13.0 18.2(3)
------------ ------------ ------- ------- ------- ------- -------
Income (loss) from continuing
operations before income tax
expense (benefit) and extraordinary
items.............................. 18.3 14.3 110.2 91.0 (70.4) (153.7) (325.9)
Income tax expense (benefit)......... 6.6 5.3 40.9 33.0 31.9 20.0 (44.1)
------------ ------------ ------- ------- ------- ------- -------
Net income (loss) from continuing
operations before extraordinary
items.............................. $ 11.7 $ 9.0 $ 69.3 $ 58.0 $(102.3) $(173.7) $(281.8)
============ ============ ======= ======= ======= ======= =======
OTHER FINANCIAL DATA:(4)
EBITDA(5)............................ $ 64.8 $ 56.3 $ 286.6 $ 257.4 $ 248.0 $ 231.0 $ 222.1
EBITDA margin(6)..................... 16.2% 15.8% 17.3% 17.1% 17.5% 17.2% 17.5%
Depreciation and other
amortization(7).................... $ 20.4 $ 17.8 $ 71.7 $ 68.9 $ 69.3 $ 74.2 $ 71.2
Capital expenditures(8).............. 19.4 44.8 159.6 95.3 93.5 92.4 80.7
</TABLE>
10
<PAGE> 17
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED
MARCH 31,
1998
----------------------------
(IN MILLIONS, EXCEPT RATIOS)
<S> <C>
PRO FORMA FINANCIAL DATA:(4)
EBITDA(5)................................................... $295.1
Interest expense(9)......................................... 98.0
Ratio of earnings to fixed charges(10)...................... 2.1x
Ratio of EBITDA to interest expense......................... 3.0x
Ratio of total debt to EBITDA............................... 4.6x
</TABLE>
<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
-----------------------
AS
ACTUAL ADJUSTED
-------- --------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital............................................. $ 200.2 $ 248.6
Total assets................................................ 1,316.4 1,321.4
Total debt.................................................. 1,234.0 1,343.8
Total stockholders' equity (deficit)........................ (437.9) (488.5)
</TABLE>
- ---------------
(1) The results for the year ended December 31, 1993 include restructuring
expense of $178.0 million pretax. The charge related to (i) the closing and
consolidation of certain facilities; (ii) the write-off of certain
equipment; and (iii) severance, outplacement and other costs associated
with plant closures and overhead reductions.
(2) Operating earnings (loss) for the year ended December 31, 1995 includes
amortization of excess reorganization value of $152.4 million, for the year
ended December 31, 1994 includes amortization of excess reorganization
value of $203.3 million and for the year ended December 31, 1993 includes
restructuring expense of $178.0 million and amortization of excess
reorganization value of $190.2 million.
(3) Includes minority interest in loss of consolidated subsidiary of $10.5
million.
(4) Includes financial data for continuing operations only, unless otherwise
disclosed.
(5) EBITDA represents operating earnings (loss) plus the sum of depreciation,
amortization of excess reorganization value, goodwill amortization and
restructuring expense. EBITDA and the EBITDA ratios are not measures of
performance or financial condition under generally accepted accounting
principles, but are presented to provide additional information related to
debt service capability. EBITDA should not be considered in isolation or as
a substitute for other measures of financial performance or liquidity under
generally accepted accounting principles.
(6) EBITDA margin represents EBITDA as a percentage of net sales for the
periods presented.
(7) Excludes amortization of excess reorganization value.
(8) Includes (i) continuing operations capital expenditures for the three
months ended March 31, 1998 and 1997 of $19.4 million and $34.4 million,
respectively, and for the years ended December 31, 1997, 1996, 1995, 1994
and 1993 of $148.9 million, $94.9 million, $92.4 million, $84.5 million and
$76.9 million, respectively, (ii) capital expenditures for the Whitmire
facility before its transfer to continuing operations from discontinued
operations, for the three months ended March 31, 1997 of $0.3 million and
for the years ended December 31, 1997, 1996, 1995, 1994 and 1993 of $0.6
million, $0.4 million, $1.1 million, $7.9 million and $3.8 million,
respectively, and (iii) the amount allocated to property, plant and
equipment related to the purchase of towel manufacturing facilities from
the Bibb Company for the three months ended March 31, 1997 and for the year
ended December 31, 1997 of $10.1 million and $10.1 million, respectively.
(9) The pro forma interest expense for the twelve months ended March 31, 1998
reflects a reduction of interest expense of approximately $6.5 million
reflecting the Financing Transactions as if they occurred on April 1, 1997.
The Company's amortization of debt issuance costs, which are included in
other expense -- net will also be reduced approximately $1.3 million
annually after the Financing Transactions are consummated.
(10) For purposes of this ratio, "earnings" consist of earnings before income
taxes and fixed charges, and "fixed charges" consist of interest expense
and the portion of rents representative of an interest factor. The ratio of
earnings to fixed charges is computed by adding earnings before income
taxes and fixed charges and dividing by fixed charges.
11
<PAGE> 18
RISK FACTORS
In addition to the other information contained or incorporated by reference
in this Prospectus, the following factors should be carefully considered before
tendering Old Securities in exchange for Exchange Securities. The risk factors
set forth below are generally applicable to the Old Securities as well as the
Exchange Securities.
SUBSTANTIAL LEVERAGE
The Company is, and after the consummation of the Financing Transactions
will continue to be, highly leveraged. After giving effect to the Financing
Transactions, including the issuance of the Old Securities and the use of
proceeds therefrom, the Company will have total pro forma indebtedness of
approximately $1,343.8 million and a ratio of total pro forma indebtedness to
total pro forma capitalization of 1.6:1 at March 31, 1998 (as if the Financing
Transactions and such use of proceeds had occurred on such date).
The Company currently has incurred, and after the consummation of the
Financing Transactions will continue to incur, significant annual cash interest
expense in connection with its obligations under its long-term indebtedness. On
a pro forma basis, after giving effect to the Financing Transactions, the ratio
of earnings to fixed charges for the three and twelve months ended March 31,
1998 would have been 1.7:1 and 2.1:1, respectively. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."
The degree to which the Company is leveraged could have important
consequences to holders of the Securities, including, but not limited to, the
following: (i) the Company's ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions, general
corporate purposes or other purposes will be restricted; (ii) a significant
portion of the Company's cash flow from operations must be dedicated to the
payment of principal and interest on its indebtedness, thereby reducing the
funds available to the Company for its operations; (iii) certain of the
Company's borrowings are and will continue to be at variable rates of interest,
which could result in higher interest expense in the event of an increase in
interest rates; and (iv) such indebtedness contains financial and restrictive
covenants, the failure to comply with which may result in an event of default
which, if not cured or waived, could have a material adverse effect on the
Company. See "Description of Certain Other Indebtedness."
The degree to which the Company is leveraged could also affect its ability
to compete effectively and could limit its business opportunities. If the
Company's cash flow and capital resources are insufficient to fund its debt
service obligations, the Company may be forced to reduce or delay capital
expenditures, sell assets or seek to obtain additional equity capital or to
refinance or restructure its indebtedness. There can be no assurance that the
Company's cash flow and capital resources will be sufficient for payment of
principal of, and premiums, if any, and interest on its indebtedness in the
future, or that any such alternative measures would be successful or would
permit the Company to meet its debt service obligations.
RESTRICTIVE COVENANTS
The Company's Senior Credit Facility contains a number of covenants that
impose certain operating and financial restrictions on the Company and its
subsidiaries, including, without limitation, limitations on indebtedness, liens,
guarantees and restricted payments. In addition, the Company is required under
its Senior Credit Facility to maintain financial ratios and levels with respect
to a minimum consolidated net worth (as defined in the Senior Credit Facility),
a current ratio and a ratio of EBITDA (as defined in the Senior Credit Facility)
to interest expense. There can be no assurance that the Company will be able to
comply with such covenants or restrictions in the future. The Company's ability
to comply with such covenants and other restrictions may be affected by events
beyond its control, including prevailing economic, financial and industry
conditions. The breach of any such covenant or restriction could result in a
default under the Senior Credit Facility that would permit the lenders
thereunder to declare all amounts outstanding thereunder to be immediately due
and payable, together with accrued and unpaid interest. See "Description of
Certain Other Indebtedness."
12
<PAGE> 19
RANKING; ASSET ENCUMBRANCES
The Securities rank pari passu in right of payment with all existing and
future unsecured and unsubordinated indebtedness and senior in right of payment
to all indebtedness of the Company subordinated to the Securities by their
terms. The Securities rank pari passu in right of payment with each other. As of
March 31, 1998 pro forma for the Financing Transactions, the Company would have
had $343.8 million of secured indebtedness outstanding and the claims of holders
of the Securities would have been structurally subordinated to $62.2 million of
indebtedness and other liabilities of the Company's subsidiaries. Assuming
consummation of the Financing Transactions as of March 31, 1998, the Company's
outstanding borrowings under the Senior Credit Facility would have been
approximately $343.8 million, and the Company would have had approximately
$180.6 million available for borrowing under the revolving credit facility
thereunder. The obligations under the Senior Credit Facility are secured by
substantially all of the assets of the Company. In the event of a bankruptcy,
liquidation or reorganization of the Company or any default in the payment of
any indebtedness under the Senior Credit Facility or other secured indebtedness,
holders of such secured indebtedness will be entitled to payment in full from
the proceeds of all assets of the Company pledged to secure such indebtedness
prior to any payment of such proceeds to holders of Securities. Consequently,
there can be no assurance that the Company will have sufficient funds to make
payments to holders of Securities. See "Description of Certain Other
Indebtedness" and "Description of the Securities."
Direct creditors of a subsidiary of the Company, although not holders of
Senior Indebtedness (as defined) of the Company, will have a direct claim on the
assets of such subsidiary, prior to the claims of holders of the Securities.
Therefore, all existing and future liabilities (if any) of the Company's
subsidiaries will be effectively senior to the Securities. See "Description of
the Securities."
LOSSES AND ACCUMULATED DEFICIT
The Company emerged from bankruptcy in September 1992 and adopted "Fresh
Start" reporting. At March 31, 1998, the Company had an accumulated deficit of
$613.3 million primarily due to the amortization from 1992 to 1995 of excess
reorganization value of $656.4 million after minority interest, the loss on
extinguishment of debt of $80.7 million after income taxes and restructuring
expenses of $117.8 million after minority interest and income taxes in 1993. The
Company has reported net income in each quarter subsequent to the complete
amortization of excess reorganization value in the third quarter of 1995.
SEASONALITY AND CYCLICALITY
Traditionally, the Home Fashions industry has been seasonal, with peak
sales seasons in the summer and fall. In accordance with industry practice, the
Company increases its inventory levels during the first six months of the year
to meet customer demands for the summer and fall peak seasons. The Home Fashions
industry has also traditionally been cyclical, and the Company's performance may
be negatively affected by downturns in consumer spending.
RISK OF LOSS OF MATERIAL CUSTOMER OR LICENSE
The Company's products are sold to mass merchants, chain stores, department
stores, specialty stores and institutional buyers. The Company's six largest
customers accounted for approximately 52% of the net sales of the Company during
the fiscal year ended December 31, 1997. During 1997, sales to Dayton Hudson
Corporation (including its Target Stores and Mervyn's divisions) were 13% and
sales to Kmart Corporation were 10% of the net sales of the Company,
respectively. Although the Company has no reason to believe that it will lose
the business of any of its largest customers, a loss of any of its largest
accounts (or a material portion of any thereof) would have an adverse effect
upon the Company's business, which could be material. A portion of the Company's
sales are derived from licensed designer brands. The license agreements for the
Company's designer brands generally are for a term of two or three years; some
of the licenses are automatically renewable for additional periods, provided
that certain sales thresholds set forth in such license agreements are met. No
single license has accounted for more than 11% of the Company's total sales
volume during any of the past five fiscal years. The loss of a significant
license could have an adverse effect upon the
13
<PAGE> 20
Company's business, which could be material. The following are the expiration
dates for the licensing agreements discussed above: Ralph Lauren Home
Collection, December 31, 2000; Sanderson, March 31, 1999; Star Wars, September
30, 2001 and Esprit, December 31, 2000.
RAW MATERIALS
The principal raw materials used by the Company in the manufacture of its
products are cotton of various grades and staple lengths and polyester in staple
and filament form. Although the Company has been able to acquire sufficient
quantities of cotton for its operations in the past, any shortage in the cotton
supply by reason of weather, disease or other factors, or a significant increase
in the price of cotton, could adversely affect its operations. The price of
man-made fibers such as polyester is influenced by demand, manufacturing
capacity and costs, petroleum prices, cotton prices and the cost of polymers
used in producing man-made fibers. Any significant prolonged petrochemical
shortages could significantly affect the availability of man-made fibers and
cause a substantial increase in demand for cotton, resulting in decreased
availability and, possibly, increased price and could adversely affect the
Company's operations.
COMPETITION
The Home Fashions industry is highly competitive. The Company competes on
the basis of price, quality and customer service, among other factors. In the
sheet and towel markets, the Company competes primarily with Fieldcrest Cannon,
Inc., a wholly-owned subsidiary of Pillowtex Corporation, and Springs
Industries, Inc. In the other bedding and accessories markets, the Company
competes with many companies, some of which are smaller in size than the
Company. The Company does not believe that there is any significant foreign
competition with its current domestic operations. There can be no assurance,
however, that if such foreign competition develops the Company will effectively
compete. The Company's future success will depend to a significant extent upon
its ability to remain the low-cost producer and to remain competitive in the
areas of marketing, product development, price, quality, brand names,
manufacturing capabilities, distribution and order processing. There can be no
assurance that the Company will be able to compete effectively in any of these
areas; any failure to compete effectively could adversely affect its sales and,
accordingly, its operations.
ENVIRONMENTAL AND EMPLOYEE SAFETY AND HEALTH MATTERS
The Company is subject to various federal, state and local environmental
laws and regulations governing, among other things, the discharge, storage,
handling and disposal of a variety of hazardous and non-hazardous substances and
wastes used in or resulting from its operations and potential remediation
obligations thereunder. Certain of the Company's facilities (including certain
facilities no longer owned or utilized by the Company) have been cited or are
being investigated with respect to alleged violations of such laws and
regulations. The Company has also been named as a potentially responsible party
at several sites under the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, and similar state laws which impose strict,
and in certain circumstances joint and several, liability for response costs and
natural resource damages. The Company's operations also are governed by laws and
regulations relating to employee safety and health which, among other things,
establish exposure limitations for cotton dust, formaldehyde, asbestos and
noise, and regulate chemical and ergonomic hazards in the workplace. Although
the Company does not expect that compliance with any of such laws and
regulations will adversely affect its operations, there can be no assurance that
such regulatory requirements will not become more stringent in the future or
that it will not incur significant costs in the future to comply with such
requirements.
PRINCIPAL STOCKHOLDER
As of March 10, 1998, Holcombe T. Green, Jr., the Chairman of the Board and
Chief Executive Officer of the Company, beneficially owned 18,541,498 shares of
Common Stock (constituting approximately 30.2% of the outstanding Common Stock),
including 17,408,306 shares held directly by WPS Investors L.P., of which HTG
Corp., a company owned by Mr. Green, is general partner. As a result of his
beneficial ownership of Common Stock and his positions with the Company, Mr.
Green will continue to be able to have significant influence on the Company and
on matters subject to vote by the Company's stockholders.
14
<PAGE> 21
TRADE RECEIVABLES PROGRAM
Substantially all of the accounts receivable of the Company are transferred
by the Company to the Receivables Subsidiary (as defined) pursuant to the Trade
Receivables Program (as defined). The Receivables Subsidiary then transfers some
or all of the accounts receivable to a trust, which issues certificates
representing beneficial interests in the accounts receivable. Such certificates
are sold to third party investors. The Receivables Subsidiary retains an
interest in the equity of the trust. However, the Trade Receivables Program is
structured in such a manner that the Receivables Subsidiary generally bears all
losses on the accounts receivable prior to any losses being borne by investors
in the Trade Receivables Program. The Company makes certain representations and
warranties to the Receivables Subsidiary and the Receivables Subsidiary makes
certain representations and warranties to the trust, in each case, as to the
nature and characteristics of the accounts receivable being transferred, but no
representations and warranties are made as to the ultimate collectibility of
such accounts receivable. The Company does not otherwise guarantee or insure the
Receivables Subsidiary or the trust against any losses with respect to the
accounts receivable. The Company's accounts receivable generally will not secure
the Senior Credit Facility or be directly available to satisfy the obligations
of the Company until all obligations of the Receivables Subsidiary under any
Trade Receivables Facility (as defined) to which it is a party are satisfied in
full. Thereafter, the Company's accounts receivable will secure the Senior
Credit Facility or may be used to obtain additional financing as permitted by
clause (i) under "Description of the Securities -- Certain
Covenants -- Limitations on Additional Indebtedness." See "Description of
Certain Other Indebtedness."
ABSENCE OF PUBLIC MARKET COULD ADVERSELY AFFECT THE VALUE OF EXCHANGE SECURITIES
The Old Securities were issued to, and the Company believes are currently
owned by, a relatively small number of beneficial owners. Prior to the Exchange
Offer, there has not been any public market for the Old Securities. The Old
Securities have not been registered under the Securities Act and will be subject
to restrictions on transferability to the extent that they are not exchanged for
Exchange Securities by holders who are entitled to participate in the Exchange
Offer. The market for Old Securities not tendered for exchange in the Exchange
Offer is likely to be more limited than the existing market for such Securities.
The holders of Old Securities (other than any such holder that is an "affiliate"
of the Company within the meaning of Rule 405 under the Securities Act) who are
not eligible to participate in the Exchange Offer are entitled to certain
registration rights, and the Company is required to file a Shelf Registration
Statement (as defined) with respect to such Old Securities and to use its best
efforts to cause it to be declared effective by the Commission as promptly as
practicable on or after the consummation of the Exchange Offer. The Exchange
Securities will constitute a new issue of securities with no established trading
market. There can be no assurance regarding the future development of a market
for the Exchange Securities, or the ability of holders of the Exchange
Securities to sell their Exchange Securities or the price at which such holders
might be able to sell their Exchange Securities. If such a market were to
develop, the Exchange Securities could trade at prices that may be higher or
lower than their principal amount, depending on many factors, including
prevailing interest rates, the Company's operating results and the market for
similar securities. The Company does not intend to list the Exchange Securities
on any national securities exchange or seek the admission thereof to trading in
the National Association of Securities Dealers Automated Quotation System. The
Initial Purchasers have advised the Company that they currently intend to make a
market in the Exchange Securities, but they are not obligated to do so and may
discontinue such market making at any time. In addition, such market making
activity will be subject to the limits imposed by the Securities Act and the
Exchange Act and may be limited during the Exchange Offer and the pendency of
the Shelf Registration Statement. Accordingly, no assurance can be given that an
active public or other market will develop for the Exchange Securities or as to
the liquidity of the trading market for the Exchange Securities. If a trading
market does not develop or is not maintained, holders of Exchange Securities may
experience difficulty in reselling the Exchange Securities or may be unable to
sell them at all. If a market for the Exchange Securities develops, any such
market making may be discontinued at any time.
15
<PAGE> 22
FAILURE TO EXCHANGE OLD SECURITIES
Exchange Securities will be issued in exchange for Old Securities only
after timely receipt by the Exchange Agent of such Old Securities, a properly
completed and duly executed Letter of Transmittal (or Agent's Message) and all
other required documentation. Therefore, holders of Old Securities desiring to
tender such Old Securities in exchange for Exchange Securities should allow
sufficient time to ensure timely delivery. Neither the Exchange Agent nor the
Company is under any duty to give notification of defects or irregularities with
respect to tenders of Old Securities for exchange. Old Securities that are not
tendered or are tendered but not accepted will, following consummation of the
Exchange Offer, continue to be subject to the existing restrictions upon
transfer thereof and, upon consummation of the Exchange Offer, certain
registration rights under the Registration Rights Agreements will terminate. In
addition, any holder of Old Securities who tenders in the Exchange Offer for the
purpose of participating in a distribution of the Exchange Securities may be
deemed to have received restricted securities, and if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. Each Participating
Broker-Dealer that receives Exchange Securities for its own account in exchange
for Old Securities, where such Old Securities were acquired by such
Participating Broker-Dealer as a result of market-making activities or any other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities. See "Plan of
Distribution." To the extent that Old Securities are tendered and accepted in
the Exchange Offer, the trading market for untendered and tendered but
unaccepted Old Securities could be adversely affected. See "The Exchange Offer."
RESALES OF NEW SECURITIES
The Company is making the Exchange Offer in reliance upon interpretations
by the staff of the Commission, as set forth in no-action letters issued to
third parties. Based on such interpretations, the Company believes that Exchange
Securities issued pursuant to the Exchange Offer in exchange for Old Securities
may be offered for resale, resold or otherwise transferred by holders thereof
(other than a holder that is an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act) without compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such
Exchange Securities are acquired in the ordinary course of such holder's
business and that such holder, other than a broker-dealer, has no arrangement or
understanding with any person to engage or participate in a distribution of such
Exchange Securities. However, the Company has not sought its own no-action
letter and there can be no assurance that the staff of the Commission would make
a similar determination with respect to the Exchange Offer as in such other
circumstances. Each holder of Old Securities, other than a broker-dealer, must
acknowledge that it is not engaged in, and does not intend to engage or
participate in, a distribution of the Exchange Securities and has no arrangement
or understanding to engage or participate in a distribution of the Exchange
Securities. If any holder is an affiliate of the Company or is engaged in or
intends to engage in or has any arrangement or understanding with respect to the
distribution of the Exchange Securities to be acquired pursuant to the Exchange
Offer, such holder (i) may not rely on the applicable interpretations of the
staff of the Commission and (ii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. Each broker-dealer that receives Exchange Securities for its
own account in exchange for Old Securities pursuant to the Exchange Offer must
acknowledge that such Exchange Securities were acquired by such broker-dealer as
a result of market-making activities or other trading activities and that it
will deliver a prospectus in connection with any resale of such Exchange
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Securities received in
exchange for Old Securities that were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that for a period of 180 days after the Expiration Date, it will make this
Prospectus available to broker-dealers for use in connection with any such
resale. See "The Exchange Offer -- Resales of New Securities."
16
<PAGE> 23
FORWARD-LOOKING STATEMENTS
This Offering Memorandum contains certain forward-looking statements
concerning the Company's existing and contemplated operations, economic
performance and financial condition. These statements are based upon a number of
assumptions and estimates which are inherently subject to uncertainties and
contingencies, many of which are beyond the control of the Company, including
the level of consumer spending for merchandise manufactured by the Company,
competition among department and specialty stores, management's ability to
predict consumer tastes, merchandise brands and mix, the effectiveness of
planned advertising, marketing and promotional campaigns, appropriate inventory
management, realization of planned synergies, private brand sales and effective
cost containment. See "Cautionary Notice Regarding Forward-Looking Statements."
17
<PAGE> 24
THE FINANCING TRANSACTIONS; USE OF PROCEEDS
The issuance of the Old Securities was part of the Financing Transactions
pursuant to which the Company intends to reduce interest expense, extend debt
maturities and improve financial flexibility. The components of the Financing
Transactions are the consummation of (i) the issuance of the Old Securities,
(ii) the Tender Offers, (iii) the Redemption and (iv) the Refinancing.
The Exchange Offer is intended to satisfy certain of the Company's
obligations under the Purchase Agreement and the Registration Rights Agreements.
The Company will not receive any cash proceeds from the issuance of the Exchange
Securities offered hereby. In consideration for issuing the Exchange Securities
contemplated in this Prospectus, the Company will receive Old Securities in like
principal amount, the form and terms of which are the same as the forms and
terms of the Exchange Securities (which replace the Old Securities), except as
otherwise described herein. The Old Securities surrendered in exchange for
Exchange Securities will be retired and canceled and cannot be reissued.
Accordingly, issuance of the Exchange Securities will not result in any increase
or decrease in the indebtedness of the Company. As such, no effect has been
given to the Exchange Offer in the pro forma statements or capitalization
tables.
The following table illustrates the estimated sources and uses of funds in
the Financing Transactions, assuming consummation of the Financing Transactions
on June 1, 1998. The actual amounts may vary from those shown below.
<TABLE>
<CAPTION>
AMOUNT
------
(IN MILLIONS)
<S> <C>
SOURCES OF FUNDS
Sale of Old Securities................................. $1,000.0
Borrowings under the Senior Credit Facility............ 364.4
-------
Total............................................. $1,364.4
=======
USES OF FUNDS
Repayment of the existing senior credit facility....... $ 217.4
Tender for the 8 3/4% Senior Notes..................... 400.0
Tender for the 9 3/8% Senior Subordinated Debentures... 550.0
Redemption of the 9% Sinking Fund Debentures........... 71.2
Tender and Redemption premiums......................... 60.4
Accrued interest....................................... 41.7
Transaction fees and expenses.......................... 23.7
-------
Total............................................. $1,364.4
=======
</TABLE>
18
<PAGE> 25
CAPITALIZATION
The following table sets forth the consolidated capitalization and total
indebtedness of the Company as of March 31, 1998 and the as adjusted
consolidated capitalization of the Company as of March 31, 1998, as adjusted to
give effect to the consummation of the Financing Transactions as if they had
occurred in their entirety on such date. The table should be read in conjunction
with the Consolidated Financial Statements and the Condensed Consolidated
Financial Statements of the Company and the notes thereto included elsewhere in
this Prospectus.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
-----------------------
ACTUAL AS ADJUSTED
------ -----------
(IN MILLIONS)
<S> <C> <C>
Short-term indebtedness:
Senior Credit Facility........................ $ 87.7 $ 68.8(1)
Current portion of long-term debt............. 3.8 --(2)
------- -------
Total short-term indebtedness............ 91.5 68.8
------- -------
Long-term indebtedness:
Senior Credit Facility........................ 125.0 275.0(1)(3)
8 3/4% Senior Notes........................... 400.0 --(4)
9 3/8% Senior Subordinated Debentures......... 550.0 --(5)
9% Sinking Fund Debentures.................... 67.5 --(2)
Securities offered hereby..................... -- 1,000.0(6)
------- -------
Total long-term indebtedness............. 1,142.5 1,275.0
------- -------
Total indebtedness................................. $1,234.0 $1,343.8
======= =======
Total stockholders' equity (deficit)............... $(437.9) $(488.5)(7)(8)
======= =======
Total capitalization............................... $ 796.1 $ 855.3
======= =======
</TABLE>
- ---------------
(1) Reflects borrowings under the $550 million Senior Credit Facility that the
Company entered into concurrently with the consummation of the Offering.
(2) Reflects the Redemption.
(3) Reflects the Company's intention that at least $275 million of borrowings
under the $550 million Senior Credit Facility that the Company entered into
concurrently with the consummation of the Offering would remain outstanding
during the next twelve months.
(4) Reflects the retirement of all of the outstanding 8 3/4% Senior Notes
pursuant to the Tender Offers. At June 9, 1998, the holders of approximately
96% of the 8 3/4% Senior Notes had tendered their notes and consents.
(5) Reflects the retirement of all of the outstanding 9 3/8% Senior Subordinated
Debentures pursuant to the Tender Offers. At June 9, 1998, the holders of
approximately 96% of the 9 3/8% Senior Subordinated Debentures had tendered
their notes and consents.
(6) Reflects the issuance of the Securities prior to the Initial Purchasers'
discount.
(7) Reflects the extraordinary loss incurred as a result of the repayment of the
existing senior credit facility, the retirement of the 8 3/4% Senior Notes
and the 9 3/8% Senior Subordinated Debentures and the redemption of the 9%
Sinking Fund Debentures.
(8) For the period from April 1, 1998 through June 2, 1998, the Company
repurchased 701,500 shares of its common stock at an approximate value of
$22,667,000.
19
<PAGE> 26
PRO FORMA UNAUDITED FINANCIAL DATA
The following pro forma unaudited consolidated financial statements present
the Company's pro forma condensed consolidated balance sheet as of March 31,
1998 and the Company's pro forma condensed consolidated statements of income for
the year ended December 31, 1997 and for the three months ended March 31, 1998
giving effect to (1)(a) the sale of $525 million aggregate principal amount of
Senior Notes due 2005, (b) the sale of $475 million aggregate principal amount
of Senior Notes due 2008, (c) the incurrence of revolving borrowings under the
Senior Credit Facility, (d) the application of the proceeds from (a), (b) and
(c) to (i) repayment of existing bank debt and other long-term debt and (ii)
payment of related transaction fees and expenses, (2) the write-off of certain
unamortized deferred financing fees, (3) the repayment of debt with the proceeds
from the sale of Alamac and (4) the income tax effects of the preceding
transactions, all as if they had occurred, for purposes of the pro forma
unaudited condensed consolidated balance sheet, as of March 31, 1998 and, for
purposes of the pro forma unaudited condensed consolidated statements of income,
as of the beginning of the respective periods presented.
These pro forma unaudited consolidated statements of income do not purport
to represent what the Company's actual results of operations would have been had
such events occurred on the aforementioned dates and should not serve as a
forecast of the Company's results of operations for any future periods.
The pro forma adjustments are based upon currently available information
and upon certain assumptions that management believes are reasonable under the
circumstances. These pro forma unaudited consolidated financial statements
should be read in conjunction with the Company's Consolidated Financial
Statements, Condensed Consolidated Financial Statements and the Notes thereto
included elsewhere herein.
20
<PAGE> 27
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
MARCH 31, 1998
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents.......................... $ 9,873 $ 1,343,789(1) $ 9,873
(1,343,789)(2)
Accounts Receivable................................ 102,239 102,239
Inventories........................................ 376,325 376,325
Prepaid expenses and other current assets.......... 19,337 19,337
---------- ----------- ----------
Total current assets................................. 507,774 -- 507,774
Property, Plant and Equipment, net................... 705,743 705,743
Other Assets
Deferred financing fees............................ 18,262 22,745(2) 23,262
(17,745)(3)
Prepaid pension and other assets................... 47,645 47,645
Goodwill........................................... 36,988 36,988
---------- ----------- ----------
$1,316,412 $ 5,000 $1,321,412
========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Senior Credit Facility............................. $ 87,714 $ (87,714)(2) $ --
Current portion of long-term debt.................. 3,750 (3,750)(2) --
New Senior Credit Facility......................... 68,789(1) 68,789
Accrued interest payable........................... 25,734 (25,734)(2) --
Trade accounts payable............................. 58,970 58,970
Other accounts payable and accrued liabilities..... 131,373 131,373
---------- ----------- ----------
Total current liabilities............................ 307,541 (48,409) 259,132
Long-Term Debt....................................... 1,142,500 (1,142,500)(2) --
Senior Notes:
Due 2005........................................... 525,000(1) 525,000
Due 2008........................................... 475,000(1) 475,000
New Senior Credit Facility........................... 275,000(1) 275,000
Noncurrent Liabilities
Deferred income taxes.............................. 222,318 (22,085)(2) 193,845
(6,388)(3)
Other liabilities.................................. 81,971 81,971
---------- ----------- ----------
Total noncurrent liabilities......................... 304,289 (28,473) 275,816
Stockholders' Equity (Deficit)....................... (437,918) (39,261)(2) (488,536)
(11,357)(3)
---------- ----------- ----------
(50,618)
-----------
$1,316,412 $ 5,000 $1,321,412
========== =========== ==========
</TABLE>
21
<PAGE> 28
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(1) To record proceeds from the Financing Transactions consisting of (a)
borrowings under the Senior Credit Facility and (b) $525 million from the
sale of the Senior Notes due 2005 and $475 million from the sale of the
Senior Notes due 2008. The pro forma adjustment to record the proceeds is
summarized as follows (in thousands of dollars):
<TABLE>
<S> <C> <C>
Cash................................................. $1,343,789
New Senior Credit Facility........................... $343,789
Senior Notes due 2005................................ 525,000
Senior Notes due 2008................................ 475,000
</TABLE>
(2) Proceeds from the Financing Transactions are used to (a) retire existing
debt of $1,234 million and accrued interest payable of $25.7 million and (b)
pay costs of the Financing Transactions -- tender and call premiums of $61.4
million and discount and expenses of $22.7 million. Costs of the tender and
call premiums of $61.4 million are expensed net of applicable income tax
benefits of $22.1 million.
<TABLE>
<S> <C> <C>
Cash................................................ $1,343,789
Other assets........................................ $ 22,745
Accrued interest payable............................ 25,734
Indebtedness:
Current........................................... 91,464
Long-term......................................... 1,142,500
Deferred income taxes............................... 22,085
Retained earnings (deficit)......................... 39,261
</TABLE>
(3) To write off unamortized deferred debt fees on existing indebtedness of
$17.7 million less related income tax benefits of $6.4 million.
22
<PAGE> 29
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
------ ----------- ---------
<S> <C> <C> <C>
Net sales.............................................. $1,657,511 $1,657,511
Cost of goods sold..................................... 1,237,657 1,237,657
---------- ----------
Gross earnings....................................... 419,854 419,854
Selling, general and administrative expenses........... 204,981 204,981
---------- ----------
Operating earnings................................... 214,873 214,873
Interest expense....................................... 102,172 $(4,760)(1) 97,412
Other expense -- net................................... 2,461 (1,292)(2) 1,169
---------- ------- ----------
Income from continuing operations before income tax
expense........................................... 110,240 6,052 116,292
Income tax expense..................................... 40,962 2,239(3) 43,221
---------- ------- ----------
Income from continuing operations.................... $ 69,258 $ 3,813 $ 73,071
========== ======= ==========
Basic net income per share............................. $ 1.14 $ 1.20
========== ==========
Diluted net income per share........................... $ 1.11 $ 1.17
========== ==========
Basic average common shares outstanding................ 61,078 61,078
Dilutive effect of stock options and stock bonus
plan.............................................. 1,576 1,576
---------- ----------
Diluted average common shares outstanding.............. 62,654 62,654
========== ==========
</TABLE>
CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
------ ----------- ---------
<S> <C> <C> <C>
Net sales............................................. $398,706 $398,706
Cost of goods sold.................................... 299,185 299,185
-------- --------
Gross earnings...................................... 99,521 99,521
Selling, general and administrative expenses.......... 55,088 55,088
-------- --------
Operating earnings.................................. 44,433 44,433
Interest expense...................................... 25,704 $(1,469)(1) 24,235
Other expense -- net.................................. 401 (322)(2) 79
-------- ------- --------
Income before income tax expense.................... 18,328 1,791 20,119
Income tax expense.................................... 6,625 645(3) 7,270
-------- ------- --------
Net income.......................................... $ 11,703 $ 1,146 $ 12,849
======== ======= ========
Basic net income per share............................ $ .20 $ .22
======== ========
Diluted net income per share.......................... $ .19 $ .21
======== ========
Basic average common shares outstanding............... 58,919 58,919
Dilutive effect of stock options and stock bonus
plan............................................. 1,991 1,991
-------- --------
Diluted average common shares outstanding............. 60,910 60,910
======== ========
</TABLE>
23
<PAGE> 30
NOTES TO THE CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF INCOME (UNAUDITED)
(1) To adjust interest expense as follows (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
INTEREST RATE DECEMBER 31, 1997 MARCH 31, 1998
------------- ----------------- ------------------
<S> <C> <C> <C>
Senior Credit Facility:
Revolver............................... 6.5% $16,635 $ 4,921
Facility Fee........................... .25% 1,375 329
Senior Notes due 2005.................... 7.875% 41,344 9,882
Senior Notes due 2008.................... 7.875% 37,406 8,941
Amortization of Original Issue
Discount............................... 652 162
------- -------
$97,412 $24,235
======= =======
</TABLE>
Pro forma interest expense has been calculated based on the Company's
average month-end debt balances for the year ended December 31, 1997 and
for the three months ended March 31, 1998, adjusted as of the beginning of
such period for the Financing Transactions and the proceeds from the sale
of Alamac. Based on this computation, the average amount outstanding under
the Revolver for the year ended December 31, 1997 was $255.9 million and
for the three months ended March 31, 1998 was $316.8 million.
(2) For the year ended December 31, 1997, to reduce other expense -- net for the
$3.4 million amortization of deferred financing fees and to include
amortization of deferred financing fees of $2.1 million related to the
Financing Transactions. For the three months ended March 31, 1998, to reduce
other expense -- net for the $0.8 million amortization of deferred financing
fees and to include amortization of deferred financing fees of $0.5 million
related to the Financing Transactions.
(3) To adjust income tax expense for the tax effect of pro forma adjustments.
24
<PAGE> 31
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected historical financial data presented below for each year in the
five year period ended December 31, 1997 were derived from the audited
Consolidated Financial Statements of the Company and its subsidiaries, and
should be read in conjunction therewith, including the notes thereto and other
information contained herein. The selected historical financial data presented
below for the three months ended March 31, 1998 and March 31, 1997 were derived
from the Condensed Consolidated Financial Statements (Unaudited) of the Company
and its subsidiaries, and should be read in conjunction therewith, including the
notes thereto and other information contained herein.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
----------------- -----------------------------------------------
1998 1997 1997 1996 1995 1994 1993(1)
---- ---- ---- ---- ---- ---- -------
(UNAUDITED)
(IN MILLIONS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................... $ 398.7 $ 357.1 $1,657.5 $1,501.8 $1,418.2 $1,346.9 $1,267.5
Cost of goods sold.............. 299.2 267.9 1,237.7 1,129.4 1,059.1 1,015.0 945.9
------- ------- ------- ------- ------- ------- -------
Gross earnings.................. 99.5 89.2 419.8 372.4 359.1 331.9 321.6
Selling, general and
administrative expenses....... 55.1 50.7 204.9 183.9 180.4 175.1 170.7
Restructuring expense........... -- -- -- -- -- -- 178.0
Amortization of excess
reorganization value.......... -- -- -- -- 152.4 203.3 190.2
------- ------- ------- ------- ------- ------- -------
Operating earnings(2)........... 44.4 38.5 214.9 188.5 26.3 (46.5) (217.3)
Interest expense................ 25.7 23.4 102.2 94.5 93.5 94.2 90.4
Other expense -- net............ 0.4 0.8 2.5 3.0 3.2 13.0 18.2(3)
------- ------- ------- ------- ------- ------- -------
Income (loss) from continuing
operations before income tax
expense (benefit) and
extraordinary items........... 18.3 14.3 110.2 91.0 (70.4) (153.7) (325.9)
Income tax expense (benefit).... 6.6 5.3 40.9 33.0 31.9 20.0 (44.1)
------- ------- ------- ------- ------- ------- -------
Net income (loss) from
continuing operations before
extraordinary items........... $ 11.7 $ 9.0 $ 69.3 $ 58.0 $(102.3) $(173.7) $(281.8)
======= ======= ======= ======= ======= ======= =======
OTHER FINANCIAL DATA:(4)
EBITDA(5)....................... $ 64.8 $ 56.3 $ 286.6 $ 257.4 $ 248.0 $ 231.0 $ 222.1
EBITDA margin(6)................ 16.2% 15.8% 17.3% 17.1% 17.5% 17.2% 17.5%
Depreciation and other
amortization(7)............... $ 20.4 $ 17.8 $ 71.7 $ 68.9 $ 69.3 $ 74.2 $ 71.2
Capital expenditures(8)......... 19.4 44.8 159.6 95.3 93.5 92.4 80.7
Ratio of EBITDA to interest
expense....................... 2.5x 2.4x 2.8x 2.7x 2.7x 2.5x 2.5x
Ratio of total debt to EBITDA... -- -- 4.1x 4.3x 4.6x 4.7x 5.0x
Ratio of earnings to fixed
charges(9).................... 1.6x 1.5x 2.0x 1.8x 0.4x -- --
Deficiency in earnings available
to cover fixed charges........ -- -- -- -- $ 70.4 $ 153.7 $ 325.9
BALANCE SHEET DATA:
Working capital................. $ 200.2 $ 82.2 $ 212.2 $ 140.9 $ 115.7 $ 122.7 $ 159.7
Total assets.................... 1,316.4 1,306.8 1,286.1 1,157.0 1,143.0 1,270.2 1,512.9
Total debt...................... 1,234.0 1,231.0 1,187.7 1,099.0 1,148.0 1,083.0 1,112.5
Total stockholders' equity
(deficit)..................... (437.9) (435.7) (423.0) (450.4) (505.9) (337.2) (140.3)
</TABLE>
25
<PAGE> 32
- ---------------
(1) The results for the year ended December 31, 1993 include restructuring
expense of $178.0 million pretax. The charge related to (i) the closing and
consolidation of certain facilities; (ii) the write-off of certain
equipment; and (iii) severance, outplacement and other costs associated
with plant closures and overhead reductions.
(2) Operating earnings (loss) for the year ended December 31, 1995 includes
amortization of excess reorganization value of $152.4 million, for the year
ended December 31, 1994 includes amortization of excess reorganization
value of $203.3 million and for the year ended December 31, 1993 includes
restructuring expense of $178 million and amortization of excess
reorganization value of $190.2 million.
(3) Includes minority interest in loss of consolidated subsidiary of $10.5
million.
(4) Includes financial data for continuing operations only, unless otherwise
disclosed.
(5) EBITDA represents operating earnings (loss) plus the sum of depreciation,
amortization of excess reorganization value, goodwill amortization and
restructuring expense. EBITDA and the EBITDA ratios are not measures of
performance or financial condition under generally accepted accounting
principles, but are presented to provide additional information related to
debt service capability. EBITDA should not be considered in isolation or as
a substitute for other measures of financial performance or liquidity under
generally accepted accounting principles.
(6) EBITDA margin represents EBITDA as a percentage of net sales for the
periods presented.
(7) Excludes amortization of excess reorganization value.
(8) Includes (i) continuing operations capital expenditures for the three
months ended March 31, 1998 and 1997 of $19.4 million and $34.4 million,
respectively, and for the years ended December 31, 1997, 1996, 1995, 1994
and 1993 of $148.9 million, $94.9 million, $92.4 million, $84.5 million and
$76.9 million, respectively, (ii) capital expenditures for the Whitmire
facility before its transfer to continuing operations from discontinued
operations, for the three months ended March 31, 1997 of $0.3 million and
for the years ended December 31, 1997, 1996, 1995, 1994 and 1993 of $0.6
million, $0.4 million, $1.1 million, $7.9 million and $3.8 million,
respectively, and (iii) the amount allocated to property, plant and
equipment related to the purchase of towel manufacturing facilities from
the Bibb Company for the three months ended March 31, 1997 and for the year
ended December 31, 1997 of $10.1 million and $10.1 million, respectively.
(9) For purposes of this ratio, "earnings" consist of earnings before income
taxes and fixed charges, and "fixed charges" consist of interest expense
and the portion of rents representative of an interest factor. The ratio of
earnings to fixed charges is computed by adding earnings before income
taxes and fixed charges and dividing by fixed charges.
26
<PAGE> 33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
On August 27, 1997 the Company closed a transaction pursuant to which
WestPoint Stevens sold its Alamac Knit Fabrics subsidiary (other than cash,
accounts receivable of approximately $42.5 million and a yarn mill located in
Whitmire, S.C.) to Dyersburg Corporation for approximately $126 million. The
Whitmire facility was transferred from the Alamac Knit Fabrics subsidiary to the
Company to support the Company's expansion of its sheeting production capacity.
As a result of the transaction, the Company now accounts for the Alamac Knit
Fabrics subsidiary as a discontinued operation and the accompanying financial
statements have been adjusted and restated accordingly.
In February 1998 the Board of Directors declared a two-for-one stock split
of its common stock payable on March 2, 1998 in the form of a 100% stock
dividend to stockholders of record on February 16, 1998. Outstanding shares,
stock purchases and earnings per share comparisons for all periods have been
restated to reflect the stock split.
The Company has determined that it will need to modify or replace portions
of its software so that its computer systems will function properly with respect
to dates in the year 2000 and beyond. The Company's comprehensive Year 2000
initiative is being managed by a team of internal staff and outside consultants.
The team's activities are designed to ensure that there is no adverse effect on
the Company's core business operations and that transactions with customers,
suppliers, and financial institutions are fully supported. The Company is well
underway with these efforts. In 1994 the Company began a company-wide
manufacturing and distribution systems redesign and implementation project
(including customer service, sales, product costing and inventory controls)
which is expected to be completed in early 1999. These new systems, which are
Year 2000 compliant, replace substantially all of the Company's internal
manufacturing and distribution systems. The Company's business application
programs are currently compliant or will be made compliant through the Year 2000
initiative. The few remaining non-compliant programs are to be brought into
compliance by the vendors that will supply the programs or through modifications
by internal staff. The majority of the Year 2000 initiative is scheduled to be
completed by December 31, 1998, with a few software programs scheduled to be
replaced in early 1999.
The Company also has initiated discussions with its significant suppliers,
large customers and financial institutions to ensure that those parties have
appropriate plans to remediate Year 2000 issues where their systems interface
with the Company's systems or otherwise impact its operations. The Company is
assessing the extent to which its operations are vulnerable should those
organizations fail to remediate properly their computer systems. The Company is
following up with critical suppliers and customers concerning their plans and
progress in addressing the Year 2000 problem. The costs of the Year 2000
initiative are not expected to be material to the Company's results of
operations or financial position and are being expensed as incurred.
The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources and other factors. However,
there can be no guarantee that these estimates will be achieved and actual
results could differ materially from those anticipated. Specific factors that
might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997
Net Sales. Net sales for the three months ended March 31, 1998 increased
$41.6 million, or 11.7% to $398.7 million compared with net sales of $357.1
million for the three months ended March 31, 1997. The
27
<PAGE> 34
increase in net sales resulted primarily from higher unit volume in the 1998
period compared with the 1997 period.
Gross Earnings/Margins. Gross earnings for the three months ended March
31, 1998 of $99.5 million increased $10.3 million, or 11.5%, compared with $89.2
million for the same period of 1997 and reflect gross margins of 25% in both the
1998 and 1997 periods. Gross earnings increased in the first quarter of 1998
primarily as a result of the increase in unit volume. Gross margins of 25% were
unchanged from last year primarily as a result of lower raw material costs
offsetting cost increases related to depreciation expense and wages.
Operating Earnings/Margins. Selling, general and administrative expenses
increased by $4.4 million, or 8.6%, in the first quarter of 1998 compared with
the same period last year, and as a percentage of net sales represent 13.8% in
1998 and 14.2% in 1997. The increase in selling, general and administrative
expenses in the first quarter of 1998 was due primarily to acquisitions along
with higher warehousing and shipping expense.
Operating earnings for the three months ended March 31, 1998 were $44.4
million, or 11.1% of sales, and increased $5.9 million, or 15.4%, compared with
operating earnings of $38.5 million, or 10.8% of sales, for the same period of
1997. The increase resulted from the increase in gross earnings offset somewhat
by the increase in selling, general and administrative expenses discussed above.
Interest Expense. Interest expense for the three months ended March 31,
1998 of $25.7 million increased $2.3 million compared with interest expense for
the three months ended March 31, 1997. The increase was due primarily to higher
average debt levels in the 1998 first quarter compared with the corresponding
1997 average debt levels.
Other Expense-Net. Other expense-net in the first quarter of 1998 of $0.4
million decreased $0.4 million compared with the 1997 period and consists
primarily of the amortization of deferred financing fees of $1 million in both
periods less certain miscellaneous income items.
Income Tax Expense. The Company's effective tax rate differed from the
federal statutory rate primarily due to state income taxes and nondeductible
items.
Income from Continuing/Discontinued Operations. Income from continuing
operations for the first quarter of 1998 was $11.7 million, or $.19 per share
diluted, compared with net income from continuing operations of $9 million, or
$.14 per share diluted, for the same period of last year.
Income from discontinued operations for the first quarter of 1997 was $1.1
million, or $.02 per share diluted.
Net Income. Net income for the first quarter of 1998 was $11.7 million, or
$.19 per share diluted, compared with net income of $10.1 million, or $.16 per
share diluted, for the same period of last year.
Diluted per share amounts are based on 60.9 million and 63.7 million
average shares outstanding for the 1998 and 1997 periods, respectively. The
decrease in the average shares outstanding was primarily the result of the
purchase by the Company of shares under the stock repurchase programs.
YEAR ENDED DECEMBER 31, 1997 COMPARED WITH YEAR ENDED DECEMBER 31, 1996
Net Sales. Net sales for the year ended December 31, 1997 increased $155.7
million, or 10.4%, to $1,657.5 million compared with net sales of $1,501.8
million for the year ended December 31, 1996. The increase in net sales resulted
primarily from higher unit volume (including acquisitions) in the 1997 period
compared with the 1996 period.
Gross Earnings/Margins. Gross earnings for the year ended December 31,
1997 of $419.8 million increased $47.4 million, or 12.7%, compared with $372.4
million for the same period of 1996 and reflect gross margins of 25.3% in the
1997 period compared with 24.8% in the 1996 period. Gross earnings and margins
increased in 1997 primarily as a result of the increase in unit volume and lower
raw material costs.
28
<PAGE> 35
Operating Earnings/Margins. Selling, general and administrative expenses
increased by $21.1 million, or 11.5%, for the year ended December 31, 1997,
compared with the same period of 1996, and as a percentage of net sales
represent 12.4% in 1997 and 12.2% in 1996. The increase in selling, general and
administrative expenses for 1997 was due primarily to acquisitions along with
higher warehousing/shipping and advertising expenses.
Operating earnings for the year ended December 31, 1997 were $214.9
million, or 13% of sales, and increased $26.4 million, or 14%, compared with
operating earnings of $188.5 million, or 12.6% of sales, for the year ended
December 31, 1996. The increase resulted from the increase in gross earnings
offset somewhat by the increase in selling, general and administrative expenses
discussed above.
Interest Expense. Interest expense for the year ended December 31, 1997 of
$102.2 million increased $7.7 million compared with interest expense for the
year ended December 31, 1996. The increase was due primarily to higher average
debt levels in the 1997 period compared with the corresponding 1996 average debt
levels.
Other Expense-Net. Other expense-net for the year ended December 31, 1997
decreased $0.5 million compared with the same period in 1996. Included in other
expense-net for the years ended December 31, 1997 and 1996 are the amortization
of deferred financing fees of $3.9 million in each period less certain
miscellaneous income items.
Income Tax Expense. The Company's effective tax rate differed from the
federal statutory rate primarily due to state income taxes and nondeductible
items.
Income from Continuing/Discontinued Operations. Income from continuing
operations for the year ended December 31, 1997 was $69.3 million, or $1.11 per
share diluted, compared with income from continuing operations of $58 million,
or $.91 per share diluted, for the year ended December 31, 1996.
Income from discontinued operations for the year ended December 31, 1997
was $2.6 million, or $.04 per share diluted, compared with a loss from
discontinued operations of $0.3 million for the year ended December 31, 1996.
Gain on Sale of Discontinued Operations. During the third quarter of 1997
the Company recorded a gain on the sale of its Alamac Knit Fabrics subsidiary of
$6.1 million, or $.10 per share diluted.
Net Income. Net income for the year ended December 31, 1997 was $78
million, or $1.25 per share diluted, compared with net income of $57.7 million,
or $.91 per share diluted, for the year ended December 31, 1996.
Diluted per share amounts are based on 62.7 million and 63.7 million
average shares outstanding for the 1997 and 1996 periods, respectively. The
decrease in the average shares outstanding was primarily the result of the
purchase by the Company of shares under the stock repurchase programs.
YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31, 1995
Net Sales. Net sales for the year ended December 31, 1996 increased $83.6
million, or 5.9%, to $1,501.8 million compared with net sales of $1,418.2
million for the year ended December 31, 1995. The increase in net sales resulted
primarily from higher unit volume in the 1996 period compared with the 1995
period.
Gross Earnings/Margins. Gross earnings for the year ended December 31,
1996 of $372.4 million increased $13.3 million, or 3.7%, compared with $359.1
million for the same period of 1995 and reflect gross margins of 24.8% in the
1996 period compared with 25.3% in the 1995 period. Gross earnings increased in
1996 primarily as a result of the increase in unit volume, offset somewhat by a
wage increase effective the beginning of the second quarter, higher raw material
costs, and production challenges due to high customer demand and capacity
constraints in the last half of 1996.
Operating Earnings/Margins. Selling, general and administrative expenses
increased by $3.5 million, or 1.9%, for the year ended December 31, 1996
compared with the same period of 1995, and as a percentage of net sales
represent 12.2% in 1996 and 12.7% in 1995. The increase in selling, general and
administrative
29
<PAGE> 36
expenses in 1996 was due primarily to higher warehousing/shipping and
advertising expenses, offset somewhat by lower selling and trade receivables
program expenses.
Operating earnings were $188.5 million for the year ended December 31, 1996
compared with operating earnings of $26.3 million for the same period of 1995
which includes the amortization of excess reorganization value of $152.4
million. Operating earnings increased as a result of the increase in gross
earnings offset somewhat by the increase in selling, general and administrative
expenses, and the decrease in amortization of excess reorganization value which
was completely amortized as of September 30, 1995.
Interest Expense. Interest expense for the year ended December 31, 1996 of
$94.5 million increased $1 million compared with interest expense for the year
ended December 31, 1995. The increase was due primarily to higher average debt
levels in the 1996 period compared with the corresponding 1995 average debt
levels offset somewhat by lower interest rates on the Company's variable rate
bank debt.
Other Expense-Net. Other expense-net for the year ended December 31, 1996
decreased $0.2 million compared with the same period in 1995. Included in other
expense-net for the years ended December 31, 1996 and 1995 are the amortization
of deferred financing fees of $3.9 million in each period less certain
miscellaneous income items.
Income Tax Expense. The Company's effective tax rate differed from the
federal statutory rate primarily due to state income taxes, nondeductible items
and the effects of amortization of excess reorganization value in 1995.
Income from Continuing/Discontinued Operations. Income from continuing
operations for the year ended December 31, 1996 was $58 million, or $.91 per
share diluted. For the year ended December 31, 1995, the loss from continuing
operations was $102.3 million, or $1.57 per share diluted, including
amortization of excess reorganization value of $152.4 million, or $2.34 per
share diluted.
Loss from discontinued operations for the year ended December 31, 1996 was
$0.3 million. For the year ended December 31, 1995, the loss from discontinued
operations was $27.5 million, or $.42 per share diluted, including amortization
of excess reorganization value of $25.3 million, or $.38 per share diluted.
Net Income. Net income for the year ended December 31, 1996 was $57.7
million, or $.91 per share diluted. For the year ended December 31, 1995, the
net loss was $129.8 million, or $1.99 per share diluted, including amortization
of excess reorganization value of $177.7 million, or $2.72 per share diluted.
Excess reorganization value was completely amortized in 1995.
Diluted per share amounts are based on 63.7 million and 65.4 million
average shares outstanding for the 1996 and 1995 periods, respectively. The
decrease in the average shares outstanding was primarily the result of the
purchase by the Company of shares under the stock repurchase programs.
Operating Earnings Before Certain Charges. Operating earnings for the year
ended December 31, 1996 were $188.5 million, or 12.6% of sales, and increased
$9.8 million, or 5.5%, compared with operating earnings (before the amortization
of excess reorganization value) of $178.7 million, or 12.6% of sales, for the
same period of 1995. The increase resulted from the increase in gross earnings
offset somewhat by the increase in selling, general and administrative expenses
discussed above.
EFFECTS OF INFLATION
The Company believes that the relatively moderate rate of inflation over
the past few years has not had a significant impact on its sales or
profitability.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of liquidity are expected to be cash from
its operations and funds available under the Senior Credit Facility. The maximum
commitment under the Senior Credit Facility is $550 million, and the Company
estimates that it would have had approximately $158.4 million of unused
borrowing availability on June 1, 1998, assuming consummation of the Financing
Transactions on that date.
30
<PAGE> 37
The Senior Credit Facility contains covenants which, among other things, limit
indebtedness and require the maintenance of certain financial ratios and minimum
net worth as defined. Interest under the Senior Credit Facility will be payable
either at the base rate of Nationsbank, N.A. or at LIBOR plus a margin, such
margin depending upon the Company's ratio of EBITDA (as defined therein) to cash
interest expenses. See "Description of Certain Other Indebtedness -- Senior
Credit Facility."
The Company's principal uses of cash for the next several years will be
operating expenses, capital expenditures and debt service requirements related
primarily to interest payments. The Company spent approximately $160 million in
1997 on capital expenditures, including the purchase in February 1997 of towel
manufacturing facilities from the Bibb Company, and intends to invest an
additional $145 million in 1998.
In February 1998 the Board of Directors declared a two-for-one stock split
of its common stock payable on March 2, 1998 in the form of a 100% stock
dividend to stockholders of record on February 16, 1998. Outstanding shares,
stock purchases and earnings per share comparisons for all periods have been
restated to reflect the stock split.
During the first three months of 1998, the Company purchased approximately
1.3 million shares (on a split basis) under its various stock repurchase
programs, at an average price of $23.92 per share. During 1997 the Company
purchased approximately 3.4 million shares (on a split basis) under the various
stock repurchase programs, at an average price of $19.64 per share. In August
1997 the Board of Directors approved the purchase of up to 6.0 million
additional shares of the Company's common stock (on a split basis), subject to
the Company's debt limitations, which brings the total shares that have been
approved for purchase to 16.0 million shares (on a split basis). At March 31,
1998, approximately 4.5 million shares (on a split basis) remained to be
purchased.
Cash contributions to the Company's pension plans in 1998 are estimated to
total approximately $3 million, compared with actual cash contributions in 1997
of $17.3 million.
The Company, through a "bankruptcy remote" receivables subsidiary, has a
Trade Receivables Program which provides for the sale of accounts receivable, on
a revolving basis. At March 31, 1998, December 31, 1997 and December 31, 1996,
$103.9 million, $111.8 million and $133 million, respectively, had been sold
under this program and the sale is reflected as a reduction of accounts
receivable in the Company's Consolidated Balance Sheets. The cost of the Trade
Receivables Program in 1998 is estimated to total approximately $7 million,
compared with $7.6 million in 1997, and will be charged to selling, general and
administrative expenses.
Prior to the consummation of the Financing Transactions, debt service
requirements for interest payments in 1998 are estimated to total approximately
$108 million (excluding amounts related to the Trade Receivables Program)
compared with payments of $107.4 million in 1997. Debt service requirements in
1998 related to required principal amortization total approximately $3.8
million.
On April 29, 1998, the Company announced the Tender Offers and consent
solicitations for all of its outstanding 8 3/4% Senior Notes and its 9 3/8%
Senior Subordinated Debentures. The purchase price for the 8 3/4% Senior Notes
and 9 3/8% Senior Subordinated Debentures was based on a fixed spread of 0.375%
and 0.500%, respectively, over the yield of the 5 5/8% of U.S. Treasury Notes
due November 30, 1998, on the second business day prior to the expiration date.
On June 9, 1998, utilizing the proceeds from the issuance of the Old Securities,
the Company consummated the Tender Offer for each series of notes, retiring
approximately 96% of each series of notes. On July 9, 1998, the Company redeemed
all of its outstanding 9% Sinking Fund Debentures due 2017.
Management believes that cash from the Company's operations and borrowings
under its credit agreements will provide the funding necessary to meet the
Company's anticipated requirements for capital expenditures and operating
expenses and to enable it to meet its anticipated debt service requirements.
31
<PAGE> 38
BUSINESS
The Company is engaged directly and indirectly through its subsidiaries in
the manufacture, marketing and distribution of Home Fashions products. The
Company manufactures and markets Home Fashions products for distribution to
chain and department stores, mass merchants and specialty stores. Home Fashions
products are manufactured and distributed under owned trademarks and pursuant to
various licensing agreements. See "-- Trademarks and Licenses." The Company's
management estimates that it has the largest market share in the domestic sheet
and pillowcase market and shares leadership in the domestic bath towel market.
Such estimates are calculated by the Company based on United States government
data, publicly available information about the Company's competitors and
information in trade publications.
PRODUCTS
The Company manufactures and markets a broad range of bed and bath
products, including decorative, private label and institutional sheets and
towels, designer sheets and accessories, blankets, bedskirts, bedspreads,
comforters, duvet covers, drapes, valances, throw pillows, shower curtains and
table covers. Such products are made from a variety of fabrics, such as
chambray, twill, sateen, flannel, linen, cotton and cotton blends and are
available in a wide assortment of colors and patterns. The Company has
positioned itself as a single-source supplier to retailers of bed and bath
products, offering a broad assortment of products across multiple price points.
Such product and price point breadth allows the Company to provide a
comprehensive product offering for each major distribution channel.
TRADEMARKS AND LICENSES
The Company's products are marketed under well-known and firmly established
trademarks, brand names and private labels. The Company uses trademarks, trade
names and private labels as merchandising tools to assist its customers in
coordinating their product offerings and differentiating their products from
those of their competitors. The Company's trademarks include ATELIER MARTEX(R),
MARTEX(R), UTICA(R), STEVENS(R), LADY PEPPERELL(R) and VELLUX(R). In addition,
certain products are manufactured and sold pursuant to licensing agreements
under designer names that include, among others, Ralph Lauren Home Collection,
Sanderson, Star Wars, Designers Guild and Esprit. The license agreements for the
Company's designer brands generally are for a term of two or three years; some
of the licenses are automatically renewable for additional periods, provided
that certain sales thresholds set forth in the license agreements are met. No
single license has accounted for more than 11% of the Company's total sales
volume during any of the last five fiscal years. The following are the
expiration dates for the licensing agreements discussed above: Ralph Lauren Home
Collection, December 31, 2000; Sanderson, March 31, 1999; Star Wars, September
30, 2001 and Esprit, December 31, 2000.
MARKETING
The Company is committed to developing and maintaining integral
relationships with its customers through "Strategic Partnering," a program
designed to improve customers' operating results by leveraging the Company's
merchandising, manufacturing and inventory management skills. "Strategic
Partnering" includes Electronic Data Interchange direct electronic entry
systems, Quick Response and Vendor Managed Inventory customer delivery programs
and point-of-sale processing. The Company incorporates Strategic Partnering into
its planning, manufacturing and shipping systems, in order to enable it to
efficiently and economically anticipate and respond to customers' inventory
requirements. As a result, the Company is better able to plan and forecast its
own production and inventory requirements. Sales of the Company's products are
conducted through a divisional format consisting of the Fashion Brands, Mass
Brands and International divisions. Within each domestic division, sales are
conducted by business units consisting of marketing, merchandising, management
information systems, finance and sales staff members under the supervision of an
account executive. Business units are linked by a centralized manufacturing
logistics and planning group and designer and administration groups. Each
business unit focuses on one of the following channels of distribution: mass
merchants; department and specialty stores; custom brands; Ralph Lauren; health
and hospitality institutions; international and other independent channels to
service specialized areas, including freestanding window
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treatments, blankets and baby bedding. This organization allows the Company to
tailor its services and resources to the different requirements of each channel
of distribution and customer.
The Company works closely with its major customers to assist them in
merchandising and promoting its products to the consumer. In addition, the
Company periodically meets with its customers in an effort to maximize product
exposure and sales and to jointly develop merchandise assortments and plan
promotional events specifically tailored to the customer. The Company provides
merchandising assistance with store layouts, fixture designs, advertising and
point-of-sale displays. A national consumer and trade advertising campaign and
comprehensive internet web site have served to enhance brand recognition. The
Company also provides its customers with suggested customized advertising
materials designed to increase its product sales.
Approximately 86% of the Company's sales are made to retail establishments
in the United States, including chain and department stores, mass merchants, and
specialty bed and bath stores. Finished products are distributed to retailers
directly from the Company's plants. Distribution to hospitals and other
healthcare establishments account for most of the remaining portion of the
Company's sales. Certain institutional products also are sold directly and
through distributors to major hotel and motel chains, and to laundry supply
businesses. In addition to domestic sales, the Company distributes its products
for eventual sale to certain foreign markets, principally Canada, Mexico, the
United Kingdom, continental Europe, the Middle East and the Far East.
International operations accounted for less than 5% of the total revenues of the
Company in 1997.
In addition, certain products of the Company are sold through WestPoint
Stevens Stores Inc., a wholly-owned subsidiary of the Company ("WestPoint
Stores"). WestPoint Stores currently consists of 43 geographically dispersed,
value-priced outlets throughout the United States and in Canada, some of which
are located in factory outlet shopping centers. The products sold in WestPoint
Stores are first quality (including overstocks), seconds, discontinued items and
other products.
INVENTORY MANAGEMENT, ELECTRONIC COMMUNICATION AND DELIVERY
The Company uses EDI, Quick Response and Vendor Managed Inventory
replenishment programs, point-of-sale data and the latest available technology
in retail warehouse and shelf space management to minimize inventory and
maximize floor stock turnover for its customers. The Company's EDI system allows
customers to place orders, and allows the Company to fill, track and bill
orders, all by computer. This system enables the Company to ship products on a
Quick Response basis so that customers can maintain lower inventories and react
rapidly to changes in product demand. In addition, the Company is using Vendor
Managed Inventory and dedicating certain manufacturing facilities to servicing
key strategic customers. The Company anticipates that these programs will result
in lower transportation expense and reduced distribution complexities for its
customers. Through the use of the Nielsen Spaceman III category management
program, the Company supports its customers' efforts to improve operating
results through efficient inventory and shelf space management. The Company's
objective is to provide its customers with 100% delivery reliability in terms of
order quantities and delivery schedules. The Company believes that the use of
in-house transportation has enabled the Company to maintain a high level of
on-time delivery.
SEASONALITY; INVENTORY
Traditionally, the Home Fashions industry has been seasonal, with peak
sales seasons in the summer and fall. In accordance with industry practice, the
Company increases its inventory levels during the first six months of the year
to meet customer demands for the summer and fall peak seasons. The Company's
commitment to EDI, Quick Response, and Vendor Managed Inventory, however, has
facilitated a more even distribution of products throughout the calendar year.
CUSTOMERS
The Company is pursuing strategic relationships with key merchandisers. An
important component of the Company's strategy is to increase its share of shelf
and floor space by strengthening its partnership with its
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customers. The Company is working closely with retailers and is sharing
information and business practices with them to improve service and achieve
higher profitability for both the retailer and the Company.
The Company's Home Fashions products are sold to chain stores, including,
among others, J.C. Penney Company, Inc. ("J.C. Penney"), and Sears Roebuck &
Co., Inc. ("Sears"); mass merchants such as Wal-Mart Stores, Inc. ("Wal-Mart"),
Kmart Corporation ("Kmart") and Target Stores (a division of Dayton Hudson
Corporation); and department and specialty stores, including Federated
Department Stores and Mervyn's (also a division of Dayton Hudson Corporation).
The above named customers, which are the Company's six largest customers,
accounted for approximately 52% of the net sales of the Company during the
fiscal year ended December 31, 1997. In 1997 sales to Dayton Hudson Corporation
were 13% of the net sales of the Company and sales to Kmart were 10% of the net
sales of the Company. Each of such customers has purchased goods from the
Company in each of the last 10 years.
MANUFACTURING
The Company currently uses the latest manufacturing and distribution
equipment and technologies in its mills. Management therefore believes that the
Company is one of the most efficient manufacturers in the Home Fashions
industry. Over the past five years, the Company has spent approximately $522
million to modernize its manufacturing and distribution systems, approximately
$160 million which was spent during 1997, including the purchase in February
1997 of towel manufacturing facilities from the Bibb Company. The capital
expenditures have been used to, among other things, replace older looms with
wider, faster, more efficient air jet looms, replace ring spinning with open-end
and air jet spinning, modernize with high speed multicolor printing equipment,
and further automate the Company's cut and sew operations. New air jet looms
produce at higher speeds than older looms, yielding fewer defects, requiring
less maintenance and providing cleaner and safer working environments. Using air
jet technology, compressed air propels the filling yarn at high speeds, with
robotics handling fabric cutting and tucking. The Company's new open-end
spinning machines use computerized monitors and sensors which track and analyze
the work, streamline information gathering and detect defects immediately, to
improve yarn quality. The Company intends to invest approximately $145 million
in capital improvements in 1998, which includes the addition of new wide air jet
looms, the continued conversion of the Company's older narrow looms to higher
speed, wider air jet looms, construction of new and expanded distribution
centers and installation of dyeing and finishing equipment, and automated
fabricating equipment and distribution management systems which will further
eliminate labor-intensive and costly manufacturing steps and improve
distribution efficiency and expand capacity. These capital programs have
resulted, and are expected to continue to result, in improved product quality,
increased efficiency and capacity, lower costs and quicker response time to
customer orders. The Company (including its subsidiaries) owns and utilizes 23
manufacturing facilities located primarily in the Southeastern United States and
leases a manufacturing facility in England.
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DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS
SENIOR CREDIT FACILITY
On June 9, 1998, the Company entered into an amended Senior Credit Facility
with certain lenders (collectively, the "Banks"). The Senior Credit Facility
consists of a revolving credit facility in the aggregate principal amount of up
to $550,000,000 (the "Revolver"). Interest under the Senior Credit Facility is
payable either at the base rate of Nationsbank, N.A. or at LIBOR plus a margin,
such margin depending upon the Company's ratio of EBITDA (as defined therein) to
cash interest expense. The Company will pay a facility fee in an amount equal to
0.25% of each Bank's commitment under the Revolver. The loans under the Senior
Credit Facility will be secured by the pledge of substantially all the stock of
the Company's subsidiaries and a first priority lien on substantially all of the
assets of the Company and its subsidiaries, other than accounts receivable of
the Company sold to the Receivables Subsidiary (as defined).
The Revolver contains a number of customary covenants including, among
others, restrictions on the incurrence of indebtedness, liens, and guarantees.
Certain provisions will require the Company to maintain a minimum consolidated
net worth (as defined), a minimum current ratio and a minimum interest coverage
ratio. The Company will be permitted to make restricted payments in an amount up
to 50% of net income after March 31, 1998, plus other adjustments.
TRADE RECEIVABLES PROGRAM
The Company, through a "bankruptcy remote" receivables subsidiary
("Receivables Subsidiary"), has a trade receivables program ("Trade Receivables
Program") which provides for the sale of accounts receivable, on a revolving
basis. At March 31, 1998 and December 31, 1997 and 1996, $103.9 million, $111.8
million and $133.0 million, respectively, had been sold under this program and
the sale is reflected as a reduction of accounts receivable in the accompanying
Consolidated Balance Sheets. The Trade Receivables Program was financed through
the issuance of (a) $115.0 million of Floating Rate Class A Trade Receivables
Participation Certificates ("Class A Certificates"); (b) $18.0 million of
Floating Rate Class B Trade Receivables Participation Certificates ("Class B
Certificates"); and (c) $27.0 million of Investor Revolving Certificates. The
Class A Certificates and Class B Certificates bear interest at LIBOR plus 0.270%
and LIBOR plus 0.570%, respectively, and the Investor Revolving Certificates
bear interest at LIBOR plus 0.375%. The expected final payment date of amounts
outstanding under the Trade Receivables Program is May 18, 1999, but earlier
termination could occur upon the occurrence of certain defined events. The cost
of the Trade Receivables Program is charged to selling and administrative
expense.
The Trade Receivables Program requires the Company and Receivables
Subsidiary to perform certain servicing obligations with respect to the existing
and future accounts receivable sold by the Company. The Company is not subject
to any financial covenants under the Trade Receivables Program, but the
documentation for the Trade Receivables Program provides for early termination
of the Trade Receivables Program and early payment of the securities issued
thereunder upon certain events, which include the incurrence of losses or
delinquencies on the receivables in excess of certain levels or the bankruptcy
or insolvency of the Company. See "Risk Factors -- Trade Receivables Program."
THE 8 3/4% SENIOR NOTES AND 9 3/8% SENIOR SUBORDINATED DEBENTURES
The approximately $15.4 million aggregate principal amount of 8 3/4% Senior
Notes not redeemed pursuant to the Tender Offers will be general unsecured
obligations of the Company and will rank senior in right of payment to the
approximately $22.8 million aggregate principal amount of 9 3/8% Senior
Subordinated Debentures not redeemed pursuant to the Tender Offers and pari
passu in right of payment with all Senior Indebtedness of the Company. The
9 3/8% Senior Subordinated Debentures will be general unsecured obligations of
the Company and subordinate in right of payment to the 8 3/4% Senior Notes and
all other existing and future Senior Indebtedness of the Company pari passu with
any future senior subordinated indebtedness and senior to any future
subordinated indebtedness of the Company.
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The 8 3/4% Senior Notes bear interest at the rate of 8 3/4% per annum,
payable semi-annually on June 15 and December 15 of each year. They are
redeemable, in whole or in part at any time on or after December 15, 1998, at
the option of the Company, at the redemption prices set forth therein, together
with accrued and unpaid interest to the date of redemption. The 9 3/8% Senior
Subordinated Debentures bear interest at the rate of 9 3/8% per annum, payable
semiannually on June 15 and December 15 of each year. They are redeemable, in
whole or in part at any time on or after December 15, 1998, at the option of the
Company, at the redemption prices set forth therein, together with accrued and
unpaid interest to the date of the redemption.
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DESCRIPTION OF THE SECURITIES
The Exchange Securities offered hereby will be issued as a separate series
under the Indenture governing the Senior Notes due 2005 and the Indenture
governing the Senior Notes due 2008 (collectively the "Indentures") each dated
as of June 9, 1998 between the Company and The Bank of New York, as trustee (the
"Trustee"). The form and terms of the Exchange Securities are the same as the
form and terms of the Old Securities (which they replace) except that (i) the
Exchange Securities will have been registered under the Securities Act and,
therefore, will not bear legends restricting the transfer thereof and (ii)
holders of the Exchange Securities will not be entitled to certain rights of
holders of Old Securities under the Registration Rights Agreements, including
the provisions providing for an increase in the interest rate on the Old
Securities in certain circumstances relating to the timing of the Exchange
Offer, which rights will terminate when the Exchange Offer is consummated. The
Old Securities issued in the Initial Offering and the Exchange Securities
offered hereby are referred to collectively as the "Securities."
The terms of the Securities include those stated in the Indentures and
those made part of the Indentures by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), as in effect on the date of the
Indentures. The Securities are subject to all such terms and Holders of the
Securities are referred to the Indentures and the Trust Indenture Act for a
statement thereof. The following summary of certain provisions of the Indentures
does not purport to be complete and is qualified in its entirety by reference to
the Indentures, including the definitions therein of certain terms used below.
The definitions of certain capitalized terms used in the following summary are
set forth under "-- Certain Definitions." Securities that remain outstanding
after consummation of the Exchange Offer and the applicable Exchange Securities
will be treated as a single class of Securities under the applicable Indenture.
GENERAL
The Senior Notes due 2005 will be senior obligations of the Company limited
to $525 million in aggregate principal amount. The Senior Notes due 2005 will
bear interest at the rate of 7 7/8% per annum, payable semiannually in arrears
on June 15 and December 15 in each year to Holders of record of the Senior Notes
due 2005 at the close of business on the June 1 or December 1 next preceding the
interest payment date. Interest will initially accrue from the date of original
issuance and the first interest payment date will be December 15, 1998. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
Senior Notes due 2005 mature on June 15, 2005 and will be issued only in
registered form without coupons in denominations of $1,000 and integral
multiples thereof.
The Senior Notes due 2008 will be senior obligations of the Company limited
to $475 million in aggregate principal amount. The Senior Notes due 2008 will
bear interest at the rate of 7 7/8% per annum, payable semi-annually in arrears
on June 15 and December 15 in each year to Holders of record of the Senior Notes
due 2008 at the close of business on the June 1 or December 1 next preceding the
interest payment date. Interest will initially accrue from the date of original
issuance and the first interest payment date will be December 15, 1998. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
Senior Notes due 2008 mature on June 15, 2008 and will be issued only in
registered form without coupons in denominations of $1,000 and integral
multiples thereof.
Holders of Securities must surrender the Securities to the applicable
Paying Agent to collect principal payments. The Company will pay principal and
interest by check and will mail interest checks to a holder's registered
address. Each Trustee initially will act as Paying Agent and Registrar under the
applicable Indenture. The Company may change the Paying Agent or Registrar
without prior notice to the Holders of Securities.
OPTIONAL REDEMPTION
The Securities will be redeemable, in whole or in part, at the option of
the Company at 100% of the principal amount thereof plus the Make-Whole Premium,
together with all accrued and unpaid interest thereon. The Securities are not
subject to redemption through the operation of a sinking fund.
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If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the applicable
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are then listed or, if the Securities
are not then listed on a national securities exchange, on pro rata basis, by lot
or by such method as the applicable Trustee shall deem fair and appropriate.
Notice of redemption shall be mailed by first-class mail at least 30 but not
more than 60 days prior to the redemption date to each Holder of the applicable
Securities to be redeemed at its registered address. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
a principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Note. On and after
the redemption date, interest will cease to accrue on the applicable Securities
or portions thereof called for redemption.
RANKING
The Securities will rank pari passu in right of payment with all existing
or future unsubordinated indebtedness of the Company and senior to all
subordinated indebtedness of the Company. The Senior Notes due 2005 and Senior
Notes due 2008 will rank pari passu in right to payment with each other. As of
March 31, 1998, claims of holders of the Securities would have been structurally
subordinated to $62.2 million of indebtedness and other liabilities of the
Company's subsidiaries. See "Risk Factors -- Ranking; Asset Encumbrances."
CERTAIN COVENANTS
Each of the Indentures (unless otherwise noted) provides that the covenants
set forth below will be applicable to the Company and the Restricted
Subsidiaries; provided, however, that if no Default has occurred and is
continuing, after the ratings assigned to an applicable issue of Securities by
any two of the Rating Agencies are equal to or higher than BBB- and Baa3, or the
equivalents thereof, as applicable (the "Investment Grade Ratings"), and
notwithstanding that such Securities may later cease to have an Investment Grade
Rating, the Company and the Restricted Subsidiaries will not be subject to the
provisions of the Indenture governing such Securities described under
"Limitation on Additional Indebtedness," clause (b) of the first paragraph and
clause (c) of the second paragraph of "Limitation on Designations of
Unrestricted Subsidiaries," and clause (v) of the first paragraph of
"Consolidations, Mergers and Sales of Assets."
Limitation on Additional Indebtedness. The Indentures provide that the
Company will not, and will not permit any of the Restricted Subsidiaries to,
incur any Indebtedness (including any Acquired Indebtedness) except for:
(a) the Securities;
(b) Indebtedness (including letters of credit) of the Company and the
Restricted Subsidiaries under the Senior Credit Facility in an aggregate
principal amount not to exceed $800 million;
(c) Indebtedness of the Company and the Restricted Subsidiaries
incurred pursuant to Interest Rate Protection Obligations and foreign
exchange contracts, currency swaps or similar agreements;
(d) Indebtedness between and among the Company and the Restricted
Subsidiaries or between and among any of the Restricted Subsidiaries;
(e) Capitalized Lease Obligations and Purchase Money Indebtedness of
the Company and the Restricted Subsidiaries, in each case with respect to
the acquisition after the Issue Date of Productive Assets;
(f) Indebtedness of the Company and the Restricted Subsidiaries
resulting from the endorsement of negotiable instruments in the ordinary
course of business;
(g) replacements, renewals, refinancings and extensions of
Indebtedness outstanding on the Issue Date (other than any Indebtedness to
be repaid or retired with the net proceeds from the sale of the
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Securities) and Indebtedness incurred or permitted in compliance with
clauses (a), (e) and (i) of this covenant; provided that the principal
amount of Indebtedness incurred pursuant to this clause (g) (or, if such
Indebtedness provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration of the maturity
thereof, the original issue price of such Indebtedness) shall not exceed
the sum of the principal amount of Indebtedness so refinanced (or, if such
Indebtedness provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration of the maturity
thereof, the original issue price of such Indebtedness, plus any accreted
value attributable thereto since the original issuance of such
Indebtedness), plus the amount of any premium required to be paid in
connection with such replacement, renewal, refinancing or extension
pursuant to the terms of such Indebtedness or the amount of any premium
reasonably determined by the Company or the Restricted Subsidiary, as
applicable, as necessary to accomplish such replacement, renewal,
refinancing or extension by means of a tender offer or privately negotiated
purchase, plus the amount of fees and expenses in connection therewith;
(h) unsecured Indebtedness of the Company and the Restricted
Subsidiaries not exceeding $100 million in aggregate principal amount
outstanding at any time;
(i) Indebtedness of the Company and the Restricted Subsidiaries
secured by a Lien on accounts receivable of the Company and the Restricted
Subsidiaries in an aggregate principal amount not to exceed 85% of the face
amount of outstanding accounts receivable of the Company and such
Restricted Subsidiaries; and
(j) other Indebtedness of the Company and the Restricted Subsidiaries,
if at the time of and after giving pro forma effect to the incurrence of
such Indebtedness (including the application of the proceeds thereof) and
any Asset Acquisitions and any Asset Sales that occurred during the period
beginning four full fiscal quarters immediately prior to such incurrence as
though such events occurred on the first day of such period, the
Consolidated EBITDA Coverage Ratio for such four fiscal quarter period of
the Company is equal to or greater than 1.75:1.0.
For purposes of determining compliance with this "Limitation on Additional
Indebtedness" covenant, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness permitted by this
covenant, the Company in its sole discretion shall classify such item of
Indebtedness and only be required to include the amount of such Indebtedness as
one of such types.
Limitation on Consolidations, Mergers and Sales of Assets. The Indentures
provide that the Company will not, and will not permit any of the Restricted
Subsidiaries to, consolidate with or merge with or into any other Person or
sell, assign, convey, lease or transfer all or substantially all of its
properties and assets in a single transaction or through a series of
transactions, if such transaction or series of transactions would result in a
sale, conveyance, lease, transfer or other disposition of all or substantially
all of the properties and assets of the Company and the Restricted Subsidiaries,
taken as a whole, unless: (i) the resulting, surviving or transferee Person (the
"surviving entity") shall be a corporation organized and existing under the laws
of the United States or any State thereof or the District of Columbia; (ii) the
surviving entity shall expressly assume, by supplemental indentures executed and
delivered to the Trustees, in form and substance reasonably satisfactory to such
Trustees, all of the obligations of the Company under the Indentures and the
Securities and the Registration Rights Agreements; (iii) immediately after
giving effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, giving effect to any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such transaction
or series of transactions), no Default shall have occurred and be continuing
under the Indentures; (iv) the Company or the surviving entity (if the
transaction or series of transactions involves the Company) shall have delivered
to the Trustees under the Indentures an Officer's Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if supplemental indentures are required in connection with such
transaction or series of transactions, each such supplemental indenture complies
with this covenant and that all conditions precedent in the Indentures relating
to the transaction or series of transactions have been satisfied; and (v) the
Company or the surviving entity (if the transaction or series of transactions
involves the Company) shall immediately after giving effect to such transaction
or series of transactions on pro forma basis (including, without limitation,
giving effect to any Indebtedness incurred or anticipated to be incurred in
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connection with or in respect of the transaction or series of transactions) be
permitted to incur $1.00 of additional Indebtedness under clause (j) of the
"Limitation on Additional Indebtedness" covenants and other applicable
restrictions on additional Indebtedness.
Upon any consolidation or merger of the Company or any transfer of all or
substantially all of the assets of the Company in accordance with the foregoing,
in which the Company is not the continuing corporation, the successor
corporation formed by such a consolidation or into which the Company is merged
or to which such transfer is made, shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under the applicable
Indenture and the Securities and the Registration Rights Agreements, with the
same effect as if such successor corporation had been named as the Company
therein; and thereafter, except in the case of (a) a lease or (b) any sale,
assignment, conveyance, transfer, lease or other disposition to a Restricted
Subsidiary of the Company, the Company shall be discharged from all obligations
and covenants under the Indentures and the Securities.
The Indentures will provide that for all purposes of the Indentures and the
Securities (including the provision of this covenant and the covenants described
in "-- Limitation on Additional Indebtedness" and "-- Limitations on Liens"),
Subsidiaries of any Surviving Entity shall, upon such transaction or series of
related transactions, become Restricted Subsidiaries unless and until designated
as Unrestricted Subsidiaries pursuant to and in accordance with "-- Limitation
on Designations of Unrestricted Subsidiaries."
Limitation on Liens. The Indentures provide that the Company and the
Restricted Subsidiaries will not, directly or indirectly, incur any consensual
Lien to secure Indebtedness, other than Permitted Liens, upon any of their
property or assets owned or acquired on or after the Issue Date unless (i) where
such Lien secures Indebtedness ranking pari passu with the applicable
Securities, excluding Indebtedness under the Senior Credit Facility, all
payments due under the applicable Indenture and the applicable Securities are
secured on an equal and ratable basis with the obligations so secured until such
time as such obligation is no longer secured by a Lien, or (ii) where such Lien
secures Subordinated Indebtedness, the applicable Securities are secured by a
Lien on such property or assets that is senior in priority to the Lien securing
such Subordinated Indebtedness. Any Lien which secures the Securities shall
automatically and unconditionally be released upon the release or discharge of
the Lien which resulted in the creation of such Lien with respect to the
applicable Securities, except a discharge or release by or as a result of
foreclosure on the subject collateral.
Limitation on Designations of Unrestricted Subsidiaries. The Indentures
provide that the Company may designate after the Issue Date any Subsidiary as an
"Unrestricted Subsidiary" under the Indenture (a "Designation") only if:
(a) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation; and
(b) the Company would be permitted under the Indentures to incur $1.00
of additional Indebtedness pursuant to clause (j) of the covenant described
under "-- Limitation on Additional Indebtedness" at the time of such
Designation (assuming the effectiveness of such Designation).
The Company may revoke any Designation of a Subsidiary as an Unrestricted
Subsidiary (a "Revocation") if:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of the
Indentures.
All Designations and Revocations must be evidenced by Board Resolutions of
the Company delivered to the applicable Trustee together with an officer's
certificate certifying compliance with the foregoing provisions. Any Receivables
Subsidiary shall at all times be an Unrestricted Subsidiary and each of WPSI
Inc. and Alamac Sub Holdings Inc. shall initially constitute an Unrestricted
Subsidiary.
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Limitation on Sale and Leaseback Transactions. The Indentures provide that
the Company will not, and will not permit any of the Restricted Subsidiaries to,
enter into after the Issue Date any arrangement with any Person providing for
the leasing to the Company or any such Restricted Subsidiary of any real or
tangible personal property (except for leases between or among the Company and
any of the Restricted Subsidiaries), which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person in
contemplation of such leasing (a "Sale/Leaseback Transaction"), unless (a) the
Company or such Restricted Subsidiary would be entitled under either clause (f)
or would be entitled under clause (j) of the covenant described under
"-- Limitation on Additional Indebtedness" to incur Indebtedness in an amount
equal to the Attributable Indebtedness with respect to such arrangement and (b)
the gross proceeds of any such sale are at least equal to the Fair Market Value
of such property.
EVENTS OF DEFAULT
The following are Events of Default ("Events of Default") under the
Indentures:
(a) default in the payment of any interest on the Securities when it
becomes due and payable, and continuance of any such default for a period
of 30 days; or
(b) default in the payment of the principal of, or premium, if any, on
the Securities issued thereunder, when due, at maturity, upon redemption,
pursuant to an offer to purchase required under the applicable Indenture
pursuant to the Change of Control provisions or otherwise, by acceleration
or otherwise; or
(c) the Company fails to comply with any of its obligations described
under "-- Consolidation, Merger, Sale of Assets, Etc." or "-- Change of
Control;" or
(d) the Company fails to perform or observe any other term, covenant
or agreement contained in the applicable Securities or Indenture (other
than a default specified in (a), (b) or (c) above) for a period of 45 days
after written notice of such failure requiring the Company to remedy the
same shall have been given (x) to the Company by the applicable Trustee or
(y) to the Company and the applicable Trustee by the holders of 25% in
aggregate principal amount of the applicable Securities then outstanding;
or
(e) default or defaults under one or more agreements, indentures or
instruments under which the Company or any Restricted Subsidiary then has
outstanding Indebtedness in excess of $25 million individually or in the
aggregate and either (a) such Indebtedness is already due and payable in
full or (b) such default or defaults results in the acceleration of the
maturity of such Indebtedness; or
(f) one or more judgments, orders or decrees for the payment of money
in excess of $25 million (to the extent not covered by insurance), either
individually or, in an aggregate amount, shall be entered against the
Company or any Restricted Subsidiary or any of their respective properties
and shall not be paid, discharged or fully bonded and there shall have been
a period of 60 days during which a stay of enforcement of such judgment or
order, by reason of pending appeal or otherwise, shall not be in effect; or
(g) certain events of bankruptcy or insolvency with respect to the
Company or any Significant Subsidiary shall have occurred.
If an Event of Default (other than an Event of Default specified in clause
(g) above with respect to the Company) occurs and is continuing, then the
Holders of at least 25% in aggregate principal amount of the applicable
Securities outstanding may, by written notice, and the applicable Note Trustee
upon the request of the Holders of not less than 25% in aggregate principal
amount of the applicable Securities outstanding shall, declare the principal of,
premium, if any, and accrued interest on, all the applicable Securities to be
due and payable immediately. Upon any such declaration such amounts shall become
due and payable immediately. If an Event of Default specified in clause (g)
above with respect to the Company occurs and is continuing, then the principal
of, premium, if any, and accrued interest on, all the Securities shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of either Trustee or any Holder of either Securities. In the
event of an acceleration because an Event of Default set forth in clause (e)
above
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has occurred and is continuing, such acceleration shall be automatically
rescinded and annulled if the event of default triggering such Event of Default
pursuant to clause (e) shall be remedied, cured by the Company or such
Restricted Subsidiary or waived by the holders of the relevant Indebtedness
within 60 days after the acceleration with respect thereto.
After a declaration of acceleration, the Holders of a majority in aggregate
principal amount of the applicable issue of outstanding Securities may, by
notice to the applicable Trustee, rescind such declaration of acceleration if
all existing Events of Default have been cured or waived, other than nonpayment
of principal of, premium, if any, and accrued interest on such Securities, that
has become due solely as a result of the acceleration thereof, and if the
rescission of acceleration would not conflict with any judgment or decree. Past
defaults under an Indenture (except a default in the payment of the principal
of, premium, if any, or interest on any Security issued thereunder or in respect
of a covenant or a provision which cannot be modified or amended without the
consent of all holders of such Securities) may be waived by the Holders of a
majority in aggregate principal amount of the applicable issue of outstanding
Securities.
No Holder of any Security has any right to institute any proceeding with
respect to the applicable Indenture or any remedy thereunder, unless the Holders
of at least 25% in aggregate principal amount of the applicable issue of
outstanding Securities have made written request, and offered reasonable
indemnity, to the applicable Trustee to institute such proceeding as Trustee,
such Trustee has failed to institute such proceeding within 60 days after
receipt of such notice and such Trustee has not within such 60-day period
received directions inconsistent with such written request by holders of a
majority in aggregate principal amount of the applicable issue of Securities.
Such limitations do not apply, however, to a suit instituted by a Holder of a
Security for the enforcement of the payment of the principal of, premium, if
any, or accrued interest on, such Security on or after the respective due dates
expressed in such Security.
During the existence of an Event of Default under the Indentures, the
applicable Trustee is required to exercise such rights and powers vested in it
under the applicable Indenture and use the same degree of care and skill in its
exercise thereof as a prudent Person would exercise under the circumstances in
the conduct of such Person's own affairs. Subject to the provisions of the
Indentures relating to the duties of the Trustee, in case an Event of Default
shall occur and be continuing under an Indenture, the applicable Trustee is not
under any obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders shall
have offered to such Trustee reasonable security or indemnity. Subject to
certain provisions of the Indentures concerning the rights of the Trustees, the
Holders of a majority in aggregate principal amount of the applicable issue of
outstanding Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustees under the
Indentures, or exercising any trust, or power conferred on the Trustees.
CHANGE OF CONTROL TRIGGERING EVENT
In the event of a Change of Control Triggering Event (the date of such
occurrence being the "Change of Control Date"), the Company will notify the
Holders in writing of such occurrence and will make an offer to purchase (the
"Change of Control Offer"), on a business day (the "Change of Control Payment
Date") not later than 90 days following the Change of Control Date, all
Securities then outstanding at a purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the Change of
Control Payment Date. Notice of a Change of Control Offer shall be mailed by the
Company to the Holders not less than 30 days nor more than 45 days before the
Change of Control Payment Date. The Change of Control Offer is required to
remain open for at least 20 business days and until the close of business on the
Change of Control Payment Date. It is anticipated that a Change of Control will
constitute an event of default under the Senior Credit Facility, which will
allow the Banks to accelerate their loans and to require the Company to prepay
all of its obligations under the Senior Credit Facility. A Change of Control
will not constitute an event of default under any other Indebtedness of the
Company.
The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act, and any other applicable securities laws
or regulations and any applicable requirements of any securities exchange on
which the Securities are listed, in connection with the repurchase of Securities
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pursuant to a Change of Control Offer, and any violation of the provisions of
the Indenture relating to such Change of Control Offer occurring as a result of
such compliance, shall not be deemed a Default under the Indenture. Neither the
Board of Directors nor a Trustee may waive the Company's obligations to
repurchase the applicable issue of Securities upon a Change of Control
Triggering Event.
There can be no assurance that the Company will have sufficient funds to
purchase the Securities upon a Change of Control Triggering Event. With respect
to the sale of assets, the phrase "all or substantially all" as used in the
Indentures (including as set forth under "-- Certain Covenants -- Limitations on
Consolidations, Mergers and Sale of Assets") varies according to the facts and
circumstances of the subject transaction, has no clearly established meaning
under New York law (which will govern the Indentures) and is subject to judicial
interpretation. Accordingly, in certain circumstances there may be a degree of
uncertainty in ascertaining whether a particular transaction would involve a
disposition of "all or substantially all" of the assets of a person, and,
therefore, the ability of the holders of Securities to require a purchaser of
the assets of the Company to assume all of the Company's obligations under the
Indentures may be uncertain.
REPORTS
Pursuant to the Indentures, the Company will file with each Trustee, within
15 days after filing with the Commission, copies of the annual and quarterly
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) which the Company files with the Commission pursuant to Section 13 or
15(d) of the Exchange Act. If the Company is no longer subject to these periodic
reporting requirements of the Exchange Act, it will nonetheless continue to file
reports with, each Trustee as if it were subject to such periodic reporting
requirements. Regardless of whether the Company is required to furnish such
reports to its stockholders pursuant to the Exchange Act, the Company shall
cause such reports containing financial information to be mailed to the holders
of the Securities within 15 days after filing such report with the Commission.
Such financial information shall include annual reports containing consolidated
financial statements and notes thereto, together with an opinion thereon
expressed by an independent public accounting firm, management's discussion and
analysis of financial condition and results of operations as well as quarterly
reports containing unaudited condensed consolidated financial statements for the
first three quarters of each fiscal year.
DEFEASANCE
The Company may at any time terminate all of its obligations with respect
to an Indenture ("defeasance"), except for certain obligations, including those
regarding any trust established for a defeasance and obligations to register the
transfer or exchange of the Securities issued thereunder, to replace mutilated,
destroyed, lost or stolen Securities issued thereunder and to maintain agencies
in respect of the Securities issued thereunder. The Company may at any time
terminate its obligations under certain covenants set forth in an Indenture,
some of which are described under "-- Certain Covenants" above, and any omission
to comply with such obligations shall not constitute a Default with respect to
the Securities ("covenant defeasance"). In order to exercise either defeasance
or covenant defeasance, the Company must irrevocably deposit in trust, for the
benefit of the Holders with the applicable Trustee money or U.S. government
obligations, or a combination thereof, in such amounts as will be sufficient to
pay the principal of, premium, if any, and interest on the Senior Notes to
redemption or maturity and comply with certain other conditions, including the
delivery of an opinion as to certain tax matters.
SATISFACTION AND DISCHARGE
The Company may discharge an Indenture, which will cease to be of further
effect (except as to surviving rights or registration of transfer or exchange of
Securities issued thereunder) as to all outstanding Securities issued
thereunder, when either (a) all such Securities theretofore authenticated and
delivered (except lost, stolen or destroyed Securities which have been replaced
or paid) have been delivered to the applicable Trustee for cancellation; or
(b)(i) all such Securities not theretofore delivered to the applicable Trustee
for cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the applicable Trustee as trust funds
in trust for the purpose an amount of money sufficient to
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pay and discharge the entire indebtedness on such Securities not theretofore
delivered to such Trustee for cancellation, for principal, premium, if any, and
accrued interest to the date of maturity or redemption; and (ii) the Company has
delivered irrevocable instructions to the applicable Trustee to apply the
deposited money toward the payment of such Securities at maturity or the
redemption date, as the case may be. In addition, the Company must deliver an
Officers' Certificate and an Opinion of Counsel to the applicable Trustee
stating that all conditions precedent to satisfaction and discharge have been
complied with.
CONSENTS, WAIVERS AND MODIFICATIONS
From time to time, the Company, when authorized by resolutions of its Board
of Directors, and the Trustees may, without the consent of the Holders of the
Securities, amend, waive or supplement an Indenture or the Securities issued
thereunder for certain specified purposes, including, among other things, curing
ambiguities, defects or inconsistencies, maintaining the qualification of the
Indentures under the Trust Indenture Act, or making any change that does not
adversely affect the rights of any Holder of Securities issued thereunder;
provided, however, that the Company shall have delivered to the Trustees an
Opinion of Counsel stating that such change does not materially and adversely
affect the rights of any such Securityholder. Other amendments and modifications
of the Indentures or the Securities may be made by the Company and Trustees with
the consent of the Holders of not less than a majority of the outstanding
aggregate principal amount of the applicable issue of Securities; provided,
however, that no such modification or amendment may, without the consent of the
Holder of each outstanding Senior Note due 2005 or Senior Note due 2008, as the
case may be, affected thereby, (i) reduce the principal amount of, extend the
fixed maturity of, or alter the redemption provisions of such Securities, (ii)
change the currency in which such Securities or any premium or the interest
thereon is payable, (iii) reduce the percentage in outstanding principal amount
of such Securities which must consent to an amendment, supplement or waiver or
consent to take any action under such Securities or the applicable Indenture,
(iv) impair the right to institute suit for the enforcement of any payment on or
with respect to such Securities, (v) upon the occurrence of a Change of Control,
alter the Company's obligation to purchase such Securities in accordance with
the applicable Indenture or waive any default in the performance thereof, (vi)
waive a default in payment with respect to such Securities, (vii) reduce or
change the rate or time for payment of interest on such Securities, or (viii)
affect the ranking of such Securities.
REGARDING THE TRUSTEE
The Bank of New York will serve as Senior Note due 2005 Trustee under the
Senior Note due 2005 Indenture and as Senior Note due 2008 Trustee under the
Senior Note due 2008 Indenture.
CERTAIN DEFINITIONS
Set forth below is a summary of certain defined terms used in each of the
Indentures (except as noted). Reference is made to the Indentures for the full
definition of all such terms, as well as any other capitalized terms used herein
for which no definition is provided.
"8 3/4% Senior Notes" means the Company's 8 3/4% Senior Notes due 2001.
"9 3/8% Senior Subordinated Debentures" means the Company's 9 3/8% Senior
Subordinated Debentures due 2005.
"Acquired Indebtedness" means Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary or assumed in connection with an
Asset Acquisition of such Person, including, without limitation, Indebtedness
incurred in connection with, or in anticipation of, such Person's becoming a
Restricted Subsidiary or such acquisition.
"Affiliate" means, with respect to any specified Person, any other Person
which, directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting
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securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) or Investment by the
Company or any Restricted Subsidiary to or in any other Person, or purchase or
acquisition of Capital Stock, by the Company or any of its Restricted
Subsidiaries of any other Person, in either case pursuant to which such other
Person shall become a Restricted Subsidiary of the Company or any of the
Restricted Subsidiaries or shall be merged with or into the Company or any of
the Restricted Subsidiaries or (ii) any acquisition by the Company or any of the
Restricted Subsidiaries of the assets of any Person which constitute
substantially all of an operating unit or business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
or other disposition to any Person other than the Company or a Restricted
Subsidiary, in one transaction or a series of related transactions (including by
way of sale and leaseback), of (i) any Capital Stock of any Restricted
Subsidiary or (ii) any other property or asset of the Company or any Restricted
Subsidiary outside of the ordinary course of business. The term "Asset Sale"
shall not include (a) any sale by the Company of its Capital Stock, (b) sales of
inventory, rental assets and real estate held for sale in the ordinary course of
business in accordance with past practices, (c) Capitalized Lease Obligations or
(d) sales of receivables as contemplated by the Trade Receivables Facility.
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the applicable, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"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 of the Company, and to be in full force and effect on the date of
such certification, and delivered to the applicable Trustee.
"Capital Stock" means, with respect to any Person, any and all shares,
partnership interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, any Person, whether outstanding
on the Issue Date or issued after the Issue Date, and any and all rights,
warrants or options exchangeable for or convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) any
property (whether real, personal or mixed) that is required to be classified and
accounted for as a capital lease obligation under GAAP, and, for the purpose of
the Indentures, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) investments in direct obligations of the
United States government maturing within one year of the date of acquisition,
(ii) investments in certificates of deposit and money market deposits maturing
within one year of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States, any State
thereof, the District of Columbia or any foreign jurisdiction having capital,
surplus and undivided profits aggregating in excess of $200 million, (iii)
repurchase obligations with a term of not more than 90 days for direct
obligations of the United States government or entered into with a bank meeting
the qualifications described in clause (ii) above, (iv) investment in commercial
paper given the highest rating by Standard & Poor's and Moody's and maturing not
more than one year from the date of acquisition, (v) investments in mutual funds
which invest exclusively in items described in (i)-(iv) above and (vi) demand
deposit accounts maintained in the ordinary course of business.
"Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is
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exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Stock of the Company; or (b)
the Company consolidates with, or merges with or into, another person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any person or any person 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 converted into or
exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of the Company is converted
into or exchanged for (1) Voting Stock (other than Disqualified Stock) of the
surviving or transferee corporation or its parent corporation and/or (2) cash,
securities and other property in an amount which could be paid by the Company as
a Restricted Payment under the applicable Indenture and (ii) immediately after
such transaction no "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities 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 total
Voting Stock of the surviving or transferee corporation or its parent
corporation, as applicable; or (c) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board (together
with any new directors whose election by the Board or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board then in
office.
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Decline.
"Consolidated Adjusted Net Income" means, for any period, the consolidated
net income (or loss) of the Company and the Restricted Subsidiaries for such
period as determined in accordance with GAAP, adjusted, to the extent included
in calculating such net income, by excluding, without duplication, (i) all
extraordinary gains or losses, (ii) the net income of any Person combined with
the Company or one of the Restricted Subsidiaries on a "pooling of interests"
basis attributable to any period prior to the date of combination, (iii) any
gain or loss realized upon the termination of any employee pension benefit plan
(on an after-tax basis), (iv) gains in respect of any Asset Sales by the Company
or one of the Restricted Subsidiaries (on an after-tax basis), (v) the net
income of any Restricted Subsidiary to the extent that the declaration of
dividends or the making of distributions by that Restricted Subsidiary of that
income is not at the time permitted, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, law, rule or governmental regulations applicable to that Restricted
Subsidiary or its stockholders, (vi) the effect of any charge taken in
connection with the Financing Transactions, (vii) the amortization of goodwill,
(viii) the non-cash portion of any income taxes accrued in accordance with GAAP
for such period and (ix) all non-cash extraordinary, unusual or non-recurring
charges for which no cash accrual is required.
"Consolidated EBITDA" means, for any period, the Consolidated Adjusted Net
Income of the Company and the Restricted Subsidiaries for such period increased
to the extent deducted in determining Consolidated Adjusted Net Income by the
sum of: (i) all income taxes of the Company and the Restricted Subsidiaries paid
or accrued in accordance with GAAP for such period (other than income taxes
attributable to extraordinary, unusual or non-recurring gains or losses); (ii)
all interest expense of the Company and the Restricted Subsidiaries paid or
accrued for such period (including amortization of original issue discount and
interest with respect to Capitalized Lease Obligations); (iii) the aggregate
amount of cash dividends and other distributions declared, or paid on Capital
Stock other than Common Stock of the Company and the Restricted Subsidiaries for
the period; (iv) depreciation expense of the Company and the Restricted
Subsidiaries; (v) amortization expense of the Company and the Restricted
Subsidiaries including, without limitation, amortization of capitalized debt
issuance costs; and (vi) any other non-cash charges of the Company and the
Restricted Subsidiaries to the extent deducted in determining the Consolidated
Adjusted Net Income of the Company, all determined on a consolidated basis in
accordance with GAAP.
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"Consolidated EBITDA Coverage Ratio" means the ratio of (i) Consolidated
EBITDA of the Company for the four full fiscal quarters for which financial
statements are available that immediately precede the date of the transaction or
other circumstances giving rise to the need to calculate the Consolidated EBITDA
Coverage Ratio (the "Transaction Date") to (ii) the sum of (a) all interest
expense of the Company and the Restricted Subsidiaries paid or accrued
(including amortization of original issue discount and interest with respect to
Capitalized Lease Obligations) and (b) the aggregate amount of cash dividends
and other distributions declared or paid on Disqualified Stock of the Company
and the Restricted Subsidiaries, in each case for such four full fiscal quarter
period. For purposes of this definition, if the Transaction Date occurs prior to
the date on which the Company's consolidated financial statements for the four
full fiscal quarters subsequent to the Issue Date are first available,
"Consolidated EBITDA" and the items referred to in the preceding clause (ii)
shall be calculated after giving effect on a pro forma basis as if the
applicable issue of Securities outstanding on the Transaction Date were issued
on the first day of such four full fiscal quarter period. In addition to and
without limitation of the foregoing, for purposes of this definition,
"Consolidated EBITDA" and the items referred to in the preceding clause (ii)
shall be calculated after giving effect on a pro forma basis for the period of
such calculation to (i) the incurrence of any Indebtedness of the Company or any
of the Restricted Subsidiaries at any time during the period (the "Reference
Period") (A) commencing on the first day of the four full fiscal quarter period
for which financial statements are available that precedes the Transaction Date
and (B) ending on and including the Transaction Date, including, without
limitation, the incurrence of the Indebtedness giving rise to the need to make
such calculation, as if such incurrence occurred on the first day of the
Reference Period; and (ii) any Asset Sales or Asset Acquisitions (including,
without limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of the Company or any of the Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring Acquired Indebtedness) occurring during the
Reference Period and any retirement of Indebtedness in connection with such
Asset Sales, as if such Asset Sale or Asset Acquisition and/or retirement
occurred on the first day of the Reference Period. Furthermore, in calculating
the denominator (but not the numerator) of the Consolidated EBITDA Coverage
Ratio, (1) interest on Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to accrue at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; and (2) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Rate
Protection Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements. If the
Company or any of the Restricted Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, this definition shall give effect to the
incurrence of such guaranteed Indebtedness as if the Company or Restricted
Subsidiary had directly incurred such guaranteed Indebtedness.
"Debt Securities" means any debt securities (including any guarantee of
such securities) issued by the Company and/or any Restricted Subsidiary in
connection with a public offering (whether or not underwritten) or a private
placement (provided such private placement is underwritten for resale pursuant
to Rule 144A, Regulation S or otherwise under the Securities Act or sold on an
agency basis by a broker-dealer or one of its Affiliates to 10 or more
beneficial holders).
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
of such Person which, by its terms (or by the terms of any security into which
it is convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable (in each case, other than into
common stock of the Company), pursuant to a sinking fund obligation or
otherwise, or is exchangeable for Indebtedness, or is redeemable at the option
of the holder thereof, in whole or in part, on or prior to the final Maturity
Date of the specified Security. Notwithstanding the foregoing, in no event shall
Capital Stock that is considered Disqualified Stock solely by reason of such
Capital Stock being convertible at the option of the holder of such capital
stock into other Capital Stock (other than Disqualified Stock) constitute
Disqualified Stock.
"Duff & Phelps" means Duff and Phelps Credit Rating Co. and its successors.
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"Fair Market Value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are applicable as of the date of
determination. The Company may, by notice to the applicable Trustee, elect to
use GAAP principles as in effect on the date of such election.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered on the Registrar's books, as the context requires.
"incur" means, with respect to any Indebtedness, to directly or indirectly
create, incur, assume, unconditionally guarantee or in any manner become liable
for such Indebtedness, whether contingently or otherwise, provided that neither
the accrual of interest nor the acquisition of original issue discount shall be
considered an incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all obligations for borrowed money, (ii) all obligations evidenced by bonds,
Securities, notes or other similar instruments, (iii) all Capitalized Lease
Obligations, (iv) all obligations issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations under
any title retention agreement which purchase price is due more than six months
from the date of incurrence (but excluding trade accounts payable arising in the
ordinary course of business), (v) all obligations issued or contracted for as
payment in consideration of the purchase by such Person of the stock or
substantially all the assets of another Person or a merger or consolidation,
(vi) all obligations for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transactions entered into in the
ordinary course of business, (vii) all obligations of the type referred to in
clauses (i) through (vi) of other Persons and all dividends of other Persons for
the payment of which, in either case, such Person is directly or indirectly
responsible or liable as obligor, guarantor or otherwise and (viii) all
obligations of the type referred to in clauses (i) through (vii) of other
Persons which are secured by any Lien on any property or asset of such Person,
the amount of such obligation being deemed to be the lesser of the value of such
property or asset or the amount of the obligation so secured. For purposes of
the "Limitation on Additional Indebtedness" covenant, "Indebtedness" shall
include all Capital Stock that is (i) in the case of any Restricted Subsidiary,
not common stock of such Restricted Subsidiary and (ii) Disqualified Stock of
the Company.
"Interest Rate Protection Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include without limitation, interest rate swaps, caps,
floors, collars and similar agreements.
"Lien" means any mortgage, lien (statutory or other), pledge, security
interest, encumbrance, claim, hypothecation, assignment for security, or
preference or other security agreement of any kind or nature whatsoever. For
purposes of the Indenture, a Person shall be deemed to own subject to a Lien any
property which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to Indebtedness of such Person.
"Make-Whole Premium" means, with respect to any Security at any Redemption
Date, the excess, if any, of (a) the aggregate present value of the sum of the
principal amount and premium of such Securities, discounted on a semi-annual
bond equivalent basis from such Redemption Date to June 15, 2005 in the case of
the Senior Notes due 2005, or to June 15, 2008 in the case of the Senior Notes
due 2008, at a per annum interest equal to the sum of the Treasury Yield
(determined on the Business Day immediately preceding the date of such
redemption or declaration of accelerated payment) plus (i) 37.5 basis points, in
the case of the
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Senior Notes due 2005 and (ii) 50.0 basis points, in the case of the Senior
Notes due 2008, over (b) the aggregate principal amount of the Security being
redeemed or paid.
"Maturity Date" means, with respect to any Security, the date on which any
principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Permitted Liens" means (a) Liens on property of (or on shares of Capital
Stock or debt securities of) a Person existing at the time such Person (i) is
merged into or consolidated with the Company or any Restricted Subsidiary or
(ii) becomes a Restricted Subsidiary; provided, however, that such Liens were in
existence prior to the contemplation of such merger, consolidation or
acquisition and do not secure any property or assets of the Company or any
Restricted Subsidiary other than the property or assets subject to the Liens
prior to such merger, consolidation or acquisition; (b) Liens existing on the
Issue Date; (c) Liens in favor of the Company or Liens on any property or assets
of a Subsidiary (or on shares of Capital Stock or debt securities of a
Subsidiary) in favor of the Company or any Restricted Subsidiary; (d) Liens
resulting from the deposit of cash or notes in connection with contracts,
tenders or expropriation proceedings, or to secure workers' compensation, surety
or appeal bonds, costs of litigation when required by law, public and statutory
obligations, obligations under franchise arrangements entered into in the
ordinary course of business and other obligations of a similar nature arising in
the ordinary course of business; (e) Liens securing Indebtedness under the
Senior Credit Facility; (f) Liens securing Indebtedness consisting of
Capitalized Lease Obligations, Purchase Money Indebtedness, mortgage financings,
industrial revenue bonds or other monetary obligations, in each case incurred
solely for the purpose of financing all or any part of the purchase price or
cost of construction or installation of assets used in the business of the
Company or the Restricted Subsidiaries, or repairs, additions or improvements to
such assets; provided, however, that (I) such Liens secure Indebtedness in an
amount not in excess of the original purchase price or the original cost of any
such assets or repair, addition or improvement thereto (plus an amount equal to
the reasonable fees and expenses in connection with the incurrence of such
Indebtedness), (II) such Liens do not extend to any other assets of the Company
or any of the Restricted Subsidiaries (and, in the case of repair, addition or
improvements to any such assets, such Lien extends only to the assets (and
improvements thereto or thereon) repaired, added to or improved), (III) the
incurrence of such Indebtedness is permitted by "-- Certain
Covenants -- Limitation on Additional Indebtedness" above and (IV) such Liens
attach prior to 270 days after such purchase, construction, installation,
repair, addition or improvement; (g) Liens to secure any refinancings (or
successive refinancings), in whole or in part, of any Indebtedness secured by
Liens referred to in the clauses above so long as such Lien does not extend to
any other property (other than improvements thereto); (h) Liens securing letters
of credit entered into in the ordinary course of business and consistent with
past business practice; (i) Liens on and pledges of the capital stock of any
Unrestricted Subsidiary; (j) Liens arising from the rendering of a judgment or
order against the Company or any Restricted Subsidiary that does not give rise
to an Event of Default; (k) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods entered
into by the Company or any Restricted Subsidiary in the ordinary course of
business; (l) Liens arising out of any sale of accounts receivable in the
ordinary course to or by a Receivables Subsidiary; (m) Liens on acquired
property or assets of a Restricted Subsidiary to secure Indebtedness of such
Restricted Subsidiary (other than Indebtedness evidenced by Disqualified Stock)
or a guarantee thereof; provided, however, that such Liens were not created in
contemplation of such acquisition; (n) Liens to secure the Indebtedness
described in clause (i) under "-- Certain Covenants -- Limitation on Additional
Indebtedness"; and (o) Liens on assets of Restricted Subsidiaries to secure
Indebtedness of the Company and the Restricted Subsidiaries (other than Debt
Securities).
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Productive Assets" means assets of a kind used or usable in the business
of the Company and the Restricted Subsidiaries.
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"Purchase Money Indebtedness" means Indebtedness of the Company or any
Restricted Subsidiary (i) issued to finance or refinance (including any
extensions or renewals) the purchase or construction of any assets of the
Company or any Restricted Subsidiary or (ii) secured by a Lien on any assets of
the Company or any Restricted Subsidiary where the lender's sole recourse is to
the assets so encumbered in either case to the extent (a) the purchase or
construction costs for such assets are included as an asset on the balance sheet
of the Company in accordance with GAAP and (b) the purchase or construction of
such assets is not part of any acquisition of a Person or a business unit.
"Rating Agencies" means (i) Standard & Poor's, (ii) Moody's and (iii) Duff
& Phelps.
"Rating Category" means (i) with respect to Standard & Poor's, any of the
following categories: BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: Ba,
B, Caa, Ca, C and D (or equivalent successor categories); and (iii) with respect
to Duff & Phelps BB, B, CCC and D (or equivalent successor categories). In
determining whether the rating of the applicable Securities has decreased by one
or more gradations, gradations within Rating Categories (+ and - for Standard &
Poor's; 1, 2 and 3 for Moody's; or + and - for Duff & Phelps) shall be taken
into account (e.g., with respect to Standard & Poor's, a decline in a rating
from BB+ to BB, as well as from BB- to B+, will constitute a decrease of one
gradation).
"Rating Date" means the date which is 90 days prior to the earlier of (i) a
Change of Control and (ii) public notice of the occurrence of a Change of
Control or of the intention by the Company to effect a Change of Control.
"Rating Decline" means the occurrence of the following on, or within 90
days after, the earlier of (i) the occurrence of a Change of Control and (ii)
the date of public notice of the occurrence of a Change of Control or of the
public notice of the intention of the Company to effect a Change of Control
(which period shall be extended so long as the rating of the applicable
Securities is under publicly announced consideration for possible downgrading by
any two of the Rating Agencies): (a) in the event that the applicable Securities
have an Investment Grade Rating, the rating of the applicable Securities by two
of such Rating Agencies shall be reduced below Investment Grade, or (b) in the
event the applicable Securities are rated below Investment Grade by two of such
Rating Agencies on the Rating Date, the rating of the applicable Securities by
any of two Rating Agencies shall be decreased by one or more gradations
(including gradations within Rating Categories as well as between Rating
Categories).
"Receivables Subsidiary" means a bankruptcy-remote Subsidiary of the
Company party to a Trade Receivables Facility. The term "bankruptcy remote"
means that the Receivables Subsidiary's charter and by-laws and certain other
documentation relating to a Trade Receivables Facility will contain provisions
that are intended to prevent such Subsidiary from becoming subject to a
voluntary or involuntary bankruptcy proceeding. These provisions may include a
requirement of one or more directors who are not otherwise affiliated with the
Company.
"Redemption Date" means, with respect to any Security to be redeemed, the
date fixed by the Company for such redemption pursuant to the applicable
Indenture and Securities.
"Restricted Subsidiaries" means all of the Company's existing and future
Subsidiaries that are not designated Unrestricted Subsidiaries on the Issue Date
or in accordance with the covenant "Limitation on Designations of Unrestricted
Subsidiaries."
"Senior Credit Facility" means the Amended and Restated Credit Agreement
dated as of June 9, 1998, among the Company, the financial institutions party
thereto in their capacities as lenders thereunder and Nationsbank, N.A., as
Administrative Agent for the banks, as the same may be amended from time to time
and increased in compliance with the covenant "Limitation on Incurrence of
Additional Indebtedness", and any agreement evidencing (whether initial or
successive) one or more refinancings, modifications, replacements, renewals,
restatements, refundings, deferrals, extensions, substitutions, supplements,
reissuances or resales thereof.
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"Significant Subsidiary" means, at any particular time, any Restricted
Subsidiary that (a) accounted for more than 10% of the consolidated revenues or
Consolidated EBITDA of the Company and the Restricted Subsidiaries on a
consolidated basis for the most recently completed fiscal year of the Company or
(b) was the owner of more than 10% of the consolidated assets of the Company and
the Restricted Subsidiaries on a consolidated basis as at the end of such fiscal
year, all as shown on the consolidated financial statements of the Company and
the Restricted Subsidiaries for such fiscal year.
"Standard & Poor's" means Standard & Poor's Ratings Service and its
successors.
"Subordinated Indebtedness" means Indebtedness of the Company which is
expressly subordinated in right of payment to the applicable Securities.
"Subsidiary" means, with respect to any Person, (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors shall at the time be owned,
directly or indirectly, by such Person, or (ii) any other Person of which at
least a majority of voting interest is at the time, directly or indirectly,
owned by such Person.
"Tender Offer Documents" means the Offer to Purchase dated April 29, 1998
relating to the 8 3/4% Senior Notes and 9 3/8% Senior Subordinated Debentures,
as the same may be amended or supplemented from time to time (other than the
Minimum Condition and Supplemental Indenture Condition set forth therein).
"Trade Receivables Facility" means the arrangements entered into or that
may be entered into by the Company or one or more of its Subsidiaries pursuant
to which the Company or one or more of its Subsidiaries may either transfer to
any other Person or grant a security interest in any trade or other receivables
(whether now existing or arising in the future) and any assets related to such
trade or other receivables including, without limitation, all collateral
securing such trade or other receivables and shall include any contributions of
trade or other receivables and related assets in exchange for the capital stock
of the Receivables Subsidiary and other capital contributions of trade or other
receivables and related assets to the Receivables Subsidiary.
"Treasury Yield" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled by and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two Business Days prior to the date
fixed for redemption (or, if such Statistical Release is no longer published,
any publicly available source of similar data)) most nearly equal to the then
remaining average life of the Securities; provided, that if the average life of
the Securities is not equal to the constant maturity of a United States Treasury
security for which a weekly average yield is given, the Treasury yield shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the average life of the Securities
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Unrestricted Subsidiary" means any Subsidiary of the Company designated as
such on the Issue Date and any other Subsidiary designated as such pursuant to
and in compliance with the covenant described under "-- Certain
Covenants -- Limitation on Designations of Unrestricted Subsidiaries." Any such
designation may be revoked by a Board Resolution of the Company delivered to the
Trustee, subject to the provisions of such covenant.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof to vote
in the election of members of the board of directors of such Person.
"Wholly Owned Subsidiary" means any Restricted Subsidiary, 100% of the
Capital Stock of which (other than shares of Capital Stock representing any
director's qualifying shares of investments by foreign nationals mandated by
applicable law not in any event to exceed 5% of the total outstanding Capital
Stock) is owned by the Company, by a Wholly Owned Restricted Subsidiary or by
the Company and a Wholly Owned Restricted Subsidiary.
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BOOK-ENTRY; DELIVERY AND FORM
Securities offered and sold to "qualified institutional buyers" ("QIBs") in
reliance on Rule 144A under the Securities Act will be represented by a single,
permanent Global Security in a definitive, fully registered book-entry form (the
"Rule 144A Global Security," and together with the Regulation S Global Security
(as defined below), the "Global Securities") which will be registered in the
name of Cede & Co., as nominee of DTC and deposited on behalf of purchasers of
the Securities represented thereby with a custodian for DTC for credit to the
respective accounts of the purchasers (or to such other accounts as they may
direct) at DTC.
Securities (a) originally purchased by or transferred to Accredited
Investors (as defined under "Notice to Investors") who are not QIBs or (b) held
by QIBs who elect to take physical delivery of their certificates instead of
holding their interest through the Rule 144A Global Security (and which are thus
ineligible to trade through DTC) (collectively referred to herein as the
"Non-Global Purchasers") will be issued in fully registered form ("Certificated
Securities"). Upon the transfer of such Certificated Securities to a QIB or in
an offshore transaction under Rule 903 or 904 under Regulation S, such
Certificated Securities will, unless such Global Security has previously been
exchanged in whole for Certificated Securities, be exchanged for an interest in
a Global Security upon delivery of appropriate certifications to the Trustee.
For a description of the restrictions on the transfer of Certificated Securities
and any interest in the Rule 144A Global Security, see "Notice to Investors."
Securities offered and sold in reliance on Regulation S will initially be
represented by a single, permanent Global Security in definitive, fully
registered book-entry form (the "Regulation S Global Security") which will be
registered in the name of Cede & Co., as nominee of DTC and deposited on behalf
of the purchasers of the Securities represented thereby with a custodian for DTC
for credit to the respective accounts of the purchasers (or to such other
accounts as they may direct at the Euroclear System ("Euroclear") or Cedel Bank,
societe anonyme ("Cedel"). Prior to the 40th day after the later of the
commencement of the Offering and the Issue Date, interests in the Regulation S
Global Security may only be held through Euroclear or Cedel.
The Global Securities. The Company expects that pursuant to procedures
established by DTC (a) upon deposit of the Global Securities, DTC or its
custodian will credit on its internal system portions of the Global Securities,
which shall be comprised of the corresponding respective amount of the Global
Securities to the respect accounts of persons who have accounts with such
depositary and (b) ownership of the Securities will be shown on, and the
transfer of ownership thereof will be effected only through, records maintained
by DTC or its nominee (with respect to interests of Participants (as defined
below) and the records of Participants (with respect to interests of persons
other than Participants). Such accounts initially will be designated by or on
behalf of the Initial Purchasers and ownership of beneficial interests in the
Global Securities will be limited to persons who have accounts with DTC
("Participants") or person who hold interests through Participants. QIBs may
hold their interests in the Global Securities directly through DTC if they are
Participants in such system, or indirectly through organizations which are
Participants in such system.
Investors may hold their interests in the Regulation S Global Security
directly through Cedel or Euroclear, if they are participants in such systems,
or indirectly through organizations which are participants in such systems.
Beginning 40 days after the later of the commencement of the Offering and the
Issue Date (but not earlier), investors may also hold such interests through
organizations other than Cedel or Euroclear that are Participants in the DTC
system. Cedel and Euroclear will hold such interests in the Regulation S Global
Security on behalf of their participants through customers' securities accounts
in their respective names on the books of their respective depositaries, which
in turn will hold such interest in the Regulation S Global Security in
customers' securities accounts in the depositaries' names on the books of DTC.
So long as DTC or its nominee is the registered owner or holder of any of
the Securities, DTC or such nominee will be considered the sole owner or holder
of such Securities represented by the Global Securities for all purposes under
the Indenture and under the Securities represented thereby. No beneficial owner
of an interest in the Global Securities will be able to transfer such interest
except in accordance with the applicable procedures of DTC in addition to those
provided for under the Indenture.
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Payments of the principal of, premium (if any) and interest (including
Additional Interest, if any) on the Global Securities will be made to DTC or its
nominee, as the case may be, as the registered owner thereof. None of the
Company, the Trustee or any Paying Agent under the Indenture will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interest.
The Company expects that DTC or its nominee, upon receipt of any payment of
the principal of, premium, if any, and interest (including Additional Interest,
if any) on the Global Securities will credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of the Global Securities as shown on the records of DTC or
its nominee. The Company also expects that payments by Participants to owners of
beneficial interests in the Global Securities held through such Participants
will be governed by standing instructions and customary practice as is now the
case with securities held for the accounts of customers registered in the names
of nominees for such customers. Such payment will be the responsibility of such
Participants.
Transfers between Participants in DTC will be effected in accordance with
DTC rules and will be settled in immediately available funds. If a holder
requires physical delivery of a Certificated Security for any reason, including
to sell Securities to persons in states which require physical delivery of such
securities or to pledge such securities, such holder must transfer its interest
in the Global Securities in accordance with the normal procedures of DTC and in
accordance with the procedures set forth in the Indenture.
Before the 40th day after the later of the commencement of the Offering and
the Issue Date, transfers by an owner of a beneficial interest in the Regulation
S Global Security to a transferee who takes delivery of such interest through
the Rule 144A Global Security will be made only in accordance with the
applicable procedures and upon receipt by the Trustee and the Company of a
written certification from the transferor of the beneficial interest in the form
provided in the Indenture to the effect that such transfer is being made to a
person whom the transferor reasonably believes is a QIB within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A.
Transfers by an owner of a beneficial interest in the Rule 144A Global Note
to a transferee who takes delivery of such interest through the Regulation S
Global Note, whether before, on or after the 40th day after the later of the
commencement of the Offering and the Issue Date, will be made only upon receipt
by the Trustee and the Company of a certification to the effect that such
transfer is being made in accordance with Regulation S. Transfers of
Certificated Securities held by institutional "accredited investors" to persons
who will hold beneficial interests in the Rule 144A Global Security or the
Regulation S Global Security will be subject to certifications provided by the
Trustee.
Any beneficial interest in one of the Global Securities that is transferred
to a person who takes delivery in the form of an interest in the other Global
Security will, upon transfer, cease to be an interest in such Global Security
and become an interest in the other Global Security and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Security for as long as
it remains such an interest.
DTC has advised the Company that DTC will take any action permitted to be
taken by a holder of Securities (including the presentation of Securities for
exchange as described below) only at the direction of one or more Participants
to whose account the DTC interests in the Rule 144A Global Security are credited
and only in respect of the aggregate principal amount of as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Indenture, DTC will exchange the Rule 144A
Global Security for Certificated Securities, which it will distribute to its
Participants and which will be legended as set forth under the heading "Notice
to Investors."
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and facilitate the
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clearance and settlement of securities transactions between Participants through
electronic book-entry changes in accounts of its Participants, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and certain other organizations. Indirect access to the DTC system is available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants").
Although DTC, Euroclear and Cedel are expected to follow the foregoing
procedures in order to facilitate transfers of interests in the Global
Securities among Participants of DTC, Euroclear and Cedel, they are under no
obligation to perform such procedures, and such procedures may be discontinued
at any time. None of the Company, the Trustee, Registrar or the Paying Agent
will have any responsibility for the performance by DTC, Euroclear or Cedel or
their respective direct or indirect Participants of their respective obligations
under the rules and procedures governing their operations.
Certificated Securities. Interests in Global Securities will be exchanged
for Certificated Securities if (i) DTC notifies the Company that it is unwilling
or unable to continue as depositary for the Rule 144A Global Securities, or DTC
ceases to be a "Clearing Agency" registered under the Exchange Act, and a
successor depositary is not appointed by the Company within 90 days, or (ii) an
Event of Default has occurred and is continuing with respect to the applicable
Securities. Upon the occurrence of any of the events described in the preceding
sentence, the Company will cause the appropriate Certificated Securities to be
delivered.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Old Securities were originally sold by the Company on June 9, 1998 to
the Initial Purchasers pursuant to the Purchase Agreement. The Initial
Purchasers subsequently resold the Old Securities to qualified institutional
buyers in reliance on Rule 144A under the Securities. As a condition to the
Purchase Agreement, the Company and the Initial Purchasers entered into the
Registration Rights Agreements on June 9, 1998, the date of the Initial Offering
(the "Issue Date").
The Registration Rights Agreements provide that: (i) unless the Exchange
Offer would not be permitted by applicable law or Commission policy, the Company
will file the Exchange Offer Registration Statement with the Commission on or
prior to 60 days after the Issue Date, (ii) unless the Exchange Offer would not
be permitted by applicable law or Commission policy, the Company will use its
best efforts to have the Exchange Offer Registration Statement declared
effective by the Commission on or prior to 120 days after the Issue Date and
(iii) unless the Exchange Offer would not be permitted by applicable law or
Commission policy, the Company will commence the Exchange Offer and use its best
efforts to issue, on or prior to 30 business days after the date on which the
Exchange Offer Registration Statement was declared effective by the Commission,
Exchange Notes in exchange for all Notes tendered prior thereto in the Exchange
Offer. The Exchange Offer is being made to satisfy certain of the contractual
obligations of the Company under the Registration Rights Agreements and the
Purchase Agreement.
If the Company fails to issue Exchange Securities in exchange for all Old
Securities properly tendered and not withdrawn in the Exchange Offer within 30
business days of the effective date of the Exchange Offer Registration Statement
(a "Registration Default"), then the Company shall pay as liquidated damages
additional interest ("Additional Interest") on the Securities as to which the
Registration Default exists as set forth herein. If a Registration Default
exists with respect to the Securities, the interest rate on such Securities will
increase, with respect to the first 90-day period (or portion thereof) while a
Registration Default is continuing immediately following the occurrence of such
Registration Default, .25% per annum, such interest rate increasing by an
additional .25% per annum at the beginning of each subsequent 90-day period (or
portion thereof) while a Registration Default is continuing until all
Registration Defaults have been cured, up to a maximum rate of Additional
Interest of 1.00% per annum. Upon the issuance of Exchange Securities in
exchange for all Securities properly tendered and not withdrawn in the Exchange
Offer, Additional Interest as a result of the Registration Default shall cease
to accrue (but any accrued amount shall be payable) and the interest rate on the
Securities will revert to the original rate.
Following the consummation of the Exchange Offer, holders of the Old
Securities who were eligible to participate in the Exchange Offer but who did
not tender their Old Securities will not have any further registration rights
and such Old Securities will continue to be subject to certain restrictions on
transfer. Accordingly, the liquidity of the market for such Old Securities could
be adversely affected.
If (i) the Company is not permitted to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy, (ii) the Exchange Offer is not for any other reason consummated within
180 days after the Issue Date, (iii) any holder of Securities notifies the
Company within a specified time period that (a) due to a change in law or policy
it is not entitled to participate in the Exchange Offer, (b) due to a change in
law or policy it may not resell the Exchange Securities acquired by it in the
Exchange Offer to the public without delivering a prospectus and the prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such holder or (c) it is a broker-dealer and owns
Securities acquired directly from the Company or an affiliate of the Company, or
(iv) the holders of a majority in aggregate principal amount of the Securities
may not resell the Exchange Securities acquired by them in the Exchange Offer to
the public without restriction under the Securities Act and without restriction
under applicable blue sky or state securities laws, the Company will file with
the Commission a shelf registration statement to cover resales of the Transfer
Restricted Notes (as defined herein) by the holders hereto. The Company will use
its best efforts to cause the applicable registration statement to be declared
effective as promptly as possible by the Commission.
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For purposes of the foregoing, "Transfer Restricted Securities" means each
Security until (i) the date on which such Security has been exchanged by a
person other than a broker-dealer referred to in (ii) below for an Exchange
Security in the Exchange Offer, (ii) following the exchange by a broker-dealer
in the Exchange Offer of a Note for an Exchange Security, the date on which such
Exchange Security is sold to a purchaser who receives from such broker-dealer on
or prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, as amended or supplemented, (iii) the
date on which such Security has been effectively registered under the Securities
Act and disposed of in accordance with the shelf registration statement, (iv)
the date on which such Security is eligible for distribution to the public
pursuant to Rule 144(k) under the Securities Act (or any similar provision then
in force, but not Rule 144A under the Securities Act), (v) the date on which
such Security shall have been otherwise transferred by the holder thereof and a
new Security not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of such Security shall not
require registration or qualification under the Securities Act or any similar
state law then in force or (vi) such Security ceases to be outstanding.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old
Securities validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. The Company will issue $1,000 principal amount of
Exchange Securities in exchange for each $1,000 principal amount of outstanding
Old Securities accepted in the Exchange Offer. Holders may tender some or all of
their Old Securities pursuant to the Exchange Offer. However, Old Securities may
be tendered only in integral multiples of $1,000.
The form and terms of the Exchange Securities are the same as the form and
terms of the Old Securities except that (i) the Exchange Securities bear a
different CUSIP Number from the Old Securities, (ii) the Exchange Securities
have been registered under the Securities Act and hence will not bear legends
restricting the transfer thereof and (iii) the holders of the Exchange
Securities will not be entitled to certain rights under the Registration Rights
Agreements, including the provisions providing for an increase in the interest
rate on the Old Securities in certain circumstances relating to the timing of
the Exchange Offer, all of which rights will terminate when the Exchange Offer
is terminated. The Exchange Securities will evidence the same debt as the Old
Securities and will be entitled to the benefits of the respective Indentures.
The Exchange Offer is not conditioned upon any minimum principal amount of
Old Securities being tendered. As of the date of this Prospectus, $1,000,000,000
aggregate principal amount of Old Securities were outstanding.
Holders of Old Securities do not have any appraisal or dissenters' rights
under the Delaware General Corporation Law or the Indentures in connection with
the Exchange Offer. The Company intends to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Old
Securities when, as and if the Company has given oral or written notice thereof
to the Exchange Agent. The Exchange Agent will act as agent for the tendering
holders for the purpose of receiving the Exchange Securities from the Company.
If any tendered Old Securities are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Old Securities will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Old Securities in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of Old
Securities pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection with
the Exchange Offer. See "-- Fees and Expenses."
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EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Securities, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "-- Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of the
Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral or
written notice thereof to the registered holders.
Any such extension, delay in acceptance, termination or amendment will be
followed promptly by oral (confirmed in writing) or written notice thereof to
the Exchange Agent and by making a public announcement thereof, and such
announcement in the case of an extension will be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which the Company may choose to
make any public announcement and subject to applicable law, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a press release to an appropriate news
agency.
INTEREST ON THE EXCHANGE SECURITIES
The Exchange Securities will bear interest from their date of issuance.
Holders of Old Securities that are accepted for exchange will receive, in cash,
accrued interest thereon to, but not including, the date of issuance of the
Exchange Securities. Such interest will be paid with the first interest payment
on the Exchange Securities on December 15, 1998. Interest on the Old Securities
accepted for exchange will cease to accrue upon issuance of the Exchange Notes.
Interest on the Exchange Securities is payable semi-annually on each
December 15 and June 15, commencing on December 15, 1998.
PROCEDURES FOR TENDERING
Only a holder of Old Securities may tender such Old Securities in the
Exchange Offer. For a holder to validly tender Old Securities pursuant to the
Exchange Offer, a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantee, or (in the case of a
book-entry transfer) an Agent's Message in lieu of the Letter of Transmittal,
and any other required documents must be received by the Exchange Agent at the
address set forth under "Exchange Agent" prior to 5:00 p.m., New York City time,
on the Expiration Date. In addition, prior to 5:00 p.m., New York City time, on
the Expiration Date, either (a) certificates for tendered Old Securities must be
received by the Exchange Agent at such address or (b) such Old Securities must
be transferred pursuant to the procedures for book-entry transfer described
below (and a confirmation of such tender received by the Exchange Agent,
including an Agent's Message if the tendering holder has not delivered a Letter
of Transmittal). The term "Agent's Message" means a message, transmitted by the
book-entry transfer facility, The Depository Trust Company (the "Book-Entry
Transfer Facility"), to and received by the Exchange Agent and forming a part of
a book-entry confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from the tendering participant that such
participant has received and agrees to be bound by the Letter of Transmittal and
that the Company may enforce such Letter of Transmittal against such
participant.
By tendering, each holder of Old Securities will represent to the Company
that, among other things, (i) the Exchange Securities to be acquired by such
holder of Old Securities in connection with the Exchange Offer are being
acquired by such holder in the ordinary course of business of such holder, (ii)
such holder is not participating, does not intend to participate, and has no
arrangement or understanding with any person to participate in the distribution
of the Exchange Securities, (iii) except as otherwise disclosed in writing, such
holder is not an "affiliate," as defined in Rule 405 under the Securities Act,
of the Company, and (iv) such
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holder acknowledges and agrees that any person participating in the Exchange
Offer with the intention or for the purpose of distributing the Exchange
Securities must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale of the
Exchange Securities acquired by such person and cannot rely on the position of
the Staff of the Commission set forth in the no-action letters that are
discussed under "Resale of the Exchange Securities." In addition, by accepting
the Exchange Offer, such holder (i) will represent and warrant that, if such
holder is a Participating Broker-Dealer, such Participating Broker-Dealer
acquired the Old Securities for its own account as a result of market-making
activities or other trading activities and has not entered into any arrangement
or understanding with the Company or any "affiliate" of the Company (within the
meaning of Rule 405 under the Securities Act) to distribute the Exchange
Securities to be received in the Exchange Offer, and (ii) acknowledges that, by
receiving Exchange Securities for its own account in exchange for Old
Securities, where such Old Securities were acquired as a result of market-making
activities or other trading activities, such Participating Broker-Dealer will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities.
The tender by a holder and the acceptance thereof by the Company will
constitute agreement between such holder and the Company in accordance with the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF OLD SECURITIES AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE
RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO
CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. NO LETTER OF TRANSMITTAL OR OLD SECURITIES SHOULD BE SENT TO THE COMPANY.
HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose Old Securities are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. See "Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner" included with the Letter of Transmittal.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a recognized participant in the Securities
Transfer Agent Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchange Medallion Program (each, a "Medallion
Signature Guarantor"), unless the Old Securities tendered pursuant thereto are
tendered (i) by a registered holder who has not completed the box entitled
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of a member firm of a registered national securities exchange, a member
of the NASD or a commercial bank or trust company having an office or
correspondent in the United States (each of the foregoing being an "Eligible
Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Securities listed therein, such Old Securities must
be endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Old
Securities with the signature thereon guaranteed by a Medallion Signature
Guarantor.
If the Letter of Transmittal or any Old Securities or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
offices of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and evidence
satisfactory to the Company of their authority to so act must be submitted with
the Letter of Transmittal.
The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Old Securities at the Book-Entry Transfer Facility for the
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purpose of facilitating the Exchange Offer, and, subject to the establishment
thereof, any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make book-entry delivery of Old Securities by
causing such Book-Entry Transfer Facility to transfer such Old Securities into
the Exchange Agent's account with respect to the Old Securities in accordance
with the Book-Entry Transfer Facility's procedures for such transfer. Although
delivery of the Old Securities may be effected through book-entry transfer into
the Exchange Agent's account at the Book-Entry Transfer Facility, an appropriate
Letter of Transmittal properly completed and duly executed with any required
signature guarantee (or, in the case of book-entry transfer, an Agent's Message
in lieu thereof) and all other required documents must in each case be
transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed
delivery procedures described below are complied with, within the time period
provided under such procedures. Delivery of documents to the Book-Entry Transfer
Facility does not constitute delivery to the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Securities and withdrawal of tendered Old
Securities will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute right
to reject any and all Old Securities not properly tendered or any Old Securities
the Company's acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right in its sole discretion
to waive any defects, irregularities or conditions of tender as to particular
Old Securities. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Old Securities must be cured within such time as
the Company shall determine. Although the Company intends to notify holders of
defects or irregularities with respect to tenders of Old Securities, neither the
Company, the Exchange Agent nor any other person shall incur any liability for
failure to give such notification. Tenders of Old Securities will not be deemed
to have been made until such defects or irregularities have been cured or
waived. Any Old Securities received by the Exchange Agent that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the tendering holders, unless
otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Securities and (i) whose Old
Securities are not immediately available, (ii) who cannot deliver their Old
Securities, the Letter of Transmittal (or, in the case of book-entry transfer,
an Agent's Message) or any other required documents to the Exchange Agent or
(iii) who cannot complete the procedures for book-entry transfer (including
delivery of an Agent's Message), prior to the Expiration Date, may effect a
tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution (i) an Agent's Message with respect to guaranteed
delivery that is accepted by the Company, or (ii) a properly completed and
duly executed Notice of Guaranteed Delivery (by facsimile transmission,
mail or hand delivery) setting forth the name and address of the holder,
the certificate number(s) of such Old Securities and the principal amount
of Old Securities tendered, stating that the tender is being made thereby
and guaranteeing that, within three New York Stock Exchange trading days
after the Expiration Date, the Letter of Transmittal (or facsimile thereof)
together with the certificate(s) representing the Old Securities (or a
confirmation of book-entry transfer of such Securities into the Exchange
Agent's account at the Book-Entry Transfer Facility), and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal or
facsimile thereof (or, in the case of book-entry transfer, an Agent's
Message), as well as the certificate(s) representing all tendered Old
Securities in proper form for transfer (or a confirmation of book-entry
transfer of such Old Securities into the Exchange Agent's account at the
Book-Entry Transfer Facility), and all other documents required by
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the Letter of Transmittal are received by the Exchange Agent within three
New York Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Securities according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Securities may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
To withdraw a tender of Old Securities in the Exchange Offer, a letter or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Old Securities to be withdrawn (the
"Depositor"), (ii) identify the Old Securities to be withdrawn (including the
certificate number(s) and principal amount of such Old Securities, or, in the
case of Old Securities transferred by book-entry transfer, the name and number
of the account at the Book-Entry Transfer Facility to be credited), (iii) be
signed by the holder in the same manner as the original signature on the Letter
of Transmittal by which such Old Securities were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Old Securities register the
transfer of such Old Securities into the name of the person withdrawing the
tender and (iv) specify the name in which any such Old Securities are to be
registered, if different from that of the Depositor. All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Company, whose determination shall be final and binding on
all parties. Any Old Securities so withdrawn will be deemed not to have been
validly tendered for purposes of the Exchange Offer and no Exchange Securities
will be issued with respect thereto unless the Old Securities so withdrawn are
validly re-tendered. Any Old Securities which have been tendered but which are
not accepted for exchange will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Old Securities may be re-
tendered by following one of the procedures described above under "-- Procedures
for Tendering" at any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange Exchange Securities for, any Old
Securities, and may terminate or amend the Exchange Offer as provided herein
before the acceptance of such Old Securities, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the sole judgment of the Company, might materially impair the
ability of the Company to proceed with the Exchange Offer, or any material
adverse development has occurred in any existing action or proceeding with
respect to the Company or any of its subsidiaries;
(b) any law, statute, rule, regulation or interpretation by the staff
of the Commission is proposed, adopted or enacted, which, in the sole
judgment of the Company, might materially impair the ability of the Company
to proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Company; or
(c) any governmental approval has not been obtained, which approval
the Company shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its sole discretion that any of the conditions
is not satisfied, the Company may (i) refuse to accept any Old Securities and
return all tendered Old Securities to the tendering holders, (ii) extend the
Exchange Offer and retain all Old Securities tendered prior to the expiration of
the Exchange Offer, subject, however, to the rights of holders to withdraw such
Old Securities (see "-- Withdrawal of
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Tenders") or (iii) waive such unsatisfied conditions with respect to the
Exchange Offer and accept all properly tendered Old Securities which have not
been withdrawn.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal, and requests for Notice of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
THE BANK OF NEW YORK
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery:
THE BANK OF NEW YORK
101 Barclay Street, (7 East) THE BANK OF NEW YORK
New York, New York 10286 101 Barclay Street
Attention: Diana Torres Corporate Trust Services Window
Reorganization Section Ground Level
New York, New York 10286
Attention: Diana Torres
Reorganization Section
</TABLE>
By Facsimile for Eligible Institutions:
(212) 815-6339
Confirmed by Telephone:
(212) 815-5789
DELIVERY TO AN ADDRESS OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by facsimile, telecopy, telephone or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The Exchange Securities will be recorded at the same carrying value as the
Old Securities as reflected in the Company's accounting records on the date of
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized by the Company. Certain expenses of the Exchange Offer will be
amortized over the term of the Exchange Securities.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Old Securities that are not exchanged for Exchange Securities pursuant
to the Exchange Offer will remain restricted securities. Accordingly, such Old
Securities may be resold only (i) to the Company (upon redemption thereof or
otherwise), (ii) so long as the Old Securities are eligible for resale pursuant
to Rule 144A, to a person inside the United States whom the seller reasonably
believes is a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act in a transaction meeting the requirements of
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Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to
another exemption from the registration requirements of the Securities Act (and
based upon an opinion of counsel reasonably acceptable to the Company), (iii)
outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act, or (iv) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States.
RESALE OF THE EXCHANGE SECURITIES
With respect to resales of Exchange Securities, based on interpretations by
the staff of the Commission set forth in no-action letters issued to third
parties, the Company believes that a holder or other person who receives
Exchange Securities, whether or not such person is the holder (other than a
person that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) who receives Exchange Securities in exchange for Old
Securities in the ordinary course of business and who is not participating, does
not intend to participate, and has no arrangement or understanding with any
person to participate, in the distribution of the Exchange Securities, will be
allowed to resell the Exchange Securities to the public without further
registration under the Securities Act and without delivering to the purchasers
of the Exchange Securities a prospectus that satisfies the requirements of
Section 10 of the Securities Act. However, if any holder acquires Exchange
Securities in the Exchange Offer for the purpose of distributing or
participating in a distribution of the Exchange Securities, such holder cannot
rely on the position of the staff of the Commission enunciated in such no-action
letters or any similar interpretive letters, and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction, unless an exemption from registration is
otherwise available. Further, each Participating Broker-Dealer that receives
Exchange Securities for its own account in exchange for Old Securities, where
such Old Securities were acquired by such Participating Broker-Dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such Exchange
Securities. The Letter of Transmittal states that, by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. For
a description of the procedures for such resales by Participating
Broker-Dealers, see "Plan of Distribution."
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PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives Exchange Securities for its
own account pursuant to the Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of Exchange
Securities received in exchange for Old Securities where such Old Securities
were acquired as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 180 days after the
Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any Participating Broker-Dealer for use in connection with any such
resale. In addition, until , 1998 (90 days after the commencement of
the Exchange Offer), all dealers effecting transactions in the Exchange
Securities may be required to deliver a prospectus.
The Company will not receive any proceeds from any sales of the Exchange
Securities by Participating Broker-Dealers. Exchange Securities received by
Participating Broker-Dealers for their own account pursuant to the Exchange
Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Securities or a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
Participating Broker-Dealer and/or the purchasers of any such Exchange
Securities. Any Participating Broker-Dealer that resells the Exchange Securities
that were received by it for its own account pursuant to the Exchange Offer and
any broker or dealer that participates in a distribution of such Exchange
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of Exchange Securities and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any Participating Broker-Dealer that requests
such documents in the Letter of Transmittal.
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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following general discussion summarizes certain of the material U.S.
federal income tax aspects of the acquisition, ownership and disposition of the
Securities, as well as the exchange of Old Securities for Exchange Securities.
Unless the context otherwise requires, all references to Securities includes the
Exchange Securities for purposes of this discussion. This discussion is a
summary for general information only and does not consider all aspects of U.S.
federal income taxation that may be relevant to the purchase, ownership and
disposition of the Securities by a prospective investor in light of such
investor's personal circumstances. This discussion also does not address the
U.S. federal income tax consequences of ownership of Securities not held as
capital assets within the meaning of Section 1221 of the U.S. Internal Revenue
Code of 1986, as amended (the "Code"), or the U.S. federal income tax
consequences to investors subject to special treatment under the U.S. federal
income tax laws, such as dealers in securities or foreign currency, tax-exempt
entities, financial institutions, insurance companies, persons that hold the
Securities as part of a "straddle," a "hedge" or a "conversion transaction,"
persons that have a "functional currency" other than the U.S. dollar, and
investors in pass-through entities. This discussion is generally limited to the
tax consequences to initial holders that purchase the Securities at the "issue
price." For this purpose, the "issue price" of a Security is the first price at
which a substantial part of the Securities are sold for money (excluding sales
to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers). In addition, this
discussion does not describe any tax consequences arising under U.S. federal
gift and estate taxes (except to the limited extent set forth below under
"Non-U.S. Holders") or under the tax laws of any state, local or foreign
jurisdiction.
This discussion is based upon the Code, existing regulations thereunder,
and current administrative rulings and court decisions. All of the foregoing is
subject to change, possibly on a retroactive basis, and any such change could
affect the continuing validity of this discussion.
U.S. HOLDERS
The following discussion is limited to certain material U.S. federal income
tax consequences relevant to a Holder of a Security that is (i) a citizen or
resident (as defined in Section 7701(b)(1) of the Code) of the United States,
(ii) a corporation organized under the laws of the United States or any
political subdivision thereof or therein, (iii) an estate, the income of which
is subject to U.S. federal income tax regardless of the source or (iv) a trust
with respect to which a court within the United States is able to exercise
primary supervision over its administration and one or more United States
persons have the authority to control all of its substantial decisions (a "U.S.
Holder"). Certain material U.S. federal income tax consequences relevant to a
holder other than a U.S. Holder are discussed separately below under the heading
"Non-U.S. Holders."
Stated Interest
Interest paid on a Security will be taxable to a U.S. Holder as ordinary
income at the time it accrues or is received in accordance with such holder's
method of accounting for U.S. federal income tax purposes. The interest rate on
the Securities is subject to increase in certain circumstances, including if the
Securities are not registered with the Commission within prescribed time
periods. The Company intends to treat the possibility that the Company will pay
such additional interest as subject to either a remote or incidental
contingency, within the meaning of applicable Treasury regulations and,
therefore, the Company believes that such additional interest will be taxable to
U.S. Holders at the time it accrues or is received in accordance with each such
holder's method of accounting.
Market Discount
If a Security is acquired at a "market discount," some or all of any gain
realized upon a sale, other disposition, or payment at maturity (or earlier) of
such Security, or some or all of the proceeds of a partial principal repayment
before maturity of such Security, may be treated as ordinary income, as
described below. For this purpose, "market discount" is the excess, if any, of
the stated redemption price at maturity over the purchase price, subject to a
statutory de minimis exception. Unless a U.S. Holder has elected to include
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<PAGE> 71
market discount in income as it accrues, any gain realized on a disposition of
such a Security (other than in connection with certain nonrecognition
transactions) or payment at maturity (or earlier), or some or all of the
proceeds of a partial repayment before maturity, will generally be treated as
ordinary income to the extent of the market discount accrued during the period
the Security was held. Such a U.S. Holder may also be required to defer
deductions for any interest paid on indebtedness allocable to that Security
until such income is realized.
Bond Premium
In general, if a Security is purchased at a price exceeding the principal
amount of that Security, the Security has "bond premium." A U.S. Holder may
generally elect to amortize bond premium over the remaining term of that
Security (or, in certain circumstances, until an earlier call date).
An election to amortize premium will apply to amortizable bond premium on
all Securities and other taxable debt securities held by the electing U.S.
Holder on or after the beginning of the U.S. Holder's first taxable year to
which the election applies, and may be revoked only with the consent of the
Internal Revenue Service.
Exchange Offer
The exchange of Securities for the Exchange Securities pursuant to the
Exchange Offer should not be a taxable exchange for U.S. federal income tax
purposes. As a result, there should be no U.S. federal income tax consequences
to U.S. Holders exchanging the Securities for the Exchange Securities pursuant
to the Exchange Offer. A U.S. Holder should have the same adjusted basis and
holding period in the Exchange Securities as it had in the Securities
immediately before the exchange.
Sale, Exchange or Redemption of the Securities
Upon the sale, exchange or redemption of a Security, a U.S. Holder
generally will recognize gain or loss equal to the difference between (i) the
amount realized on the disposition (other than amounts attributable to accrued
interest not yet taken into income) and (ii) the U.S. Holder's tax basis in the
Security. A U.S. Holder's tax basis in a Security generally will equal the cost
of the Securities to the U.S. Holder. Such gain or loss will generally
constitute capital gain or loss.
Recently enacted legislation revised the holding period and tax rates
applicable to certain capital gains. For non-corporate U.S. Holders, long-term
capital gain from the sale or exchange of a Security is taxed at different rates
depending upon whether the holding period is more than one year but not more
than 18 months, or more than 18 months. U.S. Holders are advised to consult
their tax advisors concerning the new provisions on the taxation of capital
gains.
Backup Withholding and Information Reporting
Under the Code, a U.S. Holder of a Security may be subject, under certain
circumstances, to information reporting and/or backup withholding at a 31% rate
on payments of interest on, or the gross proceeds from disposition of, a
Security. This withholding applies only if a U.S. Holder (i) fails to furnish
its social security or other taxpayer identification number ("TIN") within a
reasonable time after it is requested, (ii) furnishes an incorrect TIN, (iii)
fails to report interest or dividends properly, or (iv) fails, under certain
circumstances, to provide a certified statement, signed under penalty of
perjury, that the TIN provided is a correct number and that the Holder is not
subject to backup withholding. Any amount withheld from a payment to a U.S.
Holder under the backup withholding rules is allowable as a credit (and may
entitle such holder to a refund) against such holder's U.S. federal income tax
liability, provided that the required information is furnished to the IRS.
Certain persons are exempt from backup withholding, including corporations and
financial institutions. Holders of Securities should consult their tax advisors
as to their qualification for an exemption from backup withholding and the
procedure for obtaining such an exemption.
65
<PAGE> 72
NON-U.S. HOLDERS
The following discussion is limited to certain material U.S. federal income
tax consequences relevant to a Holder of a Security that is not a U.S. Holder (a
"Non-U.S. Holder"). This discussion does consider all aspects of U.S. federal
income and estate taxation that may be relevant to the purchase, ownership or
disposition of the Securities by a Non-U.S. Holder in light of such holder's
particular circumstances, including holding the Securities through a
partnership. For example, persons who are partners in foreign partnerships or
beneficiaries of foreign trusts or estates and who are subject to U.S. federal
income tax because of their own status, such as U.S. residents or foreign
persons engaged in a trade or business in the United States, may be subject to
U.S. federal income tax even though the foreign partnership, trust or estate is
not itself subject to U.S. federal income tax on the disposition of its
Securities. In addition, persons who hold the Securities through hybrid entities
(i.e., entities that are fiscally transparent for U.S. tax purposes but not for
foreign law purposes) may not be entitled to any applicable treaty benefits. For
purposes of the following discussion, interest and gain on the sale, exchange or
other disposition of the Securities will be considered "U.S. trade or business
income" if such income or gain is (i) effectively connected with the conduct of
a U.S. trade or business or (ii) in the case of a resident of a country with
which the United States has an income tax treaty, attributable to a U.S.
permanent establishment (or to a fixed base) in the United States.
Stated Interest
Generally, any interest (including Additional Interest) paid to a Non-U.S.
Holder of a Security that is not U.S. trade or business income will not be
subject to U.S. federal income tax if the interest qualifies as "portfolio
interest." Interest on the Securities will qualify as portfolio interest if the
Non-U.S. Holder (i) does not actually or constructively own 10% or more of the
total voting power of all voting stock of the Company; (ii) is not a "controlled
foreign corporation" with respect to which the Company is a "related person"
within the meaning of the Code; (iii) is not a bank extending credit pursuant to
a loan agreement entered into in the ordinary course of its trade or business;
and (iv) the beneficial owner, under penalty of perjury, certifies that it is
not a U.S. person and such certificate provides the beneficial owner's name and
address.
The gross amount of interest paid to a Non-U.S. Holder that does not
qualify for the portfolio interest exception and that is not U.S. trade or
business income will be subject to U.S. withholding tax at the rate of 30%,
unless a U.S. income tax treaty reduces or eliminates withholding. U.S. trade or
business income will be taxed on a net basis at regular U.S. federal income tax
rates rather than the 30% withholding rate. To claim the benefit of a tax treaty
or to claim exemption from withholding because the income is U.S. trade or
business income, the Non-U.S. Holder must provide a properly executed Form 1001
or 4224 (or such successor forms as the IRS designates), as applicable, prior to
the payment of interest. These forms must be periodically updated. Under
newly-finalized regulations, not currently in effect, the Forms 1001 and 4224
will be replaced by Form W-8. Also under these newly-finalized regulations, a
Non-U.S. Holder who is claiming the benefits of a tax treaty may be required to
obtain a U.S. taxpayer identification number and to provide certain documentary
evidence issued by foreign governmental authorities to prove residence in the
foreign country. Certain special procedures are provided in these
newly-finalized regulations for payments through qualified intermediaries. These
newly-finalized regulations are effective January 1, 2000. However, valid
withholding certificates that are held on December 31, 1999 (including Forms
1001, 4224 and W-8) will remain valid until the earlier of December 31, 2000 or
the expiration date of the certificate under the rules currently in effect.
NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE
APPLICATION OF THE CERTIFICATION REQUIREMENTS IN THE NEWLY-FINALIZED
REGULATIONS.
Sale, Exchange or Redemption of Securities
Except as described below and subject to the discussion of backup
withholding below, any gain realized by a Non-U.S. Holder on the sale, exchange
or redemption of a Security generally will not be subject to U.S. federal income
tax, unless (i) the gain is U.S. trade or business income, (ii) subject to
certain exceptions, the Non-U.S. Holder is an individual who holds the Security
as a capital asset and is present in the
66
<PAGE> 73
United States for 183 days or more during the taxable year of the disposition or
(iii) the Non-U.S. Holder is subject to rules applicable to certain former
citizens and residents of the United States.
Federal Estate Tax
Securities held (or treated as held) by an individual who is a Non-U.S.
Holder at the time of his or her death will not be subject to U.S. federal
estate tax, provided the individual did not actually or constructively own 10%
or more of the total voting power of all voting stock of the Company and
provided income on the Securities was not U.S. trade or business income.
Information Reporting and Backup Withholding
The Company must report annually to the IRS and to each Non-U.S. Holder any
interest that is subject to U.S. withholding tax or that is exempt from
withholding pursuant to a tax treaty or the portfolio interest exception. Copies
of these information returns also may be made available under the provisions of
a specific treaty or agreement to the tax authorities of the country in which
the Non-U.S. Holder resides. In the case of interest (including original issue
discount, if any) paid to Non-U.S. Holders, information reporting and backup
withholding (at a rate of 31%) does not apply to such payments if the holder
makes the requisite certification or has otherwise established an exemption
(provided that neither the payor nor its paying agent has actual knowledge that
the holder is a U.S. Holder or that the conditions of any other exemption are
not, in fact, satisfied).
Backup withholding and information reporting likewise do not apply to the
Company's payments of principal on the Securities to a Non-U.S. Holder, if the
holder certifies as to its non-U.S. status under penalty of perjury or otherwise
establishes an exemption (provided that neither the Company nor its paying agent
has actual knowledge that the holder is a U.S. Holder or that the conditions of
any other exemption are not, in fact, satisfied).
The payment of the proceeds from the disposition of Securities to or
through the U.S. office of any broker, U.S. or foreign, are subject to
information reporting and possible backup withholding unless the owner certifies
as to its non-U.S. status under penalty of perjury or otherwise establishes an
exemption, provided that the broker does not have actual knowledge that the
holder is a U.S. Holder or that the conditions of any other exemption are not,
in fact, satisfied.
The payment of the proceeds from the disposition of a Security to or
through a non-U.S. office of a non-U.S. broker that is not a "U.S. related
person" will not be subject to information reporting or backup withholding. For
this purpose, a "U.S. related person" is a foreign person with certain
enumerated relationships with the U.S.
In the case of the payment of proceeds from the disposition of Securities
to or through a non-U.S. office of a broker that is either a U.S. person or a
U.S. related person, the regulations require information reporting on the
payment unless the broker has documentary evidence in its files that the owner
is a Non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding does not apply to payments made through foreign offices of a broker
that is not a U.S. person or a U.S. related person (absent actual knowledge that
the payee is a U.S. Holder).
Any amounts withheld from a payment to a Non-U.S. Holder under the backup
withholding rules will be allowed as a refund or a credit against such Non-U.S.
Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY,
EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR AS TO PARTICULAR TAX
CONSEQUENCES TO IT OF PURCHASING, HOLDING AND DISPOSING OF THE SECURITIES,
INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS,
AND OF ANY PROPOSED CHANGES IN APPLICABLE LAWS.
67
<PAGE> 74
LEGAL MATTERS
The validity of the Exchange Securities being offered hereby and certain
other legal matters in connection with the Offering are being passed upon for
the Company by Weil, Gotshal & Manges LLP.
EXPERTS
The consolidated financial statements (and schedule incorporated by
reference) of WestPoint Stevens Inc. as of December 31, 1997 and 1996, and for
each of the three years in the period ended December 31, 1997, appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon appearing and
incorporated by reference elsewhere herein, and are included in reliance upon
such reports given upon the authority of such firm as experts in accounting and
auditing.
68
<PAGE> 75
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Condensed Consolidated Balance Sheets (Unaudited)...........
F-2
Condensed Consolidated Statements of Income (Unaudited).....
F-3
Condensed Consolidated Statements of Cash Flows
(Unaudited)...............................................
F-4
Condensed Consolidated Statements of Stockholders' Equity
(Deficit)(Unaudited)......................................
F-5
Notes to Condensed Consolidated Financial Statements
(Unaudited)...............................................
F-6
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1997, 1996 AND 1995
Report of Ernst & Young LLP, Independent Auditors...........
F-9
Consolidated Balance Sheets.................................
F-10
Consolidated Statements of Income...........................
F-12
Consolidated Statements of Stockholders' Equity (Deficit)...
F-13
Consolidated Statements of Cash Flows.......................
F-14
Notes to Consolidated Financial Statements..................
F-15
</TABLE>
F-1
<PAGE> 76
WESTPOINT STEVENS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents................................. $ 9,873 $ 17,433
Accounts receivable....................................... 102,239 92,990
Inventories............................................... 376,325 340,818
Prepaid expenses and other current assets................. 19,337 22,227
---------- ----------
Total current assets........................................ 507,774 473,468
Property, Plant and Equipment, net.......................... 705,743 707,151
Other Assets
Deferred financing fees................................... 18,262 19,231
Prepaid pension and other assets.......................... 47,645 49,033
Goodwill.................................................. 36,988 37,223
---------- ----------
$1,316,412 $1,286,106
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Senior Credit Facility.................................... $ 87,714 $ 37,683
Current portion of long-term debt......................... 3,750 3,750
Accrued interest payable.................................. 25,734 6,820
Trade accounts payable.................................... 58,970 75,655
Other accounts payable and accrued liabilities............ 131,373 137,382
---------- ----------
Total current liabilities................................... 307,541 261,290
Long-Term Debt.............................................. 1,142,500 1,146,250
Noncurrent Liabilities
Deferred income taxes..................................... 222,318 217,178
Other liabilities......................................... 81,971 84,402
---------- ----------
Total noncurrent liabilities................................ 304,289 301,580
Stockholders' Equity (Deficit).............................. (437,918) (423,014)
---------- ----------
$1,316,412 $1,286,106
========== ==========
</TABLE>
See accompanying notes
F-2
<PAGE> 77
WESTPOINT STEVENS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
-------- --------
(UNAUDITED)
<S> <C> <C>
Net sales................................................... $398,706 $357,101
Cost of goods sold.......................................... 299,185 267,872
-------- --------
Gross earnings............................................ 99,521 89,229
Selling, general and administrative expenses................ 55,088 50,718
-------- --------
Operating earnings........................................ 44,433 38,511
Interest expense............................................ 25,704 23,409
Other expense, net.......................................... 401 784
-------- --------
Income from continuing operations before income tax
expense................................................ 18,328 14,318
Income tax expense.......................................... 6,625 5,343
-------- --------
Income from continuing operations........................... 11,703 8,975
Income from discontinued operations......................... -- 1,133
-------- --------
Net income................................................ $ 11,703 $ 10,108
======== ========
Basic net income per common share:
Continuing operations..................................... $ .20 $ .14
Discontinued operations................................... -- .02
-------- --------
Net income per common share............................... $ .20 $ .16
======== ========
Diluted net income per common share:
Continuing operations..................................... $ .19 $ .14
Discontinued operations................................... -- .02
-------- --------
Net income per common share............................... $ .19 $ .16
======== ========
Basic average common shares outstanding..................... 58,919 62,118
Dilutive effect of stock options and stock bonus plan..... 1,991 1,572
-------- --------
Diluted average common shares outstanding................... 60,910 63,690
======== ========
</TABLE>
See accompanying notes
F-3
<PAGE> 78
WESTPOINT STEVENS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1998 1997
--------- ---------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 11,703 $ 10,108
Adjustment to reconcile net income to net cash provided by
(used for) operating activities:
Depreciation and other amortization.................... 20,353 19,899
Deferred income taxes.................................. 5,529 5,793
Changes in working capital............................. (34,539) (55,047)
Other -- net........................................... 389 (15,303)
--------- ---------
Net cash provided by (used for) operating activities........ 3,435 (34,550)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures...................................... (19,382) (35,181)
Net proceeds from sale of assets.......................... 209 73
Purchase of businesses.................................... -- (57,170)
--------- ---------
Net cash used for investing activities...................... (19,173) (92,278)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Senior Credit Facility:
Borrowings............................................. 232,500 454,460
Repayments............................................. (186,219) (322,412)
Net proceeds from Trade Receivables Program............... (7,835) (4,977)
Purchase of common stock for treasury..................... (31,549) (2,315)
Proceeds from issuance of stock........................... 1,281 3,044
--------- ---------
Net cash provided by financing activities................... 8,178 127,800
--------- ---------
Net increase (decrease) in cash and cash equivalents........ (7,560) 972
Cash and cash equivalents at beginning of period............ 17,433 14,029
--------- ---------
Cash and cash equivalents at end of period.................. $ 9,873 $ 15,001
========= =========
</TABLE>
See accompanying notes
F-4
<PAGE> 79
WESTPOINT STEVENS INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON
STOCK AND MINIMUM
CAPITAL IN TREASURY STOCK PENSION
COMMON EXCESS OF ------------------- ACCUMULATED LIABILITY
SHARES PAR VALUE SHARES AMOUNT DEFICIT ADJUSTMENT TOTAL
------ ------------ ------- --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1997.... 70,296 $337,069 (10,895) $(134,223) $(625,047) $(813) $(423,014)
Exercise of management stock
options including tax
benefit................... 169 1,670 (7) -- -- -- 1,670
Issuance of stock pursuant
to Stock Bonus Plan
including tax benefit..... -- 851 212 2,421 -- -- 3,272
Purchase of treasury
shares.................... -- -- (1,319) (31,549) -- -- (31,549)
Net income.................. -- -- -- -- 11,703 -- 11,703
------ -------- ------- --------- --------- ----- ---------
Balance, March 31, 1998....... 70,465 $339,590 (12,009) $(163,351) $(613,344) $(813) $(437,918)
====== ======== ======= ========= ========= ===== =========
</TABLE>
See accompanying notes
F-5
<PAGE> 80
WESTPOINT STEVENS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 1998
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the annual report on Form
10-K for WestPoint Stevens Inc. (the "Company") for the year ended December 31,
1997.
2. INVENTORIES
The Company uses the last-in, first-out ("LIFO") method of accounting for
substantially all inventories for financial reporting purposes. Interim
determinations of LIFO inventories are necessarily based on management's
estimates of year-end inventory levels and costs. Subsequent changes in these
estimates, including the final year-end LIFO determination, and the effect of
such changes on earnings are recorded in the interim periods in which they
occur.
Inventories consisted of the following at March 31, 1998 and December 31,
1997 (in thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
--------- ------------
<S> <C> <C>
Finished goods.............................................. $189,872 $154,539
Work in progress............................................ 141,928 139,410
Raw materials and supplies.................................. 55,245 58,876
LIFO reserve................................................ (10,720) (12,007)
-------- --------
$376,325 $340,818
======== ========
</TABLE>
3. INDEBTEDNESS AND FINANCIAL ARRANGEMENTS
Indebtedness is as follows (in thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
---------- ------------
<S> <C> <C>
Short-term indebtedness
Senior Credit Facility Revolver........................... $ 87,714 $ 37,683
9% Sinking Fund Debentures due 2017....................... 3,750 3,750
---------- ----------
$ 91,464 $ 41,433
========== ==========
Long-term indebtedness
Senior Credit Facility Revolver........................... $ 125,000 $ 125,000
8 3/4% Senior Notes due 2001.............................. 400,000 400,000
9 3/8% Senior Subordinated Debentures due 2005............ 550,000 550,000
9% Sinking Fund Debentures due 2017....................... 67,500 71,250
---------- ----------
$1,142,500 $1,146,250
========== ==========
</TABLE>
F-6
<PAGE> 81
WESTPOINT STEVENS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
3. INDEBTEDNESS AND FINANCIAL ARRANGEMENTS -- (CONTINUED)
At March 31, 1998 and December 31, 1997, $103.9 million and $111.8 million,
respectively, of accounts receivable had been sold pursuant to a trade
receivables program (the "Trade Receivables Program") and the sale is reflected
as a reduction of accounts receivable in the accompanying Condensed Consolidated
Balance Sheets.
4. DISCONTINUED OPERATIONS
On August 27, 1997 the Company closed a transaction pursuant to which
WestPoint Stevens sold its subsidiaries AIH Inc., Alamac Knit Fabrics, Inc. and
Alamac Enterprises Inc. (collectively, "Alamac Knit Fabrics subsidiary" or
"Alamac"), other than cash, accounts receivable of approximately $42.5 million
and a yarn mill located in Whitmire, S.C., to Dyersburg Corporation for
approximately $126 million. The Whitmire facility was transferred by the Company
to Home Fashions to support the Company's expansion of its sheeting production
capacity. As a result of the transaction, the Company now reports the Alamac
Knit Fabrics subsidiary as a discontinued operation and the accompanying
financial statements have been adjusted and restated accordingly.
The condensed consolidated statements of income relating to the
discontinued operations are as follows (in thousands of dollars):
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,1997
--------------
<S> <C>
Net sales................................................... $61,690
Gross earnings.............................................. 7,845
Operating earnings.......................................... 3,610
Interest expense............................................ 1,992
Income from discontinued operations before income tax
expense................................................... 1,740
Income tax expense.......................................... 607
Income from discontinued operations......................... $ 1,133
</TABLE>
5. SUBSEQUENT EVENT
On April 29, 1998, the Company announced cash tender offers and consent
solicitations for all of its outstanding 8 3/4% Senior Notes due 2001 (the
"Notes") and its 9 3/8% Senior Subordinated Debentures due 2005 (the
"Debentures"). The purchase price for the Notes and Debentures will be based on
a fixed spread of 37.5 basis points and 50.0 basis points, respectively, over
the yield of the 5 5/8% U.S. Treasury Notes due November 30, 1998, on the second
business day prior to the expiration date. The tender offers are expected to
remain open until 12:00 midnight New York City time on May 27, 1998, unless they
are extended. WestPoint Stevens expects to purchase the tendered notes with the
proceeds from one or more series of newly issued debt securities. The tender
offer for each series of notes is contingent, among other things, upon the
holders of a majority of each series of notes tendering their notes and
consenting to the indenture amendments and upon the Company's ability to issue
new debt, at acceptable terms and conditions, to raise financing to pay for the
tender offers. The tender offer for each series of notes is also conditioned
upon the satisfaction of the conditions of the other offer.
F-7
<PAGE> 82
[THIS PAGE INTENTIONALLY LEFT BLANK]
F-8
<PAGE> 83
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
BOARD OF DIRECTORS AND STOCKHOLDERS
WESTPOINT STEVENS INC.
We have audited the accompanying consolidated balance sheets of WestPoint
Stevens Inc. as of December 31, 1997 and 1996, and the related consolidated
statements of income, stockholders' equity (deficit), and cash flows for each of
the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
WestPoint Stevens Inc. at December 31, 1997 and 1996, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1997 in conformity with generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
Columbus, Georgia
February 5, 1998
F-9
<PAGE> 84
WESTPOINT STEVENS INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1997 1996
---------- ----------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents................................. $ 17,433 $ 14,029
Accounts receivable (less allowances of $21,894 and
$22,861, respectively)................................. 92,990 66,949
Inventories............................................... 340,818 299,651
Prepaid expenses and other current assets................. 22,227 14,939
---------- ----------
Total current assets.............................. 473,468 395,568
Property, Plant and Equipment
Land...................................................... 6,463 8,271
Buildings and improvements................................ 270,360 276,935
Machinery and equipment................................... 779,867 737,253
Leasehold improvements.................................... 11,257 13,902
---------- ----------
1,067,947 1,036,361
Less accumulated depreciation and amortization............ (360,796) (330,393)
---------- ----------
Net property, plant and equipment................. 707,151 705,968
Other Assets
Deferred financing fees................................... 19,231 23,108
Prepaid pension and other assets.......................... 49,033 32,355
Goodwill.................................................. 37,223 --
---------- ----------
Total other assets................................ 105,487 55,463
---------- ----------
$1,286,106 $1,156,999
========== ==========
</TABLE>
See accompanying notes.
F-10
<PAGE> 85
WESTPOINT STEVENS INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1997 1996
---------- ----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Senior Credit Facility.................................... $ 37,683 $ 24,000
Current portion of long-term debt......................... 3,750 --
Accrued interest payable.................................. 6,820 6,525
Accounts payable.......................................... 75,655 73,475
Other accrued liabilities................................. 137,382 150,715
---------- ----------
Total current liabilities......................... 261,290 254,715
Long-Term Debt.............................................. 1,146,250 1,075,000
Noncurrent Liabilities
Deferred income taxes..................................... 217,178 179,057
Other liabilities......................................... 84,402 98,625
---------- ----------
Total noncurrent liabilities...................... 301,580 277,682
Stockholders' Equity (Deficit)
Common Stock and capital in excess of par value:
Common Stock, $.01 par value; 75,000,000 shares
authorized; 70,296,310 and 69,414,500 shares issued,
respectively.......................................... 337,069 329,394
Accumulated deficit....................................... (625,047) (703,068)
Treasury stock; 10,895,242 and 7,711,098 shares at cost,
respectively........................................... (134,223) (70,316)
Minimum pension liability adjustment, net of taxes of $478
and $3,763, respectively............................... (813) (6,408)
---------- ----------
Total stockholders' equity (deficit).............. (423,014) (450,398)
---------- ----------
$1,286,106 $1,156,999
========== ==========
</TABLE>
See accompanying notes.
F-11
<PAGE> 86
WESTPOINT STEVENS INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1997 1996 1995
---------- ---------- -----------
<S> <C> <C> <C>
Net sales............................................. $1,657,511 $1,501,795 $ 1,418,157
Cost of goods sold.................................... 1,237,657 1,129,386 1,059,044
---------- ---------- -----------
Gross earnings.............................. 419,854 372,409 359,113
Selling, general and administrative expenses.......... 204,981 183,891 180,391
Amortization of excess reorganization value........... -- -- 152,446
---------- ---------- -----------
Operating earnings.......................... 214,873 188,518 26,276
Interest expense...................................... 102,172 94,505 93,488
Other expense-net..................................... 2,461 2,976 3,154
---------- ---------- -----------
Income (loss) from continuing operations
before income tax expense................. 110,240 91,037 (70,366)
Income tax expense.................................... 40,982 33,085 31,970
---------- ---------- -----------
Income (loss) from continuing operations.............. 69,258 57,952 (102,336)
Income (loss) from discontinued operations............ 2,625 (287) (27,512)
Gain on sale of discontinued operations............... 6,138 -- --
---------- ---------- -----------
Net income (loss)........................... $ 78,021 $ 57,665 $ (129,848)
========== ========== ===========
Basic net income (loss) per common share:
Continuing operations............................... $ 1.14 $ .92 $ (1.57)
Discontinued operations............................. .04 -- (.42)
Gain on sale of discontinued operations............. .10 -- --
---------- ---------- -----------
Net income (loss) per common share.................. $ 1.28 $ .92 $ (1.99)
========== ========== ===========
Diluted net income (loss) per common share:
Continuing operations............................... $ 1.11 $ .91 $ (1.57)
Discontinued operations............................. .04 -- (.42)
Gain on sale of discontinued operations............. .10 -- --
---------- ---------- -----------
Net income (loss) per common share.................. $ 1.25 $ .91 $ (1.99)
========== ========== ===========
Basic average common shares outstanding............... 61,078 62,656 65,398
Dilutive effect of stock options and stock
bonus plan....................................... 1,576 1,018 --
---------- ---------- -----------
Diluted average common shares outstanding............. 62,654 63,674 65,398
========== ========== ===========
</TABLE>
See accompanying notes.
F-12
<PAGE> 87
WESTPOINT STEVENS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK MINIMUM
AND CAPITAL TREASURY STOCK PENSION
COMMON IN EXCESS OF ------------------- ACCUMULATED LIABILITY
SHARES PAR VALUE SHARES AMOUNT DEFICIT ADJUSTMENT TOTAL
------ ------------ ------- --------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1995.............. 34,319 $324,393 (663) $ (6,794) $(630,885) $(23,914) $(337,200)
Stock split effected as a stock
dividend.......................... 34,319 -- (662) -- -- -- --
------ -------- ------- --------- --------- -------- ---------
Balance, January 1, 1995, as
restated............................ 68,638 324,393 (1,325) (6,794) (630,885) (23,914) (337,200)
Exercise of management stock options
including tax benefit............. 556 3,490 -- -- -- -- 3,490
Purchase of treasury shares......... -- -- (3,917) (34,257) -- -- (34,257)
Redemption of purchase rights....... -- (33) -- -- -- -- (33)
Net loss............................ -- -- -- -- (129,848) -- (129,848)
Change in minimum pension liability
adjustment........................ -- -- -- -- -- (8,089) (8,089)
------ -------- ------- --------- --------- -------- ---------
Balance, December 31, 1995............ 69,194 327,850 (5,242) (41,051) (760,733) (32,003) (505,937)
Exercise of management stock options
including tax benefit............. 220 1,532 -- -- -- -- 1,532
Issuance of stock pursuant to Stock
Bonus Plan including tax
benefit........................... -- 12 116 1,226 -- -- 1,238
Purchase of treasury shares......... -- -- (2,585) (30,491) -- -- (30,491)
Net income.......................... -- -- -- -- 57,665 -- 57,665
Change in minimum pension liability
adjustment........................ -- -- -- -- -- 25,595 25,595
------ -------- ------- --------- --------- -------- ---------
Balance, December 31, 1996............ 69,414 329,394 (7,711) (70,316) (703,068) (6,408) (450,398)
Exercise of management stock options
including tax benefit............. 882 7,367 (13) -- -- -- 7,367
Issuance of stock pursuant to Stock
Bonus Plan including tax
benefit........................... -- 308 198 2,240 -- -- 2,548
Purchase of treasury shares......... -- -- (3,369) (66,147) -- -- (66,147)
Net income.......................... -- -- -- -- 78,021 -- 78,021
Change in minimum pension liability
adjustment........................ -- -- -- -- -- 5,595 5,595
------ -------- ------- --------- --------- -------- ---------
Balance, December 31, 1997............ 70,296 $337,069 (10,895) $(134,223) $(625,047) $ (813) $(423,014)
====== ======== ======= ========= ========= ======== =========
</TABLE>
See accompanying notes.
F-13
<PAGE> 88
WESTPOINT STEVENS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995
----------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income(loss)..................................... $ 78,021 $ 57,665 $(129,848)
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Amortization of excess reorganization value....... -- -- 177,675
Depreciation and other amortization............... 77,225 76,988 80,379
Gain on sale of discontinued operations........... (6,138) -- --
Deferred income taxes............................. 34,508 26,153 26,172
Changes in assets and liabilities excluding the
effect of acquisitions, dispositions and the
Trade Receivables Program:
Accounts receivable............................. 1,566 3,939 (2,694)
Inventories..................................... (54,024) 20,817 (23,105)
Prepaid expenses and other current assets....... (6,760) 4,567 (5,522)
Accrued interest payable........................ 283 (118) 113
Accounts payable and other accrued
liabilities.................................. (18,113) (10,046) 15,971
Other-net....................................... (22,976) (8,964) (34,398)
----------- --------- ---------
Total adjustments............................ 5,571 113,336 234,591
----------- --------- ---------
Net cash provided by operating activities.............. 83,592 171,001 104,743
----------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures................................. (152,137) (99,943) (102,197)
Net proceeds from sale of business................... 120,840 -- --
Net proceeds from sale of assets..................... 1,081 1,098 3,066
Purchase of businesses............................... (57,170) -- --
----------- --------- ---------
Net cash used for investing activities................. (87,386) (98,845) (99,131)
----------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Senior Credit Facility:
Borrowings........................................ 1,177,299 645,500 564,500
Repayments........................................ (1,088,616) (694,500) (499,500)
Net proceeds from Trade Receivables Program.......... (21,233) 12,045 (391)
Proceeds from issuance of Common Stock............... 5,895 1,332 2,600
Purchase of Common Stock for treasury................ (66,147) (30,491) (34,257)
Payment of deferred taxes............................ -- -- (32,500)
Redemption of purchase rights........................ -- -- (33)
----------- --------- ---------
Net cash provided by (used for) financing activities... 7,198 (66,114) 419
----------- --------- ---------
Net increase in cash and cash equivalents.............. 3,404 6,042 6,031
Cash and cash equivalents at beginning of period....... 14,029 7,987 1,956
----------- --------- ---------
Cash and cash equivalents at end of period............. $ 17,433 $ 14,029 $ 7,987
=========== ========= =========
</TABLE>
See accompanying notes.
F-14
<PAGE> 89
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
BUSINESS. WestPoint Stevens Inc. (the "Company") is a manufacturer and
marketer of bed and bath products, including sheets, pillowcases, comforters,
blankets, bedspreads, towels and related products. The Company conducts its
operations in the consumer home fashions (bed and bath products) industry.
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements of the
Company include the accounts of the Company and all of its subsidiaries. All
material intercompany accounts and transactions have been eliminated.
USE OF ESTIMATES. The preparation of the financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
CONCENTRATIONS OF CREDIT RISK. Financial instruments that potentially
subject the Company to significant concentrations of credit risk consist
principally of cash investments and trade accounts receivable.
The Company maintains cash and cash equivalents and certain other financial
instruments with various financial institutions. The Company performs periodic
evaluations of the relative credit standing of those financial institutions that
are considered in the Company's investment strategy.
Concentrations of credit risk with respect to trade accounts receivable are
limited due to the large number of entities comprising the Company's customer
base. However, as of December 31, 1997, substantially all of the Company's
receivables were from companies in the retail industry.
CASH AND CASH EQUIVALENTS. The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash
equivalents. Short-term investments (consisting primarily of commercial paper
and certificates of deposit) totaling approximately $17 million and $14 million
are included in cash and cash equivalents at December 31, 1997 and 1996,
respectively. These investments are carried at cost, which approximates market
value.
INVENTORIES. Inventory costs include material, labor and factory overhead.
Inventories are stated at the lower of cost or market (net realizable value). At
December 31, 1997 and 1996, approximately 84% and 85%, respectively, of the
Company's inventories are valued at the lower of cost or market using the
"dollar value" last-in, first-out ("LIFO") method. The remainder of the
inventories (approximately $53.4 million and $44.1 million at December 31, 1997
and 1996, respectively) are valued at the lower of cost (substantially first-in,
first-out method) or market.
Inventories consist of the following (in thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Finished goods.............................................. $154,539 $134,690
Work in progress............................................ 139,410 114,140
Raw materials and supplies.................................. 58,876 71,038
LIFO reserve................................................ (12,007) (20,217)
-------- --------
$340,818 $299,651
======== ========
</TABLE>
PROPERTY, PLANT AND EQUIPMENT. As a result of the adoption of Fresh Start
reporting, as of September 30, 1992, property, plant and equipment were adjusted
to their estimated fair values and historical accumulated depreciation was
eliminated. Additions since September 30, 1992 are stated at cost.
F-15
<PAGE> 90
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES -- (CONTINUED)
Depreciation is computed over estimated useful lives using the
straight-line method for financial reporting purposes and accelerated methods
for income tax reporting. Depreciation expense was approximately $76.5 million,
$77.0 million, and $80.4 million in the years ended December 31, 1997, 1996 and
1995, respectively.
Estimated useful lives for property, plant and equipment are as follows:
<TABLE>
<S> <C>
Buildings and improvements.................................. 10 to 40 Years
Machinery and equipment..................................... 3 to 18 Years
Leasehold improvements...................................... Lease Terms
</TABLE>
REORGANIZATION VALUE IN EXCESS OF AMOUNTS ALLOCATED TO IDENTIFIABLE ASSETS
("EXCESS REORGANIZATION VALUE"). In September 1992, the Company completed a
"prepackaged" plan of reorganization (the "Plan") and in accordance with SOP
90-7 the Company established a new basis of accounting ("Fresh Start"). In Fresh
Start reporting, the Company's assets and liabilities were adjusted to their
fair values as of September 30, 1992. The excess of the reorganization value
over the value of identifiable assets, $637.5 million, was reported as Excess
Reorganization Value at September 30, 1992. Excess Reorganization Value has been
amortized on a straight-line basis over three years and was fully amortized by
September 1995.
HEDGING TRANSACTIONS. The Company engages in hedging activities within the
normal course of its business. Management has been authorized to manage exposure
to price fluctuations relevant to the purchase of cotton through the use of a
variety of derivative nonfinancial instruments. Derivative nonfinancial
instruments require or permit settlement by the delivery of commodities and
include exchange traded commodity futures contracts and options. Gains and
losses on these hedges, which were not material at December 31, 1997 and 1996,
are deferred and subsequently recognized in income as cost of goods sold in the
same period as the hedged item. The Company does not hold or issue derivative
instruments for trading purposes.
INCOME TAXES. The Company accounts for income taxes under Statement No.
109, Accounting for Income Taxes. Under Statement 109, deferred income taxes are
provided at the enacted marginal rates on the differences between the financial
statement and income tax bases of assets and liabilities.
PENSION PLANS. The Company has defined benefit pension plans covering
essentially all employees. The benefits are based on years of service and
compensation. The Company's practice is to fund amounts which are required by
the Employee Retirement Income Security Act of 1974.
The Company also sponsors an employee savings plan covering eligible
employees who elect to participate. Participants in this plan make contributions
as a percent of earnings. The Company matches certain amounts of employee
contributions (see Note 3 "Employee Benefit Plans -- Retirement Savings Plan").
OTHER EMPLOYEE BENEFITS. The Company accounts for post-retirement and
post-employment benefits in accordance with Statement No. 106, Employer's
Accounting for Post Retirement Benefits Other Than Pensions, and Statement No.
112, Employer's Accounting for Postemployment Benefits.
STOCK BASED COMPENSATION. The Company grants stock options for a fixed
number of shares in accordance with certain of its benefit plans. The Company
accounts for stock option grants in accordance with APB Opinion No. 25,
Accounting for Stock Issued to Employees, and, accordingly, recognizes no
compensation expense for the stock option grants if the exercise price is equal
to or more than the fair value of the shares at the date of grant.
FAIR VALUE DISCLOSURES. Cash and cash equivalents: The carrying amounts
reported in the balance sheets for cash and cash equivalents approximates its
fair value.
F-16
<PAGE> 91
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES -- (CONTINUED)
Accounts receivable and accounts payable: The carrying amounts reported in
the balance sheets for accounts receivable and accounts payable approximate
their fair value.
Long-term and short-term debt: The fair value of the Company's outstanding
debt is estimated based on the quoted market prices for the same issues or on
the current rates offered to the Company for debt of similar issues. The fair
value of the $1,188 million and $1,099 million of outstanding debt at December
31, 1997 and 1996 was approximately $1,235 million and $1,127 million,
respectively.
ACQUISITIONS AND GOODWILL. The Company's acquisitions are accounted for
under the purchase method of accounting. Under the purchase method of
accounting, the results of operations of the acquired businesses are included in
the accompanying consolidated financial statements as of their respective
acquisition dates. The assets and liabilities of acquired businesses are
included based on an allocation of the purchase price. The excess of the
purchase price over identified assets is classified as goodwill and is amortized
on a straight-line basis over a forty year period.
During the year ended December 31, 1997, the Company acquired certain
manufacturing facilities and other operations for approximately $57 million. The
assets acquired consisted of property and equipment, inventories and other
related assets. The excess of the purchase price over the assets acquired was
approximately $38 million.
Pro forma results have not been presented as they are not significantly
different than reported amounts.
IMPAIRMENT OF LONG-LIVED ASSETS. Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long- Lived Assets to Be Disposed Of,
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company adopted Statement 121 in
the first quarter of 1996, and the effect of adoption was not material.
COMMON STOCK. On February 2, 1998, the Board of Directors declared a
two-for-one split of the Company's common stock, effected in the form of a stock
dividend payable on March 2, 1998 to stockholders of record on February 16,
1998. All agreements concerning stock options and other commitments payable in
shares of the Company's common stock provide for the issuance of additional
shares due to the declaration of the stock split. This stock split has been
reflected in the Consolidated Statements of Stockholders' Equity (Deficit) at
January 1, 1995. All references to number of shares, except shares authorized,
and to per share information in the accompanying consolidated financial
statements have been adjusted to reflect the stock split on a retroactive basis.
ACCOUNTING POLICIES NOT YET ADOPTED. In June 1997, the Financial
Accounting Standards Board issued Statement No. 130, Reporting Comprehensive
Income, and Statement No. 131, Disclosures About Segments of an Enterprise and
Related Information. Statement 130 establishes standards for the reporting and
display of comprehensive income and its components in a full set of general
purpose financial statements. Statement 131 generally requires that companies
report segment information for operating segments which are revenue producing
components and for which separate financial information is produced internally.
The Company plans to adopt Statement 130 and Statement 131 in 1998, but has
not yet completed its analysis of the impact, if any, that these statements may
have on its financial statements.
EARNINGS PER COMMON SHARE. In 1997, the Financial Accounting Standards
Board issued Statement No. 128, Earnings per Share. Statement 128 replaced the
calculation of primary and fully diluted earnings per share with basic and
diluted earnings per share. Unlike primary earnings per share, basic earnings
per share excludes any dilutive effects of options, warrants and convertible
securities. Diluted earnings per share is very
F-17
<PAGE> 92
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES -- (CONTINUED)
similar to the previously reported fully diluted earnings per share. All
earnings per share amounts for all periods have been presented, and where
appropriate, restated to conform to the Statement 128 requirements.
2. INDEBTEDNESS AND FINANCIAL ARRANGEMENTS
Indebtedness is as follows (in thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1997 1996
---------- ----------
<S> <C> <C>
Short-term indebtedness
Senior Credit Facility Revolver........................... $ 37,683 $ 24,000
9% Sinking Fund Debentures due 2017....................... 3,750 --
---------- ----------
$ 41,433 $ 24,000
========== ==========
Long-term indebtedness
Senior Credit Facility Revolver........................... $ 125,000 $ 50,000
8 3/4% Senior Notes due 2001.............................. 400,000 400,000
9 3/8% Senior Subordinated Debentures due 2005............ 550,000 550,000
9% Sinking Fund Debentures due 2017....................... 71,250 75,000
---------- ----------
$1,146,250 $1,075,000
========== ==========
</TABLE>
The Company's Senior Credit Facility with certain lenders (collectively,
the "Banks") consists of a $349.6 million revolving credit facility ("Revolver")
due May 23, 2001. The Company has included $125 million of Revolver in long-term
debt at December 31, 1997 because the Company intends that at least that amount
would remain outstanding during 1998. Availability under the Senior Credit
Facility was reduced by approximately $27.2 million of outstanding letters of
credit at December 31, 1997.
At the option of the Company, interest under the Senior Credit Facility
will be payable either at the prime rate or at LIBOR plus 1.25%. Upon the
Company achieving certain ratios of EBITDA (as defined) to cash interest
expense, interest rates can be reduced up to 0.5%. Based on the achievement of
certain ratios of EBITDA for the period ended September 30, 1997, the interest
rates under this facility were reduced .25% to LIBOR plus 1% at December 31,
1997. The Company pays a commitment fee in an amount equal to 0.375% of the
unused portion of each Bank's commitment under the Revolver. The loans under the
Senior Credit Facility are secured by the pledge of all the stock of the
Company's material subsidiaries and a first priority lien on substantially all
of the assets of the Company, other than the Company's accounts receivable.
The 8 3/4% Senior Notes due 2001 (the "Notes") are general unsecured
obligations of the Company and rank senior in right of payment to the 9 3/8%
Senior Subordinated Debentures due 2005 (the "Debentures") and pari passu in
right of payment with all indebtedness of the Company under the Senior Credit
Facility and all other existing or future Senior Indebtedness of the Company.
The Debentures are general unsecured obligations of the Company and subordinate
in right of payment to the Notes and all other existing and future Senior
Indebtedness of the Company, including indebtedness under the Senior Credit
Facility, pari passu with any future senior subordinated indebtedness and senior
to any future subordinated indebtedness of the Company.
The Notes bear interest at the rate of 8 3/4% per annum, payable
semi-annually on June 15 and December 15 of each year. The Notes are redeemable,
in whole or in part at any time on or after December 15, 1998, at the option of
the Company, at the redemption prices, as defined, together with accrued and
unpaid interest to the date of redemption. The Debentures bear interest at the
rate of 9 3/8% per annum, payable semi-annually on June 15 and December 15 of
each year. The Debentures are redeemable, in whole or in part at any time on or
F-18
<PAGE> 93
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
2. INDEBTEDNESS AND FINANCIAL ARRANGEMENTS -- (CONTINUED)
after December 15, 1998, at the option of the Company, at the redemption prices,
as defined, together with accrued and unpaid interest to the date of the
redemption.
In addition, in the event of a Change of Control (as defined), the Company
will be obligated to make an offer to redeem a holder's Notes or Debentures at a
redemption price of 101% of the principal amount thereof plus accrued and unpaid
interest thereon to the date of redemption. The Company may also redeem each of
the Notes or Debentures upon a Change of Control at a redemption price equal to
the greater of 101% of the principal amount thereof, together with accrued
interest thereon to the date of redemption or 100% of the principal amount
thereof, plus a Make-Whole Premium (as defined).
The Company's credit agreements contain a number of customary covenants
including, among others, restrictions on the incurrence of indebtedness,
transactions with affiliates, and certain asset dispositions. Certain provisions
require the Company to maintain certain financial ratios, such as a minimum
current ratio, and a minimum interest coverage ratio. A minimum consolidated net
worth, as defined, is also mandated. At December 31, 1997, the Company could
make restricted payments aggregating approximately $27.4 million.
The Company, through a "bankruptcy remote" receivables subsidiary
("Receivables Subsidiary"), has a trade receivables program ("Trade Receivables
Program") which provides for the sale of accounts receivable, on a revolving
basis. At December 31, 1997 and 1996, $111.8 million and $133 million,
respectively, had been sold under this program and the sale is reflected as a
reduction of accounts receivable in the accompanying Consolidated Balance
Sheets. The Trade Receivables Program was financed through the issuance of (a)
$115 million of Floating Rate Class A Trade Receivables Participation
Certificates ("Class A Certificates"); (b) $18 million of Floating Rate Class B
Trade Receivables Participation Certificates ("Class B Certificates"); and (c)
$27 million of Investor Revolving Certificates. The Class A Certificates and
Class B Certificates bear interest at LIBOR plus .27% and LIBOR plus .57%,
respectively, and the Investor Revolving Certificates bear interest at LIBOR
plus .375%. The expected final payment date of amounts outstanding under the
Trade Receivables Program is May 18, 1999, but earlier termination could occur
upon the occurrence of certain defined events. The cost of the Trade Receivables
Program is charged to selling and administrative expense.
The Trade Receivables Program requires the Company and Receivables
Subsidiary to perform certain servicing obligations with respect to the existing
and future trade receivables sold by the Company. The Company is not subject to
any financial covenants under the Trade Receivables Program, but the
documentation for the Trade Receivables Program provides for early termination
of the Trade Receivables Program and early payment of the securities issued
thereunder upon certain events, which include the incurrence of losses or
delinquencies on the receivables in excess of certain levels or the bankruptcy
or insolvency of the Company.
Excluding amounts related to the Revolver, maturities of long-term debt for
1998, 1999 and 2000 are $3.75 million per year, $403.75 million in 2001, and
$3.75 million in 2002.
F-19
<PAGE> 94
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. EMPLOYEE BENEFIT PLANS
PENSION PLANS
Pension expense related to the Company's defined benefit plans, is
comprised of the following (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Service cost-benefits earned during period................. $ 7,138 $ 8,244 $ 6,174
Interest cost on projected benefit obligation.............. 24,410 24,255 23,757
Deferred actuarial gains (losses).......................... 24,580 (1,170) 33,038
-------- -------- --------
Subtotal................................................... 56,128 31,329 62,969
Actual returns on plan assets.............................. (53,483) (22,276) (49,969)
-------- -------- --------
Total defined benefit plan expense......................... $ 2,645 $ 9,053 $ 13,000
======== ======== ========
Actuarial assumptions for pension expense:
Discount rate............................................ 8.25% 7.25% 8.5%
Average rate of increase in compensation levels.......... 3.5% 4% 4%
Expected long-term rate of return on plan assets......... 10% 10% 8.5%
</TABLE>
The following table sets forth the funded status of the Company's pension
plans and amounts recognized in the accompanying Consolidated Balance Sheets at
December 31, 1997 and 1996 (in thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------
1997 1996
----------- --------------------------
ASSETS ASSETS ACCUMULATED
EXCEED EXCEED BENEFITS
ACCUMULATED ACCUMULATED EXCEED
BENEFITS BENEFITS ASSETS
----------- ----------- -----------
<S> <C> <C> <C>
Actuarial present value of projected benefit
obligation:
Vested............................................... $286,334 $ 85,620 $200,902
Nonvested............................................ 8,259 3,835 5,706
-------- -------- --------
Accumulated benefit obligation......................... 294,593 89,455 206,608
Effect of projected future salary increases............ 16,408 -- 16,918
-------- -------- --------
Projected benefit obligation........................... 311,001 89,455 223,526
Plan assets at fair value.............................. 331,396 102,718 197,174
-------- -------- --------
Projected benefit obligation less than (in excess of)
plan assets.......................................... 20,395 13,263 (26,352)
Unrecognized net actuarial losses...................... 21,740 15,458 27,089
Minimum pension liability adjustment................... (1,291) -- (10,171)
-------- -------- --------
Pension related asset (liability) included in
Consolidated Balance Sheets.......................... $ 40,844 $ 28,721 $ (9,434)
======== ======== ========
Actuarial assumptions for funded status information:
Discount rate........................................ 7.75% 8.25% 8.25%
Average rate of increase in compensation levels...... 3.5% -- 3.5%
</TABLE>
At December 31, 1997, the Company changed the discount rate to 7.75% from
8.25% which increased the projected benefit obligation by approximately $20.5
million. At December 31, 1996, the Company changed the
F-20
<PAGE> 95
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. EMPLOYEE BENEFIT PLANS -- (CONTINUED)
discount rate to 8.25% from 7.25% which decreased the projected benefit
obligation by approximately $38.5 million.
The provisions of Financial Accounting Standards Board Statement No. 87,
Employee Accounting for Pensions, require recognition in the balance sheet of an
additional minimum liability for pension plans with accumulated benefits in
excess of plan assets. At December 31, 1997 and 1996, minimum pension liability
adjustments of $1.3 million ($0.8 million after related income taxes) and $10.2
million ($6.4 million after related income taxes), respectively, are included in
the accompanying Consolidated Balance Sheets.
Plan assets are primarily invested in United States Government and
corporate debt securities, equity securities and fixed income insurance
contracts. At December 31, 1997 and 1996, the Company's pension plans held Notes
and Debentures of the Company with a market value of $14.2 million and $17.0
million, respectively.
RETIREMENT SAVINGS PLAN
The Company matches fifty percent of each employee's before-tax
contributions up to two percent of the employee's compensation. Company
contributions may be made either in cash or in shares of Common Stock of the
Company. During 1997, 1996 and 1995, the Company charged $2.2 million, $2.4
million and $2.4 million, respectively, to expense in connection with the 401(k)
Plan.
OTHER POST-RETIREMENT BENEFIT PLANS
In addition to sponsoring defined benefit pension plans, the Company
sponsors various defined benefit post-retirement plans that provide health care
and life insurance benefits to certain current and future retirees. All such
post-retirement benefit plans are unfunded. The following table presents the
status of post-retirement plans (in thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1997 1996
------- -------
<S> <C> <C>
Accumulated post-retirement benefit obligation:
Retirees.................................................. $17,164 $17,815
Fully eligible active plan participants................... 242 209
Other active plan participants............................ 111 87
Unrecognized net gain..................................... 4,559 4,627
------- -------
Accrued post-retirement benefit obligation.................. $22,076 $22,738
======= =======
</TABLE>
Net periodic post-retirement benefit plans expense is not material during
the three year period ended December 31, 1997.
As of December 31, 1997, the actuarial assumptions include a discount rate
of 7.75% and a medical care trend rate of 7.8% for 1998, grading down to 6% by
2000. These trend rates reflect the Company's prior experience and management's
expectation of future rates. Increasing the assumed health care cost trend rates
by one percentage point in each year would increase the accumulated
post-retirement benefit plans obligations as of December 31, 1997 by
approximately $0.5 million, and the aggregate service and interest cost
components of net periodic post-retirement benefit cost for the year ended
December 31, 1997 by an immaterial amount.
F-21
<PAGE> 96
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. OTHER EXPENSE -- NET
Included in "Other expense-net" in the accompanying Consolidated Statements
of Operations for each of the years in the three year period ended December 31,
1997, 1996 and 1995, are the amortization and write-off of deferred financing
fees of $3.9 million less certain miscellaneous income items.
5. INCOME TAXES
The Company accounts for income taxes under Statement 109. Under Statement
109, deferred income taxes are provided at the enacted marginal rates on the
difference between the financial statement and income tax bases of assets and
liabilities. Deferred income tax provisions or benefits are based on the change
in the deferred tax assets and liabilities from period to period.
The total provision (benefit) for income taxes consisted of the following
(in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Current
Federal............................................. $ 2,945 $ 957 $ 2,311
State............................................... 5,302 630 2,475
Foreign............................................. 461 621 (145)
Deferred.............................................. 37,247 30,492 25,809
------- ------- -------
$45,955 $32,700 $30,450
======= ======= =======
</TABLE>
Income tax expense (benefit) is included in the financial statements as
follows (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Continuing operations................................. $40,982 $33,085 $31,970
Discontinued operations............................... 1,368 (385) (1,520)
Gain on sale of discontinued operations............... 3,605 -- --
------- ------- -------
$45,955 $32,700 $30,450
======= ======= =======
</TABLE>
Income tax expense (benefit) differs from the statutory federal income tax
rate of 35% for the following reasons (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1996 1995
------- ------- --------
<S> <C> <C> <C>
Income tax expense (benefit) at federal statutory
income tax rate.................................... $43,391 $31,628 $(34,789)
State income taxes (net of effect of federal income
tax)............................................... 2,264 1,183 1,586
Interest on prior years' taxes....................... -- -- 2,051
Amortization of Excess Reorganization Value.......... -- -- 62,187
Other-net............................................ 300 (111) (585)
------- ------- --------
Income tax expense................................... $45,955 $32,700 $ 30,450
======= ======= ========
</TABLE>
F-22
<PAGE> 97
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. INCOME TAXES -- (CONTINUED)
Components of the net deferred income tax liability are as follows (in
thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1997 1996
--------- ---------
<S> <C> <C>
Deferred tax liabilities:
Basis differences resulting from reorganization........... $(137,783) $(108,634)
Accelerated depreciation.................................. (69,620) (75,930)
Income taxes related to prior years, including interest... (16,989) (18,755)
Nondeductible expenses.................................... (44,774) (42,503)
Other..................................................... (1,716) (4,715)
Deferred tax assets:
Reserves for litigation, environmental, employee benefits
and other.............................................. 45,244 62,057
Other..................................................... 8,460 9,423
--------- ---------
$(217,178) $(179,057)
========= =========
</TABLE>
At December 31, 1997, the Company has estimated operating loss
carryforwards ("NOLs") expiring in 2004-2009 of approximately $301 million
available to reduce future federal taxable income. Due to the ownership change
which occurred September 16, 1992 in connection with a reorganization, the
utilization of NOLs generated prior to this date are subject to limitation under
Internal Revenue Code Section 382.
During prior years, the Internal Revenue Service (the "Service") issued
Revenue Agent's Reports to Cluett, Peabody & Co., Inc., J. P. Stevens & Co.,
Inc., and West Point -- Pepperell, Inc. asserting income tax deficiencies and
additions to tax totaling approximately $89 million related to tax years 1979
and 1982 through 1989. This amount did not include interest which accrues from
the dates the taxes were due until the dates of the payments. During 1995, the
Company reached agreements with the Service concerning all of the Revenue
Agent's Reports. As a result, the Company made payments in December 1995,
totaling approximately $33 million, which includes interest of approximately $19
million that was tax deductible. This liability had been accrued in previous
periods and, accordingly, no additional income tax expense has been recognized
in 1995 related to the agreements.
6. STOCKHOLDERS' EQUITY
STOCK OPTIONS
The Company has granted stock options under various stock plans to key
employees and to non-employee directors. Also the Company granted certain
contractual stock options which were not granted pursuant to any plan. The
Omnibus Stock Incentive Plan (the "Omnibus Stock Plan") an amendment and
restatement of the 1993 Management Stock Option Plan covers approximately 5.4
million shares of Common Stock, and also replaced the 1994 Non-Employee
Directors Stock Option Plan after the 300,000 shares of Common Stock authorized
under that plan had been granted. The Omnibus Stock Plan allows for six
categories of incentive awards: options, stock appreciation rights, restricted
shares, deferred shares, performance shares and performance units. Key employees
are granted options under the various plans at terms (purchase price, expiration
date and vesting schedule) established by a committee of the Board of Directors.
Options granted either in accordance with contractual arrangements or pursuant
to the various plans have been at a price which is approximately equal to fair
market value on the date of grant. Such options are exercisable on the date of
grant for a period of ten years. The Company has elected to follow Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB
25) and related Interpretations in accounting for its employee stock options
because, as discussed below, the alternative fair value accounting provided for
under
F-23
<PAGE> 98
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. STOCKHOLDERS' EQUITY -- (CONTINUED)
Statement No. 123, Accounting for Stock-Based Compensation, requires use of
option valuation models that were not developed for use in valuing employee
stock options. Under APB 25, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.
Pro forma information regarding net income and earnings per share is
required by Statement 123, which also requires that the information be
determined as if the Company has accounted for its employee stock options
granted using the fair value method of that Statement. The fair value for these
options was estimated at the date of grant using a Black-Scholes option pricing
model with the following weighted-average assumptions for 1997, 1996 and 1995,
respectively: risk-free interest rates of 6.1%, 6.2% and 7%; no dividend yield;
volatility factors of the expected market price of the Company's common stock of
.25, .29 and .29; and a weighted-average expected life of the option of 8 years.
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. Pro forma
stock based compensation costs resulted in 1997 pro forma net income of $75.5
million (or pro forma diluted net income per share of $1.20), 1996 pro forma net
income of $57.2 million (or pro forma diluted net income per share of $.90) and
1995 pro forma net loss of $130.2 million (or pro forma diluted net loss per
share of $1.99).
Changes in outstanding options were as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES
(IN THOUSANDS) WEIGHTED
--------------------------------- AVERAGE
QUALIFIED OPTION PRICE
PLANS CONTRACTUAL TOTAL PER SHARE
--------- ----------- ----- ------------
<S> <C> <C> <C> <C>
Options outstanding at December 31, 1994.......... 1,626 1,020 2,646 $ 6.11
Granted......................................... 188 -- 188 $ 7.48
Exercised and terminated........................ (76) (500) (576) $ 4.73
----- ----- ----- ------
Options outstanding at December 31, 1995.......... 1,738 520 2,258 $ 6.57
Granted......................................... 1,776 -- 1,776 $13.34
Exercised and terminated........................ (134) (110) (244) $ 6.07
----- ----- ----- ------
Options outstanding at December 31, 1996.......... 3,380 410 3,790 $ 9.78
Granted......................................... 1,176 20 1,196 $20.07
Exercised and terminated........................ (514) (390) (904) $ 7.15
----- ----- ----- ------
Options outstanding at December 31, 1997.......... 4,042 40 4,082 $13.37
===== ===== ===== ======
</TABLE>
At December 31, 1997, options for 2,146,270 shares were exercisable.
STOCK BONUS PLAN
During 1995, the Company's Board of Directors approved the WestPoint
Stevens Inc. 1995 Key Employee Stock Bonus Plan (the "Stock Bonus Plan")
covering 1,000,000 shares of the Company's Common
F-24
<PAGE> 99
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. STOCKHOLDERS' EQUITY -- (CONTINUED)
Stock. Under the Stock Bonus Plan, the Company may grant bonus awards of shares
of Common Stock to key employees based on the Company's achievement of targeted
earnings levels during the Company's fiscal year. For 1997, 1996 and 1995,
respectively, bonus awards were deemed earned by forty-seven, fifty-three and
thirty-nine employees covering an aggregate of 398,456 shares, 643,464 shares
and 676,936 shares of Common Stock. The Stock Bonus Plan provides for vesting of
the bonus awards of 20 percent in the year of award and 20 percent in each of
the next four years if the employee continues employment with the Company. The
Company charged $4.4 million, $3.4 million and $1.4 million to expense in 1997,
1996 and 1995, respectively, in connection with the Stock Bonus Plan.
7. LEASE COMMITMENTS
The Company's operating leases, including sublease arrangements with
divested operations, consist of land, sales offices, manufacturing equipment,
warehouses and data processing equipment with expiration dates at various times
during the next thirteen years. Some of the operating leases stipulate that the
Company can (a) purchase the properties at their then fair market values or (b)
renew the leases at their then fair rental values. Some of the Company's leases,
principally sales office space and manufacturing equipment, are sublet to others
under leases expiring over the next four years.
The following is a schedule, by year, of future minimum lease payments as
of December 31, 1997 under operating leases, including sublease arrangements,
that have initial or remaining noncancelable lease terms in excess of one year
(in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- ------------------------
<S> <C>
1998........................................................ $ 25,404
1999........................................................ 23,987
2000........................................................ 17,318
2001........................................................ 12,571
2002........................................................ 9,650
Years subsequent to 2002.................................... 22,336
--------
Total minimum lease payments................................ 111,266
Minimum sublease rentals.................................... (9,680)
--------
Net minimum lease payments required for operating leases.... $101,586
========
</TABLE>
The following schedule shows the composition of total rental expense for
all operating leases, except those with terms of one month or less that were not
renewed (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Minimum lease payments...................................... $30,662 $40,217 $42,070
Less sublease rentals....................................... (3,986) (4,761) (7,464)
------- ------- -------
Rent expense................................................ $26,676 $35,456 $34,606
======= ======= =======
</TABLE>
8. LITIGATION AND CONTINGENT LIABILITIES
The Company is subject to various federal, state and local environmental
laws and regulations governing, among other things, the discharge, storage,
handling and disposal of a variety of hazardous and non-hazardous substances and
wastes used in or resulting from its operations and potential remediation
obligations thereunder. Certain of the Company's facilities (including certain
facilities no longer owned or utilized by the
F-25
<PAGE> 100
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
8. LITIGATION AND CONTINGENT LIABILITIES -- (CONTINUED)
Company) have been cited or are being investigated with respect to alleged
violations of such laws and regulations. The Company is cooperating fully with
relevant parties and authorities in all such matters. The Company believes that
it has adequately provided in its financial statements for any expenses and
liabilities that may result from such matters. The Company also is insured with
respect to certain of such matters. The Company's operations are governed by
laws and regulations relating to employee safety and health which, among other
things, establish exposure limitations for cotton dust, formaldehyde, asbestos
and noise, and regulate chemical and ergonomic hazards in the workplace.
Although the Company does not expect that compliance with any of such laws and
regulations will adversely affect the Company's operations, there can be no
assurance such regulatory requirements will not become more stringent in the
future or that the Company will not incur significant costs in the future to
comply with such requirements.
The Company and its subsidiaries are involved in various other legal
proceedings, both as plaintiff and as defendant, which are normal to its
business. It is the opinion of management that the aforementioned actions and
claims, if determined adversely to the Company, will not have a material adverse
effect on the financial condition or operations of the Company taken as a whole.
9. CASH FLOW INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
(In thousands of dollars)
Supplemental disclosures of cash flow information:
Cash paid during the period:
Interest...................................... $107,410 $102,565 $101,195
======== ======== ========
Income taxes.................................. $ 9,444 $ 5,733 $ 4,433
======== ======== ========
</TABLE>
10. DISCONTINUED OPERATIONS
On August 27, 1997 the Company closed a transaction pursuant to which
WestPoint Stevens sold its subsidiaries AIH Inc., Alamac Knit Fabrics, Inc. and
Alamac Enterprises Inc. (collectively, "Alamac Knit Fabrics subsidiary" or
"Alamac"), other than cash, accounts receivable of approximately $42.5 million
and a yarn mill located in Whitmire, S.C., to Dyersburg Corporation for
approximately $126 million. The Whitmire facility was transferred by the Company
to Home Fashions to support the Company's expansion of its sheeting production
capacity. As a result of the transaction, the Company now accounts for the
Alamac Knit Fabrics subsidiary as a discontinued operation and the accompanying
financial statements have been adjusted and restated accordingly.
F-26
<PAGE> 101
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
10. DISCONTINUED OPERATIONS -- (CONTINUED)
Data relative to Alamac Knit Fabrics subsidiary is as follows (in thousands
of dollars):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
PERIOD ENDED ------------------------
AUGUST 27, 1997 1996 1995
--------------- ---------- ----------
<S> <C> <C> <C>
Net sales............................................... $162,428 $222,019 $231,721
======== ======== ========
Operating earnings before amortization of excess
reorganization value.................................. $ 9,189 $ 7,051 $ 3,962
======== ======== ========
Operating earnings (loss)............................... $ 9,189 $ 7,051 $(21,267)
======== ======== ========
Net income (loss)....................................... $ 2,625 $ (287) $(27,512)
======== ======== ========
Gain on sale, net of taxes of $3,605.................... $ 6,138
========
Capital expenditures, including capital leases.......... $ 3,237 $ 4,998 $ 9,757
======== ======== ========
Amortization of excess reorganization value............. $ 25,229
========
Depreciation and other amortization..................... $ 5,501 $ 8,059 $ 11,117
======== ======== ========
</TABLE>
11. MAJOR CUSTOMER INFORMATION
The Company's consumer home fashions products are sold primarily to
domestic chain stores, mass merchants, department and specialty stores. Sales to
two customers as a percent of net sales, amounted to approximately 13% and 10%
for the year ended December 31, 1997. Sales to three customers as a percent of
net sales, amounted to approximately 13%, 12% and 10% for the year ended
December 31, 1996. Sales to three customers as a percent of net sales, amounted
to approximately 12%, 12% and 11% for the year ended December 31, 1995. During
1997, 1996 and 1995, the Company's six largest customers accounted for
approximately 52%, 55% and 54%, respectively, of the Company's net sales.
F-27
<PAGE> 102
WESTPOINT STEVENS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
12. QUARTERLY FINANCIAL SUMMARY (UNAUDITED)
<TABLE>
<CAPTION>
QUARTER
------------------------------------------------
FIRST SECOND THIRD FOURTH
--------- --------- --------- ---------
(IN MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1997
- ----------------------------------
Net sales............................................... $357.1 $395.8 $459.0 $445.6
Gross earnings.......................................... 89.2 96.2 122.1 112.3
Operating earnings...................................... 38.5 43.1 69.2 64.1
Income from continuing operations....................... 9.0 10.7 26.5 23.1
Income from discontinued operations..................... 1.1 1.1 0.4 --
Gain on sale of discontinued operations................. -- -- 6.1 --
------ ------ ------ ------
Net income.............................................. 10.1 11.8 33.0 23.1
Basic net income per common share (1):
Continuing operations................................. .14 .18 .43 .39
Discontinued operations............................... .02 .01 .01 --
Gain on sale of discontinued operations............... -- -- .10 --
------ ------ ------ ------
Net income per common share........................... .16 .19 .54 .39
Diluted net income per common share (1):
Continuing operations................................. .14 .17 .42 .38
Discontinued operations............................... .02 .01 .01 --
Gain on sale of discontinued operations............... -- -- .10 --
------ ------ ------ ------
Net income per common share........................... .16 .18 .53 .38
YEAR ENDED DECEMBER 31, 1996
- ----------------------------------
Net sales............................................... $327.5 $362.5 $412.7 $399.1
Gross earnings.......................................... 82.8 85.4 106.5 97.7
Operating earnings...................................... 37.6 39.0 59.3 52.6
Income from continuing operations....................... 8.3 9.1 22.2 18.4
Income (loss) from discontinued operations.............. (0.3) (0.4) (0.5) 0.9
------ ------ ------ ------
Net income.............................................. 8.0 8.7 21.7 19.3
Basic net income (loss) per common share (1):
Continuing operations................................. .13 .14 .36 .29
Discontinued operations............................... (.01) -- (.01) .02
------ ------ ------ ------
Net income per common share........................... .12 .14 .35 .31
Diluted net income (loss) per common share (1):
Continuing operations................................. .13 .14 .35 .29
Discontinued operations............................... (.01) -- (.01) .02
------ ------ ------ ------
Net income per common share........................... .12 .14 .34 .31
</TABLE>
- ---------------
(1) Net income (loss) per common share calculations for each of the quarters is
based on the average common shares outstanding for each period.
F-28
<PAGE> 103
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR BY THE INITIAL PURCHASERS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION TO BUY, THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE HEREUNDER SHALL, IN ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS
PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Cautionary Notice Regarding Forward-
Looking Statements................... iii
Available Information.................. iii
Incorporation of Certain Documents by
Reference............................ iv
Summary................................ 1
Risk Factors........................... 12
The Financing Transactions; Use of
Proceeds............................. 18
Capitalization......................... 19
Pro Forma Unaudited Financial Data..... 20
Selected Historical Consolidated
Financial Data....................... 25
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 27
Business............................... 32
Description of Certain Other
Indebtedness......................... 35
Description of the Securities.......... 37
Exchange Offer......................... 55
Plan of Distribution................... 63
Certain U.S. Federal Income Tax
Considerations....................... 64
Legal Matters.......................... 68
Experts................................ 68
Index to Financial Statements.......... F-1
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$1,000,000,000
WESTPOINT STEVENS INC.
7 7/8% SENIOR NOTES DUE 2005
AND
7 7/8% SENIOR NOTES DUE 2008
-----------------------
PROSPECTUS
-----------------------
, 1998
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 104
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(1) Section 145 of Delaware General Corporation Law. Section 145 of the
Delaware General Corporation Law ("DGCL") provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent shall not, in and of itself, create a
presumption that his conduct was unlawful.
Section 145 of the DGCL also provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon adjudication
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery of Delaware or such other court shall deem
proper.
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.
Any such indemnification (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct set
forth above. Such determination shall be made:
(i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding; or
(ii) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel
in a written opinion; or
(iii) by the stockholders.
Section 145 of the DGCL permits a Delaware business corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and
II-1
<PAGE> 105
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify such person.
(2) By-law Provisions on Indemnity. Article V of the Amended and Restated
By-laws of the Company, as the same may be amended from time to time (the
"By-laws"), sets forth the extent to which the Company's directors and officers
may be indemnified by the Company against liabilities which they may incur while
serving in such capacity. Article V generally provides that the Company shall
indemnify the directors and officers of the Company who are or were a party to
any threatened, pending, or contemplated action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was a director or officer of the Company or of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of any action alleged to have been taken or omitted in such capacity,
against expenses (including attorneys' fees and disbursements), judgments,
fines, and amounts paid in settlement actually and reasonably incurred in
connection therewith, provided that the applicable standard of conduct set forth
in Section 145 of DGCL was met and, provided further that such indemnification
shall be limited to expenses (including attorneys' fees and disbursements)
actually and reasonably incurred in the case of an action or suit by or in the
right of the Company to procure a judgment in its favor. Subject to the
procedures for indemnification of directors and officers set forth in the
By-laws, the indemnification of the Company's directors and officers provided
for therein is in all other respects substantially similar to that provided for
in Section 145 of the DGCL. Any such indemnification shall continue as to a
person who has ceased to be a director or officer of the Company and shall inure
to the benefit of the heirs, executors, and administrators of such person.
(3) Indemnification Agreements. In addition, each of the directors and the
executive officers of the Company is entitled to indemnification from the
Company pursuant to separate agreements (the "Indemnification Agreements")
between the Company and such persons.
The Company has in effect insurance policies covering all of the Company's
directors and officers in certain instances where by law they may not be
indemnified by the Company.
The above discussion of the By-laws of the Company and of the
Indemnification Agreements and of Section 145 of the Delaware Code is not
intended to be exhaustive and is qualified in its entirety by such By-laws,
Indemnification Agreements and the Delaware Code.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company as
disclosed above, the Company has been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
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3(a) -- Restated Articles of Incorporation of the Company.
(b) -- Amended and Restated By-laws of WestPoint Stevens Inc., as
currently in effect, incorporated by reference to the
Post-Effective Amendment No. 1 to Registration Statement on
Form S-1 (Commission File No. 33-77726) filed by the Company
with the Securities and Exchange Commission on May 19, 1994.
4(a) -- Indenture for the 7 7/8% Senior Notes due 2005 dated as of
June 9, 1998, between the Company and The Bank of New York,
as trustee.
(b) -- Form of Old 7 7/8% Senior Notes due 2005 (included in
Exhibit 4(a)).
(c) -- Form of Exchange 7 7/8% Senior Notes due 2005 (included in
Exhibit 4(a)).
(d) -- Registration Rights Agreement dated as of June 9, 1998 among
the Company and the Initial Purchasers with respect to the
Senior Notes due 2005.
(e) -- Indenture for the 7 7/8 Senior Notes due 2008 and 7 7/8
Senior Notes due 2008, dated as of June 9, 1998, between the
Company and The Bank of New York, as Trustee.
(f) -- Form of Old 7 7/8% Senior Notes due 2008 (included in
Exhibit 4(e)).
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(g) -- Form of Exchange 7 7/8% Senior Notes due 2008 (included in
Exhibit 4(e)).
(h) -- Registration Rights Agreement dated as of June 9, 1998 among
the Company and the Initial Purchasers with respect to the
Senior Notes due 2008.
5 -- Opinion of Weil, Gotshal & Manges LLP, as to the validity of
the Exchange Notes to be issued by the Company.**
10.1 -- Indenture, dated as of December 10, 1993, between the
Company and First Trust National Association, as trustee,
for the 8 3/4% Senior Notes due 2001, incorporated by
reference to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 (Commission File No. 0-21496)
filed by the Company with the Commission.
10.2 -- Form of 8 3/4% Senior Notes due 2001 (included in the
Indenture filed as Exhibit 10.1), incorporated by reference
to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 (Commission File No. 0-21496) filed by the
Company with the Commission.
10.3 -- Indenture, dated as of December 10, 1993, between the
Company and The Bank of New York, as trustee, for the 9 3/8%
Subordinated Debentures due 2005, incorporated by reference
to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 (Commission File No. 0-21496) filed by the
Company with the Commission.
10.4 -- Form of 9 3/8% Subordinated Debentures due 2005 (included in
the Indenture filed as Exhibit 10.3), incorporated by
reference to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 (Commission File No. 0-21496)
filed by the Company with the Commission.
10.5 -- Rights Agreement, dated as of September 16, 1992, between
the Company, The Bank of New York, as rights agent, as
amended by Amendment No. 1 to Rights Agreement, dated as of
March 12, 1993, and Amendment No. 2 to Rights Agreement,
dated as of December 10, 1993, incorporated by reference to
the Registration Statement on Form 10/A (Commission File No.
0-21496) filed by the Company on January 6, 1994.
10.6 -- Form of Restated Plan Registration Rights Agreement dated as
of May 7, 1993, among the Company and the Existing Holders
(as defined therein), incorporated by reference to the
Registration Statement on Form 10 (Commission File No.
0-21496) filed by the Company on July 1, 1993.
10.7 -- Form of Registration Rights Agreement, dated as of May 7,
1993, among the Company and the Purchaser (as defined
therein) incorporated by reference to Exhibit 1 to the Form
of Securities Purchase Agreement filed as Exhibit 10.13 to
the Registration Statement on Form 10 (Commission File No.
0-21496) filed by the Company with the Commission on July 1,
1993.
10.8 -- Amended and Restated Credit Agreement, dated as of May 7,
1993, by and among West Point-Pepperell, Inc., the banks
listed on the signature pages thereof, Bankers Trust
Company, as administrative agent, and The Chase Manhattan
Bank, N.A., Citicorp USA, Inc., NationsBank of North
Carolina, Inc., The Bank of New York and The Bank of Nova
Scotia, as co-agents, incorporated by reference to the
Registration Statement on Form 10 (Commission File No.
0-21496) filed by Valley Fashions Corp. with the Commission
on July 1, 1993.
10.9 -- Employment Agreement, dated as of March 8, 1993, between
West Point-Pepperell, Inc. and Holcombe T. Green, Jr.,
together with Letter, dated as of March 8, 1993, from the
Company to Holcombe T. Green, Jr., incorporated by reference
to the Registration Statement on Form 10 (Commission File
No. 0-21496) filed by Valley Fashions Corp. (since renamed
WestPoint Stevens Inc.) with the Commission on July 1, 1993.
10.10 -- Employment Agreement, dated as of April 1, 1993, between
West Point-Pepperell, Inc. and Morgan M. Schuessler,
together with Letter, dated as of April 1, 1993, from the
Company to Morgan M. Schuessler, incorporated by reference
to the Registration Statement on Form 10 (Commission File
No. 0-21496) filed by Valley Fashions Corp. (since renamed
WestPoint Stevens Inc.) with the Commission on July 1, 1993.
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10.11 -- Employment Agreement, dated as of February 1, 1993, between
West Point-Pepperell, Inc. and Joseph L. Jennings, Jr.,
incorporated by reference to the Registration Statement on
Form 10 (Commission File No. 0-21496) filed by the Company
with the Commission on July 1, 1993.
10.12 -- Employment Agreement, dated as of March 8, 1993, between
West Point-Pepperell, Inc. and Thomas J. Ward, incorporated
by reference to the Registration Statement on Form 10
(Commission File No. 0-21496) filed by the Company with the
Commission on July 1, 1993.
10.13 -- Form of directors and officers Indemnification Agreement
with West Point-Pepperell, Inc., incorporated by reference
to the Registration Statement on Form S-1 (Commission File
No. 33-69858) filed by the Company with the Commission on
October 1, 1993.
10.14 -- 1993 Management Stock Option Plan, incorporated by reference
to the Registration Statement on Form 10 (Commission File
No. 0-21496) filed by the Company with the Commission on
July 1, 1993.
10.15 -- Description of 1993 Senior Management Incentive Plan,
incorporated by reference to the Company's 1994 Proxy
Statement (Commission File No. 0-21496) filed by the Company
with the Commission.
10.16 -- West Point-Pepperell, Inc. Supplemental Retirement Plan for
Eligible Executives, as amended, incorporated by reference
to the Schedule 14D-9 dated November 3, 1988 (Commission
File No. 1-4490) filed by West Point-Pepperell, Inc. with
the Commission.
10.17 -- West Point-Pepperell, Inc. Supplemental Executive Retirement
Plan, as amended, incorporated by reference to the Schedule
14D-9 dated November 3, 1988 (Commission File No. 1-4490)
filed by West Point-Pepperell, Inc. with the Commission.
10.18 -- Indenture, dated as of March 1, 1987, between J.P. Stevens &
Co., Inc. and The Bank of New York, as trustee, for the 9%
Sinking Fund Debentures due 2017 including the First and
Second Supplemental Indentures thereto, incorporated be
reference to the Registration Statement on Form S-1
(Commission File No. 33-69858) filed by the Company with the
Commission on October 1, 1993.
10.19 -- Credit Agreement, dated as of December 1, 1993, among Valley
Fashions Corp., Bankers Trust Company as Administrative
Agent, the Co-Agents parties thereto and the other financial
institutions parties thereto as amended on December 10,
1993, incorporated by reference to the Annual Report on Form
10-K for the fiscal year ended December 31, 1993 (Commission
File No. 0-21496) filed by the Company with the Commission.
10.20 -- Revolving Certificate Purchase Agreement, dated as of
December 1, 1993, among WPS Receivables Corporation, the
Company, the Co-Agents and Revolving Purchasers named
therein, Bankers Trust Company, as Administrative Agent, and
NationsBank of North Carolina, N.A., as Agent, incorporated
by reference to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 (Commission File No.
0-21496) filed by the Company with the Commission.
10.21 -- Amendment No. 1 to the Revolving Certificate Purchase
Agreement, dated as of December 10, 1993, among WPS
Receivables Corporation, the Company, the Co-Agents and
Revolving Purchasers named therein, Bankers Trust Company,
as Administrative Agent, and NationsBank of North Carolina,
N.A., as Agent, incorporated by reference to the Annual
Report on Form 10-K for the fiscal year ended December 31,
1993 (Commission File No. 0-21496) filed by the Company with
the Commission.
10.22 -- Pooling and Servicing Agreement, dated as of December 10,
1993, among WPS Receivables Corporation, as Transferor, the
Company, as the initial Servicer, and Chemical Bank, as
Trustee, incorporated by reference to the Current Report on
Form 8-K (Commission File No. 0-21496) filed by the Company
with the Commission on December 10, 1993.
10.23 -- Receivables Purchase Agreement, dated as of December 10,
1993, among WPS Receivables Corporation, as Purchaser, and
the Company and Alamac Knit Fabrics, Inc., as Sellers,
incorporated by reference to the Current Report on Form 8-K
(Commission File No. 0-21496) filed by the Company with the
Commission on December 10, 1993.
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10.24 -- Form of Securities Purchase Agreement, dated as of March 12,
1993, among the Company, New Street Capital Corporation,
Magten Asset Management Corporation and each Other Holder
(as defined therein), incorporated by reference to the
Registration Statement on Form 10 (Commission File No.
0-21496) filed by the Company with the Commission on July 1,
1993.
10.25 -- Amended and Restated Credit Agreement dated November 23,
1994, among the Company, NationsBank of North Carolina, N.A.
as Administrative Agent, the Co-Agents parties thereto and
the other financial institutions parties thereto,
incorporated by reference to the Annual Report on Form
10-K/A for the fiscal year ended December 31, 1994
(Commission File No. 0-21496) filed by the Company with the
Commission.
10.26 -- WestPoint Stevens Inc. 1994 Non-Employee Directors Stock
Option Plan, incorporated by reference to the Annual Report
on Form 10-K/A for the fiscal year ended December 31, 1994
(Commission File No. 0-21496) filed by the Company with the
Commission.
10.27 -- Amended and Restated Pooling and Servicing Agreement, dated
as of May 27, 1994, among WPS Receivables Corporation, the
Company and Chemical Bank, incorporated by reference to the
Registration Statement on Form S-1, Amendment No. 2
(Commission File No. 33-76956) filed by WPS Receivables
Corporation with the Commission on May 24, 1994.
10.28 -- Revolving Certificate Purchase Agreement, dated as of May
27, 1994, among WPS Receivables Corporation, the Company,
the Co-Agents and Revolving Purchasers named therein,
Bankers Trust Company, as Administrative Agent, and
NationsBank of North Carolina, N.A., as Agent, incorporated
by reference to the Registration Statement on Form S-1,
Amendment No. 3 (Commission File No. 33-76956) filed by WPS
Receivables Corporation with the Commission on May 16, 1994.
10.29 -- Amended and Restated Receivables Purchase Agreement, dated
as of May 27, 1994, among WPS Receivables Corporation, as
Purchaser, and the Company and Alamac Knit Fabrics, Inc., as
Sellers, incorporated by reference to the Registration
Statement on Form S-1, Amendment No. 3 (Commission File No.
33-76956) filed by WPS Receivables Corporation with the
Commission on May 16, 1994.
10.30 -- Series 1994-1 Supplement, dated as of May 27, 1994, to the
Amended and Restated Pooling and Servicing Agreement, among
WPS Receivables Corporation, the Company and Chemical Bank,
incorporated by reference to the Registration Statement on
Form S-1, Amendment No. 3 (Commission File 33-76956) filed
by WPS Receivables Corporation with the Commission on May
16, 1994.
10.31 -- Series 1994-R Supplement, dated as of May 27, 1994, to the
Amended and Restated Pooling and Servicing Agreement, among
WPS Receivables Corporation, the Company and Chemical Bank,
incorporated by reference to the Registration Statement on
Form S-1, Amendment No. 3 (Commission File No. 33-76956)
filed by WPS Receivables Corporation with the Commission on
May 16, 1994.
10.32 -- WestPoint Stevens Inc. Amended and Restated 1994
Non-Employee Directors Stock Option Plan, incorporated by
reference to the Form 10-Q for the quarterly period ended
June 30, 1995 (Commission File No. 0-21496) filed by the
Company with the Commission on August 9, 1995.
10.33 -- Description of Senior Management Incentive Plan,
incorporated by reference to the Company's 1995 Proxy
Statement (Commission File No. 0-21496) filed by the Company
with the Commission on April 7, 1995.
10.34 -- WestPoint Stevens Inc. 1995 Key Employee Stock Bonus Plan,
incorporated by reference to the Registration Statement Form
S-8 (Registration No. 33-95580) filed by the Company on
August 11, 1995.
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10.35 -- Credit Agreement dated December 4, 1995, among Alamac Knit
Fabrics, Inc., as Borrower, Alamac Enterprises Inc. and AIH
Inc., as Guarantors, the Lenders identified therein and
NationsBank, N.A., as agent, incorporated by reference to
the Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (Commission File No. 0-21496) filed by the
Company with the Commission.
10.36 -- Amendment Agreement dated December 4, 1995 among the
Company, NationsBank, N.A., The Bank of New York, The First
National Bank of Boston, The First National Bank of Chicago,
The Nippon Credit Bank, Ltd., Wachovia Bank of Georgia,
N.A., Trust Company Bank, AmSouth Bank of Alabama and ABN
AMRO Bank, N.V., incorporated by reference to the Annual
Report on Form 10-K for the fiscal year ended December 31,
1995 (Commission File No. 0-21496) filed by the Company with
the Commission.
10.37 -- Form of directors and officers Indemnification Agreement
with the Company, incorporated by reference to the Annual
Report on Form 10-K for the fiscal year ended December 31,
1995 (Commission File No. 0-21496) filed by the Company with
the Commission.
10.38 -- WestPoint Stevens Inc. 1995 Key Employee Stock Bonus Plan
(As Amended), incorporated by reference to the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995
(Commission File No. 0-21496) filed by the Company with the
Commission.
10.39 -- Tax Settlement Form 870-AD between WestPoint Stevens Inc.
(successor-in-interest to Cluett, Peabody and Co., Inc.) and
the Internal Revenue Service dated December 11, 1995,
incorporated by reference to the Annual Report on Form 10-K
for the fiscal year ended December 31, 1995 (Commission File
No. 0-21496) filed by the Company with the Commission.
10.40 -- Tax Settlement Form 870-AD between WestPoint Stevens Inc.
(successor-in-interest to West Point-Pepperell, Inc.) and
the Internal Revenue Service dated August 29, 1995,
incorporated by reference to the Annual Report on Form 10-K
for the fiscal year ended December 31, 1995 (Commission File
No. 0-21496) filed by the Company with the Commission.
10.41 -- Tax Settlement Form 870-AD between J.P. Stevens & Co., Inc.
and the Internal Revenue Service dated August 29, 1995,
incorporated by reference to the Annual Report on Form 10-K
for the fiscal year ended December 31, 1995 (Commission File
No. 0-21496) filed by the Company with the Commission.
10.42 -- Second Amendment and Waiver Agreement dated as of January
23, 1997, among the Company, NationsBank, N.A. (formerly
known as NationsBank of North Carolina, N.A.), the Bank of
New York, The First National Bank of Boston, The First
National Bank of Chicago, The Nippon Credit Bank, Ltd.,
Wachovia Bank of Georgia, N.A., SunTrust Bank, Atlanta
(formerly known as Trust Company Bank), AmSouth Bank of
Alabama, and ABN AMRO Bank, N.V., incorporated by reference
to the Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1996 (Commission File No. 0-21496) filed
by the Company with the Commission.
10.43 -- Credit Agreement dated as of January 23, 1997, among
WestPoint Stevens (UK) Limited, P.J. Flower & Co. Limited,
as the Borrowers, the Company as Guarantor, the several
lenders identified on the signature pages thereto and such
other lenders as may from time to time become a party
thereto and NationsBank, N.A., as agent for the Lenders,
incorporated by reference to the Annual Report on Form
10-K/A for the fiscal year ended December 31, 1996
(Commission File No. 0-21496) filed by the Company with the
Commission.
10.44 -- First Amendment to the WestPoint Stevens Inc. Supplemental
Retirement Plan dated as of September 6, 1996, incorporated
by reference to the Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1996 (Commission File No.
0-21496) filed by the Company with the Commission.
10.45 -- Employment Agreement effective January 1, 1997 between the
Company and Joseph L. Jennings superseding the Employment
Agreement of February 1, 1993, incorporated by reference to
the Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1996 (Commission File No. 0-21496) filed by the
Company with the Commission.
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10.46 -- WestPoint Stevens Inc. Omnibus Stock Incentive Plan,
incorporated by reference to the Company's 1997 Proxy
Statement for the fiscal year ended December 31, 1996
(Commission File No. 0-21496) filed by the Company with the
Commission.
10.47 -- Second Amendment Agreement, dated as of May 22, 1997, by and
among Alamac Knit Fabrics, Inc., as Borrower, Alamac
Enterprises Inc. and AIH Inc., as Guarantors, the Lenders
identified therein and NationsBank, N.A., as Agent,
incorporated by reference to the Form 10-Q for the quarterly
period ended June 30, 1997 (Commission File No. 0-21496)
filed by the Company with the Commission.
10.48 -- Third Amendment Agreement, dated as of May 22, 1997, among
the Company, as Borrower, NationsBank, N.A. (formerly known
as NationsBank of North Carolina, N.A.), The Bank of New
York, The First National Bank of Boston, The First National
Bank of Chicago, Scotiabank Inc., Wachovia Bank of Georgia,
N.A., SunTrust Bank, Atlanta, AmSouth Bank of Alabama, and
ABN AMRO Bank, N.V., incorporated by reference to the Form
10-Q for the quarterly period ended June 30, 1997
(Commission File No. 0-21496) filed by the Company with the
Commission.
10.49 -- Stock Purchase Agreement by and among Dyersburg Corporation,
as Purchaser, Alamac Sub Holdings Inc., as Seller, AIH Inc.
and Company dated as of July 15, 1997, incorporated by
reference to the Current Report on Form 8-K (Commission File
No. 0-21496) filed by the Company with the Commission on
September 11, 1997.
10.50 -- Supplemental Agreement relating to Phase II Environmental
Investigation among Alamac Sub Holdings Inc., AIH Inc.,
Company and Dyersburg Corporation dated as of July 15, 1997,
incorporated by reference to the Current Report on Form 8-K
(Commission File No. 0-21496) filed by the Company with the
Commission on September 11, 1997.
10.51 -- Amendment to Stock Purchase Agreement among Alamac Sub
Holdings Inc., AIH Inc., Company and Dyersburg Corporation
dated as of August 15, 1997, incorporated by reference to
the Current Report on Form 8-K (Commission File No. 0-21496)
filed by the Company with the Commission on September 11,
1997.
10.52 -- Supplemental Environmental Indemnity among Alamac Sub
Holdings, Inc., AIH Inc., Company and Dyersburg Corporation
dated as of August 20, 1997, incorporated by reference to
the Current Report on Form 8-K (Commission File No. 0-21496)
filed by the Company with the Commission on September 11,
1997.
10.53 -- Second Supplemental Environmental Indemnity among Alamac Sub
Holdings Inc., AIH Inc., Company and Dyersburg Corporation
dated as of August 27, 1997, incorporated by reference to
the Current Report on Form 8-K (Commission File No. 0-21496)
filed by the Company with the Commission on September 11,
1997.
10.54 -- Assignment and Assumption Agreement among Company (the
"Assignor"), Alamac Knit Fabrics, Inc. (the "Assignee") and
Dyersburg Corporation dated as of August 27, 1997,
incorporated by reference to the Current Report on Form 8-K
(Commission File No. 0-21496) filed by the Company with the
Commission on September 11, 1997.
10.55 -- Letter of Amendment Agreement, dated as of July 18, 1997, by
and among Alamac Knit Fabrics, Inc., as Borrower, Alamac
Enterprises Inc. and AIH Inc., as Guarantors, the Lenders
identified therein and NationsBank, N.A., as Agent,
incorporated by reference to the Form 10-Q for the quarterly
period ended September 30, 1997 (Commission File No.
0-21496) filed by the Company with the Commission.
10.56 -- Letter Amendment Agreement, dated as of July 22, 1997, among
the Company, as Borrower, NationsBank, N.A. (formerly known
as NationsBank of North Carolina, N.A.), The Bank of New
York, BankBoston, N.A. (formerly known as The First National
Bank of Boston), The First National Bank of Chicago,
Scotiabank Inc., Wachovia Bank of Georgia, N.A., SunTrust
Bank, Atlanta, AmSouth Bank of Alabama and ABN AMRO Bank,
N.A., incorporated by reference to the Form 10-Q for the
quarterly period ended September 30, 1997 (Commission File
No. 0-21496) filed by the Company with the Commission.
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10.57 -- Letter Amendment Agreement, dated as of August 5, 1997,
among the Company, as Borrower, NationsBank, N.A. (formerly
known as NationsBank of North Carolina, N.A.), The Bank of
New York, BankBoston, N.A. (formerly known as The First
National Bank of Boston), The First National Bank of
Chicago, Scotiabank Inc., Wachovia Bank of Georgia, N.A.,
SunTrust Bank, Atlanta, AmSouth Bank of Alabama, and ABN
AMRO Bank, N.V., incorporated by reference to the Form 10-Q
for the quarterly period ended September 30, 1997
(Commission File No. 0-21496) filed by the Company with the
Commission.
10.58 -- Termination of Commitments and Release of Liens dated August
27, 1997, by and among Alamac Knit Fabrics, Inc., as
Borrower, Alamac Enterprises Inc. and AIH Inc., as
Guarantors, the Lenders identified therein and NationsBank,
N.A., as Agent, incorporated by reference to the Form 10-Q
for the quarterly period ended September 30, 1997
(Commission File No. 0-21496) filed by the Company with the
Commission.
10.59 -- Second Amended and Restated Credit Agreement, dated as of
June 9, 1998, among the Company, WestPoint Stevens (UK)
Limited, WestPoint Stevens (Europe) Limited, NationsBank,
N.A., as agent, and the other financial institutions party
thereto.
10.60 -- Letter Amendment Agreement, dated as of June 30, 1998, among
the Company, WestPoint Stevens (UK) Limited, WestPoint
Stevens (Europe) Limited, NationsBank, N.A., as agent and
the other financial institutions party thereto.
12.1 -- Statement Re: Computation of Ratios of Earnings to Fixed
Charges.
12.2 -- Statement Re: Pro Forma Computation of Ratios of Earnings to
Fixed Charges.
23(a) -- Consent of Ernst & Young LLP.
23(b) -- Consent of Weil, Gotshal & Manges LLP (included in the
opinion filed as Exhibit 5 to this Registration Statement).
24 -- Power of Attorney (included on signature pages of this Part
II).
25(a) -- Statement of Eligibility and Qualification of The Bank of
New York, as Trustee, on Form T-1 with respect to the 7 7/8%
Senior Notes due 2005.
25(b) -- Statement of Eligibility and Qualification of The Bank of
New York, as Trustee, on Form T-1 with respect to the Senior
Notes due 2008.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
99.3 -- Form of Instructions to Registered Holders and/or Book-Entry
Facility Participant from Beneficial Owner.
99.4 -- Form of Exchange Agent Agreement.
</TABLE>
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* Incorporated herein by reference.
** To be filed by amendment.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate
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<PAGE> 112
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the provisions, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a registrant
of expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-9
<PAGE> 113
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in West Point, Georgia, on this 24th day
of July, 1998.
WESTPOINT STEVENS INC.
By: /s/ HOLCOMBE T. GREEN, JR.
------------------------------------
HOLCOMBE T. GREEN, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Morgan M. Schuessler and Christopher N. Zodrow,
and each of them, with full power to act without the other, his/her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him/her and in his/her name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his/her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant named below and in the capacities indicated, on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ HOLCOMBE T. GREEN, JR. Chairman and Chief Executive July 24, 1998
- --------------------------------------------- Officer and Director (Principal
HOLCOMBE T. GREEN, JR. Executive Officer)
/s/ MORGAN M. SCHUESSLER Executive Vice President/Finance July 24, 1998
- --------------------------------------------- and Chief Financial Officer
MORGAN M. SCHUESSLER (Principal Financial Officer)
/s/ J. NELSON GRIFFITH Controller (Principal Accounting July 24, 1998
- --------------------------------------------- Officer)
J. NELSON GRIFFITH
/s/ JOSEPH L. JENNINGS, JR. Vice Chairman of the Board July 24, 1998
- ---------------------------------------------
JOSEPH L. JENNINGS, JR.
/s/ HUGH M. CHAPMAN Director July 24, 1998
- ---------------------------------------------
HUGH M. CHAPMAN
/s/ M. KATHRINE DWYER Director July 24, 1998
- ---------------------------------------------
M. KATHERINE DWYER
</TABLE>
II-10
<PAGE> 114
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JOHN G. HUDSON Director July 24, 1998
- ---------------------------------------------
JOHN G. HUDSON
/s/ CHARLES W. MCCALL Director July 24, 1998
- ---------------------------------------------
CHARLES W. MCCALL
/s/ GERALD B. MITCHELL Director July 24, 1998
- ---------------------------------------------
GERALD B. MITCHELL
/s/ JOHN F. SORTE Director July 24, 1998
- ---------------------------------------------
JOHN F. SORTE
/s/ PHILLIP SIEGEL Director July 24, 1998
- ---------------------------------------------
PHILLIP SIEGEL
</TABLE>
II-11
<PAGE> 115
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ----------- ------------
<S> <C> <C> <C> <C>
3(a) -- Restated Articles of Incorporation of the Company...........
(b) -- Amended and Restated By-laws of WestPoint Stevens Inc., as
currently in effect, incorporated by reference to the
Post-Effective Amendment No. 1 to Registration Statement on
Form S-1 (Commission File No. 33-77726) filed by the Company
with the Securities and Exchange Commission on May 19,
1994........................................................
4(a) -- Indenture for the 7 7/8% Senior Notes due 2005 dated as of
June 9, 1998, between the Company and The Bank of New York,
as trustee..................................................
(b) -- Form of Old 7 7/8% Senior Notes due 2005 (included in
Exhibit 4(a))...............................................
(c) -- Form of Exchange 7 7/8% Senior Notes due 2005 (included in
Exhibit 4(a))...............................................
(d) -- Registration Rights Agreement dated as of June 9, 1998 among
the Company and the Initial Purchasers with respect to the
Senior Notes due 2005.......................................
(e) -- Indenture for the 7 7/8 Senior Notes due 2008 and 7 7/8
Senior Notes due 2008, dated as of June 9, 1998, between the
Company and The Bank of New York, as Trustee................
(f) -- Form of Old 7 7/8% Senior Notes due 2008 (included in
Exhibit 4(e))...............................................
(g) -- Form of Exchange 7 7/8% Senior Notes due 2008 (included in
Exhibit 4(e))...............................................
(h) -- Registration Rights Agreement dated as of June 9, 1998 among
the Company and the Initial Purchasers with respect to the
Senior Notes due 2008.......................................
5 -- Opinion of Weil, Gotshal & Manges LLP, as to the validity of
the Exchange Notes to be issued by the Company**............
10.1 -- Indenture, dated as of December 10, 1993, between the
Company and First Trust National Association, as trustee,
for the 8 3/4% Senior Notes due 2001, incorporated by
reference to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 (Commission File No. 0-21496)
filed by the Company with the Commission....................
10.2 -- Form of 8 3/4% Senior Notes due 2001 (included in the
Indenture filed as Exhibit 10.1), incorporated by reference
to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 (Commission File No. 0-21496) filed by the
Company with the Commission.................................
10.3 -- Indenture, dated as of December 10, 1993, between the
Company and The Bank of New York, as trustee, for the 9 3/8%
Subordinated Debentures due 2005, incorporated by reference
to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 (Commission File No. 0-21496) filed by the
Company with the Commission.................................
10.4 -- Form of 9 3/8% Subordinated Debentures due 2005 (included in
the Indenture filed as Exhibit 10.3), incorporated by
reference to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 (Commission File No. 0-21496)
filed by the Company with the Commission....................
10.5 -- Rights Agreement, dated as of September 16, 1992, between
the Company, The Bank of New York, as rights agent, as
amended by Amendment No. 1 to Rights Agreement, dated as of
March 12, 1993, and Amendment No. 2 to Rights Agreement,
dated as of December 10, 1993, incorporated by reference to
the Registration Statement on Form 10/A (Commission File No.
0-21496) filed by the Company on January 6, 1994............
10.6 -- Form of Restated Plan Registration Rights Agreement dated as
of May 7, 1993, among the Company and the Existing Holders
(as defined therein), incorporated by reference to the
Registration Statement on Form 10 (Commission File No.
0-21496) filed by the Company on July 1, 1993...............
</TABLE>
<PAGE> 116
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ----------- ------------
<S> <C> <C> <C> <C>
10.7 -- Form of Registration Rights Agreement, dated as of May 7,
1993, among the Company and the Purchaser (as defined
therein) incorporated by reference to Exhibit 1 to the Form
of Securities Purchase Agreement filed as Exhibit 10.13 to
the Registration Statement on Form 10 (Commission File No.
0-21496) filed by the Company with the Commission on July 1,
1993........................................................
10.8 -- Amended and Restated Credit Agreement, dated as of May 7,
1993, by and among West Point-Pepperell, Inc., the banks
listed on the signature pages thereof, Bankers Trust
Company, as administrative agent, and The Chase Manhattan
Bank, N.A., Citicorp USA, Inc., NationsBank of North
Carolina, Inc., The Bank of New York and The Bank of Nova
Scotia, as co-agents, incorporated by reference to the
Registration Statement on Form 10 (Commission File No.
0-21496) filed by Valley Fashions Corp. with the Commission
on July 1, 1993.............................................
10.9 -- Employment Agreement, dated as of March 8, 1993, between
West Point-Pepperell, Inc. and Holcombe T. Green, Jr.,
together with Letter, dated as of March 8, 1993, from the
Company to Holcombe T. Green, Jr., incorporated by reference
to the Registration Statement on Form 10 (Commission File
No. 0-21496) filed by Valley Fashions Corp. (since renamed
WestPoint Stevens Inc.) with the Commission on July 1,
1993........................................................
10.10 -- Employment Agreement, dated as of April 1, 1993, between
West Point-Pepperell, Inc. and Morgan M. Schuessler,
together with Letter, dated as of April 1, 1993, from the
Company to Morgan M. Schuessler, incorporated by reference
to the Registration Statement on Form 10 (Commission File
No. 0-21496) filed by Valley Fashions Corp. (since renamed
WestPoint Stevens Inc.) with the Commission on July 1,
1993........................................................
10.11 -- Employment Agreement, dated as of February 1, 1993, between
West Point-Pepperell, Inc. and Joseph L. Jennings, Jr.,
incorporated by reference to the Registration Statement on
Form 10 (Commission File No. 0-21496) filed by the Company
with the Commission on July 1, 1993.........................
10.12 -- Employment Agreement, dated as of March 8, 1993, between
West Point-Pepperell, Inc. and Thomas J. Ward, incorporated
by reference to the Registration Statement on Form 10
(Commission File No. 0-21496) filed by the Company with the
Commission on July 1, 1993..................................
10.13 -- Form of directors and officers Indemnification Agreement
with West Point-Pepperell, Inc., incorporated by reference
to the Registration Statement on Form S-1 (Commission File
No. 33-69858) filed by the Company with the Commission on
October 1, 1993.............................................
10.14 -- 1993 Management Stock Option Plan, incorporated by reference
to the Registration Statement on Form 10 (Commission File
No. 0-21496) filed by the Company with the Commission on
July 1, 1993................................................
10.15 -- Description of 1993 Senior Management Incentive Plan,
incorporated by reference to the Company's 1994 Proxy
Statement (Commission File No. 0-21496) filed by the Company
with the Commission.........................................
10.16 -- West Point-Pepperell, Inc. Supplemental Retirement Plan for
Eligible Executives, as amended, incorporated by reference
to the Schedule 14D-9 dated November 3, 1988 (Commission
File No. 1-4490) filed by West Point-Pepperell, Inc. with
the Commission..............................................
</TABLE>
<PAGE> 117
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ----------- ------------
<S> <C> <C> <C> <C>
10.17 -- West Point-Pepperell, Inc. Supplemental Executive Retirement
Plan, as amended, incorporated by reference to the Schedule
14D-9 dated November 3, 1988 (Commission File No. 1-4490)
filed by West Point-Pepperell, Inc. with the Commission.....
10.18 -- Indenture, dated as of March 1, 1987, between J.P. Stevens &
Co., Inc. and The Bank of New York, as trustee, for the 9%
Sinking Fund Debentures due 2017 including the First and
Second Supplemental Indentures thereto, incorporated be
reference to the Registration Statement on Form S-1
(Commission File No. 33-69858) filed by the Company with the
Commission on October 1, 1993...............................
10.19 -- Credit Agreement, dated as of December 1, 1993, among Valley
Fashions Corp., Bankers Trust Company as Administrative
Agent, the Co-Agents parties thereto and the other financial
institutions parties thereto as amended on December 10,
1993, incorporated by reference to the Annual Report on Form
10-K for the fiscal year ended December 31, 1993 (Commission
File No. 0-21496) filed by the Company with the
Commission..................................................
10.20 -- Revolving Certificate Purchase Agreement, dated as of
December 1, 1993, among WPS Receivables Corporation, the
Company, the Co-Agents and Revolving Purchasers named
therein, Bankers Trust Company, as Administrative Agent, and
NationsBank of North Carolina, N.A., as Agent, incorporated
by reference to the Annual Report on Form 10-K for the
fiscal year ended December 31, 1993 (Commission File No.
0-21496) filed by the Company with the Commission...........
10.21 -- Amendment No. 1 to the Revolving Certificate Purchase
Agreement, dated as of December 10, 1993, among WPS
Receivables Corporation, the Company, the Co-Agents and
Revolving Purchasers named therein, Bankers Trust Company,
as Administrative Agent, and NationsBank of North Carolina,
N.A., as Agent, incorporated by reference to the Annual
Report on Form 10-K for the fiscal year ended December 31,
1993 (Commission File No. 0-21496) filed by the Company with
the Commission..............................................
10.22 -- Pooling and Servicing Agreement, dated as of December 10,
1993, among WPS Receivables Corporation, as Transferor, the
Company, as the initial Servicer, and Chemical Bank, as
Trustee, incorporated by reference to the Current Report on
Form 8-K (Commission File No. 0-21496) filed by the Company
with the Commission on December 10, 1993....................
10.23 -- Receivables Purchase Agreement, dated as of December 10,
1993, among WPS Receivables Corporation, as Purchaser, and
the Company and Alamac Knit Fabrics, Inc., as Sellers,
incorporated by reference to the Current Report on Form 8-K
(Commission File No. 0-21496) filed by the Company with the
Commission on December 10, 1993.............................
10.24 -- Form of Securities Purchase Agreement, dated as of March 12,
1993, among the Company, New Street Capital Corporation,
Magten Asset Management Corporation and each Other Holder
(as defined therein), incorporated by reference to the
Registration Statement on Form 10 (Commission File No.
0-21496) filed by the Company with the Commission on July 1,
1993........................................................
10.25 -- Amended and Restated Credit Agreement dated November 23,
1994, among the Company, NationsBank of North Carolina, N.A.
as Administrative Agent, the Co-Agents parties thereto and
the other financial institutions parties thereto,
incorporated by reference to the Annual Report on Form
10-K/A for the fiscal year ended December 31, 1994
(Commission File No. 0-21496) filed by the Company with the
Commission..................................................
</TABLE>
<PAGE> 118
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ----------- ------------
<S> <C> <C> <C> <C>
10.26 -- WestPoint Stevens Inc. 1994 Non-Employee Directors Stock
Option Plan, incorporated by reference to the Annual Report
on Form 10-K/A for the fiscal year ended December 31, 1994
(Commission File No. 0-21496) filed by the Company with the
Commission..................................................
10.27 -- Amended and Restated Pooling and Servicing Agreement, dated
as of May 27, 1994, among WPS Receivables Corporation, the
Company and Chemical Bank, incorporated by reference to the
Registration Statement on Form S-1, Amendment No. 2
(Commission File No. 33-76956) filed by WPS Receivables
Corporation with the Commission on May 24, 1994.............
10.28 -- Revolving Certificate Purchase Agreement, dated as of May
27, 1994, among WPS Receivables Corporation, the Company,
the Co-Agents and Revolving Purchasers named therein,
Bankers Trust Company, as Administrative Agent, and
NationsBank of North Carolina, N.A., as Agent, incorporated
by reference to the Registration Statement on Form S-1,
Amendment No. 3 (Commission File No. 33-76956) filed by WPS
Receivables Corporation with the Commission on May 16,
1994........................................................
10.29 -- Amended and Restated Receivables Purchase Agreement, dated
as of May 27, 1994, among WPS Receivables Corporation, as
Purchaser, and the Company and Alamac Knit Fabrics, Inc., as
Sellers, incorporated by reference to the Registration
Statement on Form S-1, Amendment No. 3 (Commission File No.
33-76956) filed by WPS Receivables Corporation with the
Commission on May 16, 1994..................................
10.30 -- Series 1994-1 Supplement, dated as of May 27, 1994, to the
Amended and Restated Pooling and Servicing Agreement, among
WPS Receivables Corporation, the Company and Chemical Bank,
incorporated by reference to the Registration Statement on
Form S-1, Amendment No. 3 (Commission File 33-76956) filed
by WPS Receivables Corporation with the Commission on May
16, 1994....................................................
10.31 -- Series 1994-R Supplement, dated as of May 27, 1994, to the
Amended and Restated Pooling and Servicing Agreement, among
WPS Receivables Corporation, the Company and Chemical Bank,
incorporated by reference to the Registration Statement on
Form S-1, Amendment No. 3 (Commission File No. 33-76956)
filed by WPS Receivables Corporation with the Commission on
May 16, 1994................................................
10.32 -- WestPoint Stevens Inc. Amended and Restated 1994
Non-Employee Directors Stock Option Plan, incorporated by
reference to the Form 10-Q for the quarterly period ended
June 30, 1995 (Commission File No. 0-21496) filed by the
Company with the Commission on August 9, 1995...............
10.33 -- Description of Senior Management Incentive Plan,
incorporated by reference to the Company's 1995 Proxy
Statement (Commission File No. 0-21496) filed by the Company
with the Commission on April 7, 1995........................
10.34 -- WestPoint Stevens Inc. 1995 Key Employee Stock Bonus Plan,
incorporated by reference to the Registration Statement Form
S-8 (Registration No. 33-95580) filed by the Company on
August 11, 1995.............................................
10.35 -- Credit Agreement dated December 4, 1995, among Alamac Knit
Fabrics, Inc., as Borrower, Alamac Enterprises Inc. and AIH
Inc., as Guarantors, the Lenders identified therein and
NationsBank, N.A., as agent, incorporated by reference to
the Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (Commission File No. 0-21496) filed by the
Company with the Commission.................................
</TABLE>
<PAGE> 119
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ----------- ------------
<S> <C> <C> <C> <C>
10.36 -- Amendment Agreement dated December 4, 1995 among the
Company, NationsBank, N.A., The Bank of New York, The First
National Bank of Boston, The First National Bank of Chicago,
The Nippon Credit Bank, Ltd., Wachovia Bank of Georgia,
N.A., Trust Company Bank, AmSouth Bank of Alabama and ABN
AMRO Bank, N.V., incorporated by reference to the Annual
Report on Form 10-K for the fiscal year ended December 31,
1995 (Commission File No. 0-21496) filed by the Company with
the Commission..............................................
10.37 -- Form of directors and officers Indemnification Agreement
with the Company, incorporated by reference to the Annual
Report on Form 10-K for the fiscal year ended December 31,
1995 (Commission File No. 0-21496) filed by the Company with
the Commission..............................................
10.38 -- WestPoint Stevens Inc. 1995 Key Employee Stock Bonus Plan
(As Amended), incorporated by reference to the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995
(Commission File No. 0-21496) filed by the Company with the
Commission..................................................
10.39 -- Tax Settlement Form 870-AD between WestPoint Stevens Inc.
(successor-in-interest to Cluett, Peabody and Co., Inc.) and
the Internal Revenue Service dated December 11, 1995,
incorporated by reference to the Annual Report on Form 10-K
for the fiscal year ended December 31, 1995 (Commission File
No. 0-21496) filed by the Company with the Commission.......
10.40 -- Tax Settlement Form 870-AD between WestPoint Stevens Inc.
(successor-in-interest to West Point-Pepperell, Inc.) and
the Internal Revenue Service dated August 29, 1995,
incorporated by reference to the Annual Report on Form 10-K
for the fiscal year ended December 31, 1995 (Commission File
No. 0-21496) filed by the Company with the Commission.......
10.41 -- Tax Settlement Form 870-AD between J.P. Stevens & Co., Inc.
and the Internal Revenue Service dated August 29, 1995,
incorporated by reference to the Annual Report on Form 10-K
for the fiscal year ended December 31, 1995 (Commission File
No. 0-21496) filed by the Company with the Commission.......
10.42 -- Second Amendment and Waiver Agreement dated as of January
23, 1997, among the Company, NationsBank, N.A. (formerly
known as NationsBank of North Carolina, N.A.), the Bank of
New York, The First National Bank of Boston, The First
National Bank of Chicago, The Nippon Credit Bank, Ltd.,
Wachovia Bank of Georgia, N.A., SunTrust Bank, Atlanta
(formerly known as Trust Company Bank), AmSouth Bank of
Alabama, and ABN AMRO Bank, N.V., incorporated by reference
to the Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1996 (Commission File No. 0-21496) filed
by the Company with the Commission..........................
10.43 -- Credit Agreement dated as of January 23, 1997, among
WestPoint Stevens (UK) Limited, P.J. Flower & Co. Limited,
as the Borrowers, the Company as Guarantor, the several
lenders identified on the signature pages thereto and such
other lenders as may from time to time become a party
thereto and NationsBank, N.A., as agent for the Lenders,
incorporated by reference to the Annual Report on Form
10-K/A for the fiscal year ended December 31, 1996
(Commission File No. 0-21496) filed by the Company with the
Commission..................................................
10.44 -- First Amendment to the WestPoint Stevens Inc. Supplemental
Retirement Plan dated as of September 6, 1996, incorporated
by reference to the Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1996 (Commission File No.
0-21496) filed by the Company with the Commission...........
</TABLE>
<PAGE> 120
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ----------- ------------
<S> <C> <C> <C> <C>
10.45 -- Employment Agreement effective January 1, 1997 between the
Company and Joseph L. Jennings superseding the Employment
Agreement of February 1, 1993, incorporated by reference to
the Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1996 (Commission File No. 0-21496) filed by the
Company with the Commission.................................
10.46 -- WestPoint Stevens Inc. Omnibus Stock Incentive Plan,
incorporated by reference to the Company's 1997 Proxy
Statement for the fiscal year ended December 31, 1996
(Commission File No. 0-21496) filed by the Company with the
Commission..................................................
10.47 -- Second Amendment Agreement, dated as of May 22, 1997, by and
among Alamac Knit Fabrics, Inc., as Borrower, Alamac
Enterprises Inc. and AIH Inc., as Guarantors, the Lenders
identified therein and NationsBank, N.A., as Agent,
incorporated by reference to the Form 10-Q for the quarterly
period ended June 30, 1997 (Commission File No. 0-21496)
filed by the Company with the Commission....................
10.48 -- Third Amendment Agreement, dated as of May 22, 1997, among
the Company, as Borrower, NationsBank, N.A. (formerly known
as NationsBank of North Carolina, N.A.), The Bank of New
York, The First National Bank of Boston, The First National
Bank of Chicago, Scotiabank Inc., Wachovia Bank of Georgia,
N.A., SunTrust Bank, Atlanta, AmSouth Bank of Alabama, and
ABN AMRO Bank, N.V., incorporated by reference to the Form
10-Q for the quarterly period ended June 30, 1997
(Commission File No. 0-21496) filed by the Company with the
Commission..................................................
10.49 -- Stock Purchase Agreement by and among Dyersburg Corporation,
as Purchaser, Alamac Sub Holdings Inc., as Seller, AIH Inc.
and Company dated as of July 15, 1997, incorporated by
reference to the Current Report on Form 8-K (Commission File
No. 0-21496) filed by the Company with the Commission on
September 11, 1997..........................................
10.50 -- Supplemental Agreement relating to Phase II Environmental
Investigation among Alamac Sub Holdings Inc., AIH Inc.,
Company and Dyersburg Corporation dated as of July 15, 1997,
incorporated by reference to the Current Report on Form 8-K
(Commission File No. 0-21496) filed by the Company with the
Commission on September 11, 1997............................
10.51 -- Amendment to Stock Purchase Agreement among Alamac Sub
Holdings Inc., AIH Inc., Company and Dyersburg Corporation
dated as of August 15, 1997, incorporated by reference to
the Current Report on Form 8-K (Commission File No. 0-21496)
filed by the Company with the Commission on September 11,
1997........................................................
10.52 -- Supplemental Environmental Indemnity among Alamac Sub
Holdings, Inc., AIH Inc., Company and Dyersburg Corporation
dated as of August 20, 1997, incorporated by reference to
the Current Report on Form 8-K (Commission File No. 0-21496)
filed by the Company with the Commission on September 11,
1997........................................................
10.53 -- Second Supplemental Environmental Indemnity among Alamac Sub
Holdings Inc., AIH Inc., Company and Dyersburg Corporation
dated as of August 27, 1997, incorporated by reference to
the Current Report on Form 8-K (Commission File No. 0-21496)
filed by the Company with the Commission on September 11,
1997........................................................
</TABLE>
<PAGE> 121
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ----------- ------------
<S> <C> <C> <C> <C>
10.54 -- Assignment and Assumption Agreement among Company (the
"Assignor"), Alamac Knit Fabrics, Inc. (the "Assignee") and
Dyersburg Corporation dated as of August 27, 1997,
incorporated by reference to the Current Report on Form 8-K
(Commission File No. 0-21496) filed by the Company with the
Commission on September 11, 1997............................
10.55 -- Letter of Amendment Agreement, dated as of July 18, 1997, by
and among Alamac Knit Fabrics, Inc., as Borrower, Alamac
Enterprises Inc. and AIH Inc., as Guarantors, the Lenders
identified therein and NationsBank, N.A., as Agent,
incorporated by reference to the Form 10-Q for the quarterly
period ended September 30, 1997 (Commission File No.
0-21496) filed by the Company with the Commission...........
10.56 -- Letter Amendment Agreement, dated as of July 22, 1997, among
the Company, as Borrower, NationsBank, N.A. (formerly known
as NationsBank of North Carolina, N.A.), The Bank of New
York, BankBoston, N.A. (formerly known as The First National
Bank of Boston), The First National Bank of Chicago,
Scotiabank Inc., Wachovia Bank of Georgia, N.A., SunTrust
Bank, Atlanta, AmSouth Bank of Alabama and ABN AMRO Bank,
N.A., incorporated by reference to the Form 10-Q for the
quarterly period ended September 30, 1997 (Commission File
No. 0-21496) filed by the Company with the Commission.......
10.57 -- Letter Amendment Agreement, dated as of August 5,
1997, among the Company, as Borrower, NationsBank, N.A.
(formerly known as NationsBank of North Carolina, N.A.), The
Bank of New York, BankBoston, N.A. (formerly known as The
First National Bank of Boston), The First National Bank of
Chicago, Scotiabank Inc., Wachovia Bank of Georgia, N.A.,
SunTrust Bank, Atlanta, AmSouth Bank of Alabama, and ABN
AMRO Bank, N.V., incorporated by reference to the Form 10-Q
for the quarterly period ended September 30, 1997
(Commission File No. 0-21496) filed by the Company with the
Commission..................................................
10.58 -- Termination of Commitments and Release of Liens dated August
27, 1997, by and among Alamac Knit Fabrics, Inc., as
Borrower, Alamac Enterprises Inc. and AIH Inc., as
Guarantors, the Lenders identified therein and NationsBank,
N.A., as Agent, incorporated by reference to the Form 10-Q
for the quarterly period ended September 30, 1997
(Commission File No. 0-21496) filed by the Company with the
Commission..................................................
10.59 -- Second Amended and Restated Credit Agreement, dated as of June
9, 1998, among the Company, WestPoint Stevens (UK) Limited,
WestPoint Stevens (Europe) Limited, NationsBank, N.A., as
agent, and the other financial institutions party thereto...
10.60 -- Letter Amendment Agreement, dated as of June 30, 1998, among
the Company, WestPoint Stevens (UK) Limited, WestPoint
Stevens (Europe) Limited, NationsBank, N.A., as agent and
the other financial institutions party thereto..............
12.1 -- Statement Re: Computation of Ratios of Earnings to Fixed
Charges.....................................................
12.2 -- Statement Re: Pro Forma Computation of Ratios of Earnings to
Fixed Charges...............................................
23(a) -- Consent of Ernst & Young LLP................................
23(b) -- Consent of Weil, Gotshal & Manges LLP (included in the
opinion filed as Exhibit 5 to this Registration
Statement)..................................................
24 -- Power of Attorney (included on signature pages of this Part
II).........................................................
25(a) -- Statement of Eligibility and Qualification of The Bank of
New York, as Trustee, on Form T-1 with respect to the 7 7/8%
Senior Notes due 2005.......................................
</TABLE>
<PAGE> 122
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- --------- ----------- ------------
<S> <C> <C> <C> <C>
25(b) -- Statement of Eligibility and Qualification of The Bank of
New York, as Trustee, on Form T-1 with respect to the Senior
Notes due 2008..............................................
99.1 -- Form of Letter of Transmittal...............................
99.2 -- Form of Notice of Guaranteed Delivery.......................
99.3 -- Form of Instructions to Registered Holders and/or Book-Entry
Facility Participant from Beneficial Owner..................
99.4 -- Form of Exchange Agent Agreement
</TABLE>
- ---------------
* Incorporated herein by reference.
** To be filed by amendment.
<PAGE> 1
EXHIBIT 3(a)
RESTATED
CERTIFICATE OF INCORPORATION
OF
WESTPOINT STEVENS INC.
Pursuant to Sections 242 and 245 of the
General Corporation Law of Delaware
WestPoint Stevens Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "DGCL"), for the purposes
of amending and restating its Restated Certificate of Incorporation, as
currently in effect, hereby certifies that:
1. The name of the Corporation is WestPoint Stevens Inc. (the
"Corporation").
2. The Corporation was originally incorporated under the name of Acme
Boot Holding Corporation and its original Certificate of Incorporation was filed
with the Secretary of State of the State of Delaware on February 24, 1987. On
December 10, 1993, the Corporation changed its name to WestPoint Stevens Inc.
pursuant to the filing of a Certificate of Merger with the Secretary of State of
the State of Delaware merging Valley Fashions Tender Corp. with and into the
Corporation.
3. This Restated Certificate of Incorporation has been duly authorized
and adopted by the Board of Directors and stockholders of the Corporation in
accordance with Sections 242 and 245 of the DGCL.
4. This Restated Certificate of Incorporation hereby amends and
restates in its entirety the Restated Certificate of Incorporation of the
Corporation as follows:
FIRST: The name of the Corporation is WestPoint Stevens Inc.
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1013 Centre Road, City of Wilmington, County of New Castle,
State of Delaware. The name of the registered agent of the Corporation in the
State of Delaware at such address is Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in and conduct any
lawful act or activity for which corporations may be organized under the DGCL,
as from time to time amended.
FOURTH: (a) The total number of shares of capital stock that the
Corporation shall have authority to issue is 200,000,000 shares, all of which
shall be Common Stock, par value $.01.
<PAGE> 2
(b) Subject to the provisions of applicable law or of
the by-laws of the Corporation with respect to the closing of the transfer books
or the fixing of a record date for the determination of stockholders entitled to
vote, the holders of outstanding shares of Common Stock shall exclusively
possess the voting power for the election of directors and for all other
purposes, each holder of record of shares of Common Stock being entitled to one
vote for each share of Common Stock outstanding in his name on the books of the
Corporation.
FIFTH: No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing, without
a meeting, to the taking of any action is specifically denied.
SIXTH: The number of directors constituting the entire Board of
Directors of the Corporation shall be fixed at nine, unless and until otherwise
determined by a majority of the entire Board; provided that the number of
directors shall not be reduced at any time so as to shorten the term of any
director at the time in office.
SEVENTH: The members of the Board shall be divided into three classes,
designated Class I, Class II and Class III, each to consist of three directors,
with Class I directors to hold office initially for a term expiring at the
annual meeting of stockholders to be held in 1996, Class II directors to hold
office initially for a term expiring at the annual meeting of stockholders to be
held in 1997 and Class III directors to hold office initially for a term
expiring at the annual meeting of stockholders to be held in 1995. In the event
of an increase or decrease in the number of directors constituting the entire
Board, however, the number of directors constituting each class shall be as
equally proportionate as possible. Successors to the class of directors whose
term expires at each annual meeting shall be elected for a term expiring at the
third succeeding annual meeting of stockholders. In all cases, each director so
elected shall hold office until his successor is elected and qualified or until
his earlier death, resignation or removal.
EIGHTH: (a) A director may be removed from office for "cause" by the
affirmative vote of the holders of a majority of the outstanding shares entitled
to vote thereon. For purposes of this Article EIGHTH, "cause" shall mean, with
respect to any director, (i) the willful failure by such director to perform, or
the gross negligence of such director in performing, the duties of a director,
(ii) the engaging by such director in willful or serious misconduct that is
injurious to the Corporation or (iii) the conviction of such director of, or the
entering by such director of a plea of nolo contendere to, a crime that
constitutes a felony.
(b) Any director may be removed from office without
cause by the affirmative vote of the holders of at least 75% of the outstanding
shares entitled to vote thereon.
(c) Any vacancy on the Board of Directors may be
filled by the Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any director so chosen shall hold
office until the next election of the class for which such director shall have
been chosen and until his successor shall be elected and qualified.
NINTH: The amendment or repeal of Article FIFTH, Article SIXTH, Article
SEVENTH, Article EIGHTH or this Article NINTH of this Restated Certificate of
Incorporation and the adoption of any provision inconsistent therewith shall
require the affirmative vote of the holders of at least 75% of the outstanding
shares of Common Stock.
TENTH: In furtherance and not in limitation of the powers conferred by
law, subject to any limitations contained elsewhere in this Restated Certificate
of Incorporation, the by-laws of the Corporation may be adopted, amended or
repealed by a majority of the Board of Directors of the Corporation, but any
by-
<PAGE> 3
law of the Corporation adopted by the Board of Directors may be amended or
repealed by the stockholders entitled to vote thereon. Election of directors
need not be by written ballot.
ELEVENTH: (a) A director of the Corporation shall not be personally
liable either to the Corporation or to any stockholder for monetary damages for
breach of fiduciary duty as a director, except (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, or (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, or (iii) under Section 174 of the DGCL or any
successor provision thereto, or (iv) for any transaction from which the director
shall have derived an improper personal benefit. Neither amendment nor repeal of
this paragraph (a) nor the adoption of any provision of the certificate of
incorporation inconsistent with this paragraph (a) shall eliminate or reduce the
effect of this paragraph (a) in respect of any matter occurring, or any cause of
action, suit or claim that, but for this paragraph (a) of this Article ELEVENTH,
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
(b) The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to, or testifies in, any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative in nature, by reason of the fact that
such person is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise (an "Other Entity"), against expenses (including attorneys' fees and
disbursements), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding to the full extent permitted by law. Persons who are not directors or
officers of the Corporation may be similarly indemnified in respect of service
to the Corporation or to an Other Entity at the request of the Corporation to
the extent the Board at any time specifies that such persons are entitled to the
benefits of this Article ELEVENTH, and the Corporation may adopt By-laws or
enter into agreements with any such person for the purpose of providing for such
indemnification. Any director or officer of the Corporation serving in any
capacity for (a) another corporation of which a majority of the shares entitled
to vote in the election of its directors is held, directly or indirectly, by the
Corporation or (b) any employee benefit plan of the Corporation or any
corporation referred to in clause (a) shall be deemed to be doing so at the
request of the Corporation.
(c) The Corporation shall, from time to time,
reimburse or advance to any director or officer or other person entitled to
indemnification under this Article ELEVENTH the funds necessary for payment of
expenses (including attorney's fees and disbursements) actually and reasonably
incurred by such person in defending or testifying in a civil, criminal,
administrative or investigative action, suit or proceeding; provided, however,
that the Corporation may pay such expenses in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined by final judicial decision that such director or officer is not
entitled to be indemnified by the Corporation against such expenses as
authorized by this Article ELEVENTH, and the Corporation may adopt By-laws or
enter into agreements with such persons for the purpose of providing for such
advances.
(d) The Corporation shall have the power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of an Other
Entity against any liability asserted against such person and incurred by such
person in any such capacity, or arising out of such person's status as such,
whether or not the Corporation would have the power to indemnify such person
against such liability under the provisions of this Article ELEVENTH or
otherwise.
<PAGE> 4
(e) The rights to indemnification and reimbursement
or advancement of expenses provided by, or granted pursuant to, this Article
ELEVENTH shall not be deemed exclusive of any other rights to which a person
seeking indemnification or reimbursement or advancement of expenses may have or
hereafter be entitled under any statute, this Certificate of Incorporation, the
by-laws, any agreement, any vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office.
(f) (i) The rights to indemnification and
reimbursement or advancement of expenses provided by, or granted pursuant to,
this Article ELEVENTH shall continue as to a person who has ceased to be a
director or officer (or other person indemnified hereunder) and shall inure to
the benefit of the executors, administrators, legatees and distributees of such
person.
(ii) The provisions of this Article ELEVENTH
shall be a contract between the Corporation, on the one hand, and each director
and officer who serves in such capacity at any time while this Article ELEVENTH
is in effect and any other person indemnified hereunder, on the other hand,
pursuant to which the Corporation and each such director, officer, or other
person intend to be legally bound. No repeal or modification of this Article
ELEVENTH shall affect any rights or obligations with respect to any state of
facts then or theretofore existing or thereafter arising or any proceeding
theretofore or thereafter brought or threatened based in whole or in part upon
any such state of facts.
(g) The rights to indemnification and reimbursement
or advancement of expenses provided by, or granted pursuant to, this Article
ELEVENTH shall be enforceable by any person entitled to such indemnification or
reimbursement or advancement of expenses in any court of competent jurisdiction.
The burden of proving that such indemnification or reimbursement or advancement
of expenses is not appropriate shall be on the Corporation. Neither the failure
of the Corporation (including its Board of Directors, its independent legal
counsel and its stockholders) to have made a determination prior to the
commencement of such action that such indemnification or reimbursement or
advancement of expenses is proper in the circumstances nor an actual
determination by the Corporation (including its Board of Directors, its
independent legal counsel and its stockholders) that such person is not entitled
to such indemnification or reimbursement or advancement of expenses shall
constitute a defense to the action or create a presumption that such person is
not so entitled. Such a person shall also be indemnified for any expenses
incurred in connection with successfully establishing his or her right to such
indemnification or reimbursement or advancement of expenses, in whole or in
part, in any such proceeding.
(h) Any person entitled to be indemnified or to
reimbursement or advancement of expenses as a matter of right pursuant to this
Article ELEVENTH may elect to have the right to indemnification or reimbursement
or advancement of expenses interpreted on the basis of the applicable law in
effect at the time of the occurrence of the event or events giving rise to the
applicable action, suit or proceeding, to the extent permitted by law, or on the
basis of the applicable law in effect at the time such indemnification or
reimbursement or advancement of expenses is sought. Such election shall be made,
by a notice in writing to the Corporation, at the time indemnification or
reimbursement or advancement of expenses is sought; provided, however, that if
no such notice is given, the right to indemnification or reimbursement or
advancement of expenses shall be determined by the law in effect at the time
indemnification or reimbursement or advancement of expenses is sought.
<PAGE> 5
IN WITNESS WHEREOF, the undersigned has duly executed this Restated
Certificate of Incorporation on this 10th day of June 1998.
WESTPOINT STEVENS INC.
Attest: By: /s/ Holcombe T. Green, Jr.
--------------------------------
/s/ Christopher N. Zodrow Holcombe T. Green, Jr.
- ----------------------------------- Chairman of the Board and
Christopher N. Zodrow Chief Executive Officer
Vice President and Secretary
5
<PAGE> 1
EXHIBIT 4(a)
================================================================================
WESTPOINT STEVENS INC., as Issuer
and
The Bank of New York, as Trustee
---------------------
INDENTURE
Dated as of June 9, 1998
--------------------
$525,000,000
7 7/8% Senior Notes due 2005, Series A
7 7/8% Senior Notes due 2005, Series B
================================================================================
<PAGE> 2
Trust Indenture Indenture
Act Section Section
- --------------- ---------
ss.310 (a)(1)...................................... 6.09
(a)(2)...................................... 6.09
(a)(3)...................................... Not Applicable
(a)(4)...................................... Not Applicable
(b)......................................... 6.08, 6.10
ss.311 (a)......................................... 6.07
(b)......................................... 6.07
(c)......................................... Not Applicable
ss.312 (a)......................................... 7.01
(b)......................................... 7.02
(c)......................................... 7.02
ss.313 (a)......................................... 7.03
(b)......................................... 7.03
(c)......................................... 7.03
(d)......................................... 7.03
ss.314 (a)......................................... 7.04, 10.09
(b)......................................... Not Applicable
(c)(1)...................................... 1.04, 4.04
(c)(2)...................................... 1.04, 4.04,
(c)(3)...................................... Not Applicable
(d)......................................... Not Applicable
(e)......................................... 1.04
ss.315 (a)......................................... 6.01(a)
(b)......................................... 6.02
(c)......................................... 6.01(b)
(d)......................................... 6.01(c)
(e)......................................... 5.14
ss.316 (a) (last sentence) ........................ 3.14
(a)(1)(A)................................... 5.12
(a)(1)(B)................................... 5.13
(a)(2)...................................... Not Applicable
(b)......................................... 5.08
ss.317 (a)(1)...................................... 5.03
(a)(2)...................................... 5.04
(b)......................................... 10.03
ss.318 (a)......................................... 1.08
- ----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
Page
----
PARTIES................................................................ 1
RECITALS............................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.............................................1
Section 1.02. Other Definitions......................................23
Section 1.03. Rules of Construction..................................23
Section 1.04. Form of Documents Delivered to Trustee.................24
Section 1.05. Acts of Holders........................................24
Section 1.06. Notices, etc., to the Trustee and the Company..........25
Section 1.07. Notice to Holders; Waiver..............................26
Section 1.08. Conflict with Trust Indenture Act......................26
Section 1.09. Effect of Headings and Table of Contents...............27
Section 1.10. Successors and Assigns.................................27
Section 1.11. Separability Clause....................................27
Section 1.12. Benefits of Indenture..................................27
Section 1.13. GOVERNING LAW..........................................27
Section 1.14. No Recourse Against Others.............................27
Section 1.15. Independence of Covenants..............................27
Section 1.16. Exhibits...............................................28
Section 1.17. Counterparts...........................................28
Section 1.18. Duplicate Originals....................................28
ARTICLE TWO
SECURITY FORMS
Section 2.01. Form and Dating........................................28
ARTICLE THREE
THE SECURITIES
Section 3.01. Title and Terms........................................29
Section 3.02. Registrar and Paying Agent.............................30
Section 3.03. Execution and Authentication...........................30
Section 3.04. Temporary Securities...................................33
-i-
<PAGE> 4
Page
----
Section 3.05. Transfer and Exchange..................................33
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities.......34
Section 3.07. Payment of Interest; Interest Rights Preserved.........35
Section 3.08. Persons Deemed Owners..................................36
Section 3.09. Cancellation...........................................37
Section 3.10. Computation of Interest................................37
Section 3.11. Legal Holidays.........................................37
Section 3.12. CUSIP Number...........................................38
Section 3.13. Paying Agent To Hold Money in Trust....................38
Section 3.14. Treasury Securities....................................38
Section 3.15. Deposits of Monies.....................................39
Section 3.16. Book-Entry Provisions for Global Securities............39
Section 3.17. Special Transfer Provisions............................40
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance or Covenant
Defeasance......................................43
Section 4.02. Defeasance and Discharge...............................43
Section 4.03. Covenant Defeasance....................................44
Section 4.04. Conditions to Defeasance or Covenant Defeasance........45
Section 4.05. Deposited Money and U.S. Government Obligations To
Be Held in Trust; Other Miscellaneous
Provisions......................................47
Section 4.06. Reinstatement..........................................48
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default......................................49
Section 5.02. Acceleration of Maturity; Rescission and Annulment.....51
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee..........................52
Section 5.04. Trustee May File Proofs of Claims......................52
Section 5.05. Trustee May Enforce Claims Without Possession of
Securities......................................53
Section 5.06. Application of Money Collected.........................54
Section 5.07. Limitation on Suits....................................54
-ii-
<PAGE> 5
Page
----
Section 5.08. Unconditional Right of Holders To Receive
Principal, Premium and Interest.................55
Section 5.09. Restoration of Rights and Remedies.....................56
Section 5.10. Rights and Remedies Cumulative.........................56
Section 5.11. Delay or Omission Not Waiver...........................56
Section 5.12. Control by Majority....................................56
Section 5.13. Waiver of Past Defaults................................57
Section 5.14. Undertaking for Costs..................................57
Section 5.15. Waiver of Stay, Extension or Usury Laws................58
Section 5.16. Unconditional Right of Holders To Institute Certain
Suits...........................................58
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities....................59
Section 6.02. Notice of Defaults.....................................60
Section 6.03. Certain Rights of Trustee..............................60
Section 6.04. Trustee Not Responsible for Recitals, Dispositions
of Securities or Application of Proceeds
Thereof.........................................62
Section 6.05. Trustee and Agents May Hold Securities;
Collections; Etc................................62
Section 6.06. Money Held in Trust....................................62
Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim.....................................62
Section 6.08. Conflicting Interests..................................63
Section 6.09. Corporate Trustee Required; Eligibility................63
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.........................................64
Section 6.11. Acceptance of Appointment by Successor.................66
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business..........................67
Section 6.13. Trustee's Application for Instructions from the
Company.........................................67
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish
Trustee Names and Addresses of Holders..........68
Section 7.02. Communications of Holders..............................68
Section 7.03. Reports by Trustee.....................................69
-iii-
<PAGE> 6
Page
----
Section 7.04. Reports by Company.....................................69
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.01. Company May Consolidate, etc., Only on Certain
Terms...........................................70
Section 8.02. Successor Substituted..................................71
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders......................71
Section 9.02. Supplemental Indentures, Agreements and Waivers
with Consent of Holders.........................72
Section 9.03. Execution of Supplemental Indentures, Agreements
and Waivers.....................................74
Section 9.04. Effect of Supplemental Indentures......................75
Section 9.05. Conformity with Trust Indenture Act....................75
Section 9.06. Reference in Securities to Supplemental Indentures.....75
Section 9.07. Record Date............................................75
Section 9.08. Revocation and Effect of Consents......................76
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest............76
Section 10.02. Maintenance of Office or Agency.......................76
Section 10.03. Money for Security Payments To Be Held in Trust.......77
Section 10.04. Corporate Existence...................................79
Section 10.05. Payment of Taxes and Other Claims.....................79
Section 10.06. Maintenance of Properties.............................79
Section 10.07. Insurance.............................................80
Section 10.08. Books and Records.....................................80
Section 10.09. Provision of Financial Statements.....................80
Section 10.10. Change of Control Triggering Event....................80
Section 10.11. Limitation on Additional Indebtedness.................83
Section 10.12. Statement by Officers as to Default...................85
Section 10.13. Limitation on Liens...................................85
-iv-
<PAGE> 7
Page
----
Section 10.14. Limitation on Designations of Unrestricted
Subsidiaries....................................86
Section 10.15. Limitation on Sale and Leaseback Transactions.........87
Section 10.16. Compliance Certificates and Opinions..................87
Section 10.17. Application of Fall Away Covenants....................88
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.01. Right of Redemption...................................88
Section 11.02. Applicability of Article..............................88
Section 11.03. Election To Redeem; Notice to Trustee.................89
Section 11.04. Selection by Trustee of Securities To Be Redeemed.....89
Section 11.05. Notice of Redemption..................................90
Section 11.06. Deposit of Redemption Price...........................91
Section 11.07. Securities Payable on Redemption Date.................91
Section 11.08. Securities Redeemed or Purchased in Part..............91
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge of Indenture...............92
Section 12.02. Application of Trust Money............................93
Exhibit A-1 - Form of Initial Security
Exhibit A-2 - Form of Exchange Security
Exhibit B - Form of Legend for Book-Entry Securities
Exhibit C - Form of Certificate To Be Delivered in
Connection with Transfers to Non-QIB Accredited
Investors
Exhibit D - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S
-v-
<PAGE> 8
INDENTURE, dated as of June 9, 1998, between WestPoint Stevens Inc.,
a corporation incorporated under the laws of the State of Delaware (the
"Company"), as issuer, and The Bank of New York, a New York banking corporation,
as trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of 7 7/8%
Senior Notes due 2005, Series A, and 7 7/8% Senior Notes due 2005, Series B, to
be issued in exchange for the 7 7/8% Senior Notes due 2005, Series A, pursuant
to a Registration Rights Agreement (as defined), and, to provide therefor the
Company has duly authorized the execution and delivery of this Indenture.
All things necessary have been done to make the Securities (as
defined), when executed by the Company and authenticated and delivered hereunder
and duly issued by the Company, the valid obligations of the Company and to make
this Indenture a valid agreement of each of the Company and the Trustee in
accordance with the terms hereof.
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 (as hereinafter defined) of the
Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"8 3/4% Senior Notes" means the Company's 8 3/4% Senior Notes due
2001.
"9 3/8% Senior Subordinated Debentures" means the Company's 9 3/8%
Senior Subordinated Debentures due 2005.
"Acquired Indebtedness" means Indebtedness of a Person existing at
the time such Person becomes a Restricted Sub-
<PAGE> 9
-2-
sidiary or assumed in connection with an Asset Acquisition of such Person,
including, without limitation, Indebtedness incurred in connection with, or in
anticipation of, such Person's becoming a Restricted Subsidiary or such
acquisition.
"Affiliate" means, with respect to any specified Person, any other
Person which, directly or indirectly, controls, is controlled by or is under
direct or indirect common control with, such specified Person. For the purposes
of this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent Member" has the meaning set forth in Section 3.16.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) or Investment by the
Company or any Restricted Subsidiary to or in any other Person, or purchase or
acquisition of Capital Stock, by the Company or any of its Restricted
Subsidiaries of any other Person, in either case pursuant to which such other
Person shall become a Restricted Subsidiary of the Company or any of the
Restricted Subsidiaries or shall be merged with or into the Company or any of
the Restricted Subsidiaries or (ii) any acquisition by the Company or any of the
Restricted Subsidiaries of the assets of any Person which constitute
substantially all of an operating unit or business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease or other disposition to any Person other than the Company or a
Restricted Subsidiary, in one transaction or a series of related transactions
(including by way of sale and leaseback), of (i) any Capital Stock of any
Restricted Subsidiary or (ii) any other property or asset of the Company or any
Restricted Subsidiary outside of the ordinary course of business. The term
"Asset Sale" shall not include (a) any sale by the Company of its Capital Stock,
(b) sales of inventory, rental assets and real estate held for sale in the
ordinary course of business in accordance with past practices, (c) Capitalized
Lease Obligations or (d) sales of receivables as contemplated by the Trade
Receivables Facility.
<PAGE> 10
-3-
"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).
"Bankruptcy Law" means Title 11, United States Code or any similar
federal or state law relating to bankruptcy, insolvency, receivership,
winding-up, liquidation, reorganization or relief of debtors or the law of any
other jurisdiction 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.
"Bankruptcy Order" means any court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation,
receivership, winding-up, dissolution, "concordate" or reorganization, or
appointing a Custodian of a debtor or of all or any substantial part of a
debtor's property, or providing for the staying, arrangement, adjustment or
composition of indebtedness or other relief of a debtor.
"Board" means the Board of Directors of the Company.
"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, and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York,
State of New York are authorized or obligated by law, regulation or executive
order to close.
"Capital Stock" means, with respect to any Person, any and all
shares, partnership interests, participations, rights in, or other equivalents
(however designated and whether voting or non-voting) of, any Person, whether
outstanding on the Issue Date or issued after the Issue Date, and any and all
rights, warrants or options exchangeable for or convertible into such capital
stock.
<PAGE> 11
-4-
"Capitalized Lease Obligation" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required to be classified
and accounted for as a capital lease obligation under GAAP, and, for the purpose
of this Indenture, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) investments in direct obligations of
the United States government maturing within one year of the date of
acquisition, (ii) investments in certificates of deposit and money market
deposits maturing within one year of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United States,
any State thereof, the District of Columbia or any foreign jurisdiction having
capital, surplus and undivided profits aggregating in excess of $200 million,
(iii) repurchase obligations with a term of not more than 90 days for direct
obligations of the United States government or entered into with a bank meeting
the qualifications described in clause (ii) above, (iv) investment in commercial
paper given the highest rating by Standard & Poor's and Moody's and maturing not
more than one year from the date of acquisition, (v) investments in mutual funds
which invest exclusively in items described in (i)-(iv) above and (vi) demand
deposit accounts maintained in the ordinary course of business.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities 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 total
Voting Stock of the Company; or (b) the Company consolidates with, or merges
with or into, another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any person or
any person 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 converted into or exchanged for cash, securities or other property,
other than any such transaction where (i) the outstanding Voting Stock of the
Company is converted into or exchanged for (1) Voting Stock (other than
Disqualified Stock) of the surviving or transferee corporation or its parent
corpora-
<PAGE> 12
-5-
tion and/or (2) cash, securities and other property in an amount which could be
paid by the Company as a Restricted Payment under this Indenture and (ii)
immediately after such transaction no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) is the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities 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 total Voting Stock of the surviving or transferee corporation or
its parent corporation, as applicable; or (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board
(together with any new directors whose election by the Board or whose nomination
for election by the stockholders of the Company was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office.
"Change of Control Triggering Event" means the occurrence of both a
Change of Control and a Rating Decline.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, or if at any time after the execution of this
Indenture such Commission is not existing and performing the applicable duties
now assigned to it, then the body or bodies performing such duties at such time.
"Company" means the person named as the "Company" in the first
paragraph of this Indenture, until a successor person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by any one of its Chairman of the Board,
its Vice-Chairman, its Chief Executive Officer, its President or a Vice
President, and by its Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and delivered to the Trustee.
"Consolidated Adjusted Net Income" means, for any period, the
consolidated net income (or loss) of the Company and the Restricted Subsidiaries
for such period as determined in accordance with GAAP, adjusted, to the extent
included in calcu-
<PAGE> 13
-6-
lating such net income, by excluding, without duplication, (i) all extraordinary
gains or losses, (ii) the net income of any Person combined with the Company or
one of the Restricted Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (iii) any gain or
loss realized upon the termination of any employee pension benefit plan (on an
after-tax basis), (iv) gains in respect of any Asset Sales by the Company or one
of the Restricted Subsidiaries (on an after-tax basis), (v) the net income of
any Restricted Subsidiary to the extent that the declaration of dividends or the
making of distributions by that Restricted Subsidiary of that income is not at
the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, law,
rule or governmental regulations applicable to that Restricted Subsidiary or its
stockholders, (vi) the effect of any charge taken in connection with the
Financing Transactions, (vii) the amortization of goodwill, (viii) the non-cash
portion of any income taxes accrued in accordance with GAAP for such period and
(ix) all non-cash extraordinary, unusual or non-recurring charges for which no
cash accrual is required.
"Consolidated EBITDA" means, for any period, the Consolidated
Adjusted Net Income of the Company and the Restricted Subsidiaries for such
period increased to the extent deducted in determining Consolidated Adjusted Net
Income by the sum of: (i) all income taxes of the Company and the Restricted
Subsidiaries paid or accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary, unusual or non-recurring gains or
losses); (ii) all interest expense of the Company and the Restricted
Subsidiaries paid or accrued for such period (including amortization of original
issue discount and interest with respect to Capitalized Lease Obligations);
(iii) the aggregate amount of cash dividends and other distributions declared,
or paid on Capital Stock other than Common Stock of the Company and the
Restricted Subsidiaries for the period; (iv) depreciation expense of the Company
and the Restricted Subsidiaries; (v) amortization expense of the Company and the
Restricted Subsidiaries including, without limitation, amortization of
capitalized debt issuance costs; and (vi) any other non-cash charges of the
Company and the Restricted Subsidiaries to the extent deducted in determining
the Consolidated Adjusted Net Income of the Company, all determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBITDA Coverage Ratio" means the ratio of (i)
Consolidated EBITDA of the Company for the four full fiscal quarters for which
financial statements are available that
<PAGE> 14
-7-
immediately precede the date of the transaction or other circumstances giving
rise to the need to calculate the Consolidated EBITDA Coverage Ratio (the
"Transaction Date") to (ii) the sum of (a) all interest expense of the Company
and the Restricted Subsidiaries paid or accrued (including amortization of
original issue discount and interest with respect to Capitalized Lease
Obligations) and (b) the aggregate amount of cash dividends and other
distributions declared or paid on Disqualified Stock of the Company and the
Restricted Subsidiaries, in each case for such four full fiscal quarter period.
For purposes of this definition, if the Transaction Date occurs prior to the
date on which the Company's consolidated financial statements for the four full
fiscal quarters subsequent to the Issue Date are first available, "Consolidated
EBITDA" and the items referred to in the preceding clause (ii) shall be
calculated after giving effect on a pro forma basis as if the applicable issue
of Securities outstanding on the Transaction Date were issued on the first day
of such four full fiscal quarter period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and the
items referred to in the preceding clause (ii) shall be calculated after giving
effect on a pro forma basis for the period of such calculation to (i) the
incurrence of any Indebtedness of the Company or any of the Restricted
Subsidiaries at any time during the period (the "Reference Period") (A)
commencing on the first day of the four full fiscal quarter period for which
financial statements are available that precedes the Transaction Date and (B)
ending on and including the Transaction Date, including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such calculation,
as if such incurrence occurred on the first day of the Reference Period; and
(ii) any Asset Sales or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of the Company or any of the Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring
Acquired Indebtedness) occurring during the Reference Period and any retirement
of Indebtedness in connection with such Asset Sales, as if such Asset Sale or
Asset Acquisition and/or retirement occurred on the first day of the Reference
Period. Furthermore, in calculating the denominator (but not the numerator) of
the Consolidated EBITDA Coverage Ratio, (1) interest on Indebtedness determined
on a fluctuating basis as of the Transaction Date and which will continue to be
so determined thereafter shall be deemed to accrue at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; and (2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest
<PAGE> 15
-8-
is covered by agreements relating to Interest Rate Protection Obligations, shall
be deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreements. If the Company or any of the Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
this definition shall give effect to the incurrence of such guaranteed
Indebtedness as if the Company or Restricted Subsidiary had directly incurred
such guaranteed Indebtedness.
"control" means, with respect to any specified person, the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 101 Barclay Street, Floor 21 West, New York, New York 10286, Attention:
Corporate Trust Trustee Administration.
"Custodian" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other law respecting secured
creditors and the enforcement of their security or any other person with like
powers whether appointed judicially or out of court and whether pursuant to an
interim or final appointment.
"Debt Securities" means any debt securities (including any guarantee
of such securities) issued by the Company and/or any Restricted Subsidiary in
connection with a public offering (whether or not underwritten) or a private
placement (provided that such private placement is underwritten for resale
pursuant to Rule 144A, Regulation S or otherwise under the Securities Act or
sold on an agency basis by a broker-dealer or one of its Affiliates to 10 or
more beneficial holders).
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees
and successors.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by
<PAGE> 16
-9-
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable (in each case, other than into common stock of the Company), pursuant
to a sinking fund obligation or otherwise, or is exchangeable for Indebtedness,
or is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final Maturity Date of the specified Security. Notwithstanding the
foregoing, in no event shall Capital Stock that is considered Disqualified Stock
solely by reason of such Capital Stock being convertible at the option of the
holder of such capital stock into other Capital Stock (other than Disqualified
Stock) constitute Disqualified Stock.
"Duff & Phelps" means Duff and Phelps Credit Rating Co. and
its successors.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Securities" means 7 7/8% Senior Notes due 2005, Series B
(the terms of which are identical to the Initial Securities except that the
Exchange Securities shall be registered under the Securities Act, and shall not
contain the restrictive legend on the face of the form of Initial Securities),
issued pursuant to this Indenture.
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.
"Financing Transactions" means the consummation of (i) the offering
by the Company of $525,000,000 aggregate principal amount of the Securities and
$475,000,000 aggregate principal amount of its Senior Notes due 2008, (ii) the
Company's tender offers to purchase all of the 8 3/4% Senior Notes and all of
the 9 3/8% Senior Subordinated Debentures, (iii) the redemption of the Company's
9% Sinking Fund Debentures due 2017 and (iv) the Senior Credit Facility and the
availability of funds thereunder.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the
<PAGE> 17
-10-
accounting profession of the United States, which are applicable as of the date
of determination. The Company may, by notice to the Trustee, elect to use GAAP
principles as in effect on the date of such election.
"Global Security" has the meaning provided in Section 3.03
hereof.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books, as the context requires.
"incur" means, with respect to any Indebtedness, to directly or
indirectly create, incur, assume, unconditionally guarantee or in any manner
become liable for such Indebtedness, whether contingently or otherwise, provided
that neither the accrual of interest nor the acquisition of original issue
discount shall be considered an incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all obligations for borrowed money, (ii) all obligations
evidenced by bonds, Securities, notes or other similar instruments, (iii) all
Capitalized Lease Obligations, (iv) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale obligations and all
obligations under any title retention agreement which purchase price is due more
than six months from the date of incurrence (but excluding trade accounts
payable arising in the ordinary course of business), (v) all obligations issued
or contracted for as payment in consideration of the purchase by such Person of
the stock or substantially all the assets of another Person or a merger or
consolidation, (vi) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transactions entered
into in the ordinary course of business, (vii) all obligations of the type
referred to in clauses (i) through (vi) of other Persons and all dividends of
other Persons for the payment of which, in either case, such Person is directly
or indirectly responsible or liable as obligor, guarantor or otherwise and
(viii) all obligations of the type referred to in clauses (i) through (vii) of
other Persons which are secured by any Lien on any property or asset of such
Person, the amount of such obligation being deemed to be the lesser of the value
of such property or asset or the amount of the obligation so secured. For
purposes of Section 10.11, "Indebtedness" shall include all Capital Stock that
is (i) in the case of any Restricted Subsidiary, not common stock of such
Restricted Subsidiary and (ii) Disqualified Stock of the Company.
<PAGE> 18
-11-
"Indenture" means this instrument as originally executed (including
all exhibits and schedules hereto) 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.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Securities to pay principal of,
premium, if any, and interest on the Securities when due and payable, whether at
maturity, by acceleration, call for redemption or repurchase or otherwise, and
all other amounts due or to become due under or in connection with this
Indenture or the Securities and the performance of all other obligations to the
Trustee (including, but not limited to, payment of all amounts due the Trustee
under Section 6.07 hereof) and the Holders of the Securities under this
Indenture and the Securities, according to the terms thereof.
"Initial Purchasers" means Merrill Lynch, Goldman Sachs & Co.,
NationsBanc, Montgomery Securities LLC, BNY Capital Markets, Inc., First Chicago
Capital Markets, Inc. and Scotia Capital Markets.
"Initial Securities" means the 7 7/8% Senior Notes due 2005, Series
A, for so long as such securities constitute Restricted Securities.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest," when used with respect to any Security, means the amount
of all interest accruing on such Security, including all additional interest
payable on the Securities pursuant to the Registration Rights Agreement and all
interest accruing subsequent to the occurrence of any events specified in
Sections 5.01(g), (h) and (i) or which would have accrued but for any such
event, whether or not such claims are allowable under applicable law.
"Interest Payment Date" means, when used with respect to any
Security, the Stated Maturity of an installment of interest on such Security, as
set forth in such Security.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated
<PAGE> 19
-12-
by applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include without limitation, interest rate swaps, caps, floors, collars and
similar agreements.
"Investment" means, with respect to any person, any direct or
indirect advance, loan or other extension of credit (including by means of a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others or otherwise), or any purchase or acquisition by such person of
any Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by any other person. Investments will exclude extensions of
trade credit on commercially reasonable terms in accordance with normal trade
practices. In addition to the foregoing, any foreign exchange contract, currency
swap, Interest Rate Protection Obligation or similar agreement shall constitute
an Investment.
"Investment Grade Rating" has the meaning provided in Section 10.17
hereof.
"Issue Date" means the original date of issuance of the Securities.
"Lien" means any mortgage, lien (statutory or other), pledge,
security interest, encumbrance, claim, hypothecation, assignment for security,
or preference or other security agreement of any kind or nature whatsoever. For
purposes of this Indenture, a Person shall be deemed to own subject to a Lien
any property which it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to Indebtedness of such Person.
"Make-Whole Premium" means, with respect to any Security at any
Redemption Date, the excess, if any, of (a) the aggregate present value of the
sum of the principal and premium amount of such Securities, discounted on a
semi-annual bond equivalent basis from such Redemption Date to June 15, 2005, at
a per annum interest equal to the sum of the Treasury Yield (determined on the
Business Day immediately preceding the date of such redemption or declaration of
accelerated payment) plus 37.5 basis points over (b) the aggregate principal
amount of the Security being redeemed or paid.
<PAGE> 20
-13-
"Maturity Date" means, with respect to any Security, the date on
which any principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity with respect to such principal
or by declaration of acceleration, call for redemption or purchase or otherwise.
"Merrill Lynch" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Non-Global Purchasers" shall have the meaning specified in Section
3.03 hereof.
"Offering Memorandum" means the Offering Memorandum dated June 3,
1998 pursuant to which the Initial Securities were offered, and any supplement
thereto.
"Officer" means, with respect to the Company, the Chairman of the
Board, a Vice Chairman, the President, a Vice President, the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman, the President or a Vice President, and by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer, of
the Company and delivered to the Trustee.
"Offshore Physical Securities" shall have the meaning specified in
Section 3.03 hereof.
"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.
"Outstanding" means, as of the date of determination, all Securities
theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) 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 or any
Affiliate thereof) in trust
<PAGE> 21
-14-
or set aside and segregated in trust by the Company or any Affiliate
thereof (if the Company or Affiliate shall act as Paying Agent) for the
Holders of such Securities; provided, however, that if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Securities with respect to which the Company has effected
defeasance or covenant defeasance as provided in Article Four, to the
extent provided in Sections 4.02 and 4.03; and
(iv) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands the Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company 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 that a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. The Company shall notify
the Trustee, in writing, when it repurchases or otherwise acquires Securities,
of the aggregate principal amount of such Securities so repurchased or otherwise
acquired. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the 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. If the Paying Agent holds, in
its capacity as such, on any Maturity Date or on any optional redemption date
money sufficient to pay all accrued interest and principal with respect to such
Securities payable on that date and is not prohibited from paying such money to
the Holders thereof pursuant to the terms of this Indenture, then on and after
that date such Securities cease to be Outstanding and interest on them ceases to
accrue. Securities may
<PAGE> 22
-15-
also cease to be outstanding to the extent expressly provided in Article Eight.
"Paying Agent" shall have the meaning specified in Section 3.02
hereof.
"Permitted Liens" means (a) Liens on property of (or on shares of
Capital Stock or debt securities of) a Person existing at the time such Person
(i) is merged into or consolidated with the Company or any Restricted Subsidiary
or (ii) becomes a Restricted Subsidiary; provided, however, that such Liens were
in existence prior to the contemplation of such merger, consolidation or
acquisition and do not secure any property or assets of the Company or any
Restricted Subsidiary other than the property or assets subject to the Liens
prior to such merger, consolidation or acquisition; (b) Liens existing on the
Issue Date; (c) Liens in favor of the Company or Liens on any property or assets
of a Subsidiary (or on shares of Capital Stock or debt securities of a
Subsidiary) in favor of the Company or any Restricted Subsidiary; (d) Liens
resulting from the deposit of cash or notes in connection with contracts,
tenders or expropriation proceedings, or to secure workers' compensation, surety
or appeal bonds, costs of litigation when required by law, public and statutory
obligations, obligations under franchise arrangements entered into in the
ordinary course of business and other obligations of a similar nature arising in
the ordinary course of business; (e) Liens securing Indebtedness under the
Senior Credit Facility; (f) Liens securing Indebtedness consisting of
Capitalized Lease Obligations, Purchase Money Indebtedness, mortgage financings,
industrial revenue bonds or other monetary obligations, in each case incurred
solely for the purpose of financing all or any part of the purchase price or
cost of construction or installation of assets used in the business of the
Company or the Restricted Subsidiaries, or repairs, additions or improvements to
such assets; provided, however, that (I) such Liens secure Indebtedness in an
amount not in excess of the original purchase price or the original cost of any
such assets or repair, addition or improvement thereto (plus an amount equal to
the reasonable fees and expenses in connection with the incurrence of such
Indebtedness), (II) such Liens do not extend to any other assets of the Company
or any of the Restricted Subsidiaries (and, in the case of repair, addition or
improvements to any such assets, such Lien extends only to the assets (and
improvements thereto or thereon) repaired, added to or improved), (III) the
incurrence of such Indebtedness is permitted by Section 10.11 and (IV) such
Liens attach prior to 270 days after such purchase, construction, installation,
repair, addition or improvement; (g) Liens to secure any refinanc-
<PAGE> 23
-16-
ings (or successive refinancings), in whole or in part, of any Indebtedness
secured by Liens referred to in the clauses above so long as such Lien does not
extend to any other property (other than improvements thereto); (h) Liens
securing letters of credit entered into in the ordinary course of business and
consistent with past business practice; (i) Liens on and pledges of the capital
stock of any Unrestricted Subsidiary; (j) Liens arising from the rendering of a
judgment or order against the Company or any Restricted Subsidiary that does not
give rise to an Event of Default; (k) Liens arising out of conditional sale,
title retention, consignment or similar arrangements for the sale of goods
entered into by the Company or any Restricted Subsidiary in the ordinary course
of business; (l) Liens arising out of any sale of accounts receivable in the
ordinary course to or by a Receivables Subsidiary; (m) Liens on acquired
property or assets of a Restricted Subsidiary to secure Indebtedness of such
Restricted Subsidiary (other than Indebtedness evidenced by Disqualified Stock)
or a guarantee thereof; provided, however, that such Liens were not created in
contemplation of such acquisition; (n) Liens to secure the Indebtedness
described in clause (i) of Section 10.11; and (o) Liens on assets of Restricted
Subsidiaries to secure Indebtedness of the Company and the Restricted
Subsidiaries (other than Debt Securities).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Physical Security" shall have the meaning specified in Section 3.03
hereof.
"Predecessor Security" means, with respect to any particular
Security, 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 3.06 hereof
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.
"Private Exchange Securities" shall have the meaning set forth in
the Registration Rights Agreement.
"Private Placement Legend" shall mean the first paragraph of the
legend initially set forth in the Securities in the form set forth on Exhibit
A-1.
<PAGE> 24
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"Productive Assets" means assets of a kind used or usable in the
business of the Company and the Restricted Subsidiaries.
"Purchase Money Indebtedness" means Indebtedness of the Company or
any Restricted Subsidiary (i) issued to finance or refinance (including any
extensions or renewals) the purchase or construction of any assets of the
Company or any Restricted Subsidiary or (ii) secured by a Lien on any assets of
the Company or any Restricted Subsidiary where the lender's sole recourse is to
the assets so encumbered in either case to the extent (a) the purchase or
construction costs for such assets are included as an asset on the balance sheet
of the Company in accordance with GAAP and (b) the purchase or construction of
such assets is not part of any acquisition of a Person or a business unit.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Rating Agencies" means (i) Standard & Poor's, (ii) Moody's and
(iii) Duff & Phelps.
"Rating Category" means (i) with respect to Standard & Poor's, any
of the following categories: BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: Ba,
B, Caa, Ca, C and D (or equivalent successor categories); and (iii) with respect
to Duff & Phelps BB, B, CCC and D (or equivalent successor categories). In
determining whether the rating of the Securities has decreased by one or more
gradations, gradations within Rating Categories (+ and - for Standard & Poor's;
1, 2 and 3 for Moody's; or + and - for Duff & Phelps) shall be taken into
account (e.g., with respect to Standard & Poor's, a decline in a rating from BB+
to BB, as well as from BB- to B+, will constitute a decrease of one gradation).
"Rating Date" means the date which is 90 days prior to the earlier
of (i) a Change of Control and (ii) public notice of the occurrence of a Change
of Control or of the intention by the Company to effect a Change of Control.
"Rating Decline" means the occurrence of the following on, or within
90 days after, the earlier of (i) the occurrence of a Change of Control and (ii)
the date of public notice of the occurrence of a Change of Control or of the
public notice of the intention of the Company to effect a Change of Control
(which period shall be extended so long as the rating of the Se-
<PAGE> 25
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curities is under publicly announced consideration for possible downgrading by
any two of the Rating Agencies): (a) in the event that the Securities have an
Investment Grade Rating, the rating of the Securities by two of such Rating
Agencies shall be reduced below Investment Grade, or (b) in the event the
Securities are rated below Investment Grade by two of such Rating Agencies on
the Rating Date, the rating of the Securities by any of two Rating Agencies
shall be decreased by one or more gradations (including gradations within Rating
Categories as well as between Rating Categories).
"Receivables Subsidiary" means a bankruptcy-remote Subsidiary of the
Company party to a Trade Receivables Facility. The term "bankruptcy remote"
means that the Receivables Subsidiary's charter and by-laws and certain other
documentation relating to a Trade Receivables Facility will contain provisions
that are intended to prevent such Subsidiary from becoming subject to a
voluntary or involuntary bankruptcy proceeding. These provisions may include a
requirement of one or more directors who are not otherwise affiliated with the
Company.
"Redemption Date" means, with respect to any Security to be
redeemed, the date fixed by the Company for such redemption pursuant to this
Indenture and Securities.
"Redemption Price" means, with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture and
the terms of the Securities.
"Registered Exchange Offer" means the registration by the Company
under the Securities Act of all Exchange Securities pursuant to a registration
statement under which the Company offers each Holder of Initial Securities the
opportunity to exchange all Initial Securities held by such Holder for Exchange
Securities in an aggregate principal amount equal to the aggregate principal
amount of Initial Securities held by such Holder, all in accordance with the
terms and conditions of the Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of June 9, 1998 by and among the Company and the Initial
Purchasers, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"Regular Record Date" means the Regular Record Date specified in the
Securities.
<PAGE> 26
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"Regulation S" means Regulation S under the Securities Act.
"Responsible Officer" means, with respect to the Trustee, any vice
president, any assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, any trust officer or assistant trust
officer, or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer 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 Security" shall have the meaning specified 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 a Security is a Restricted Security.
"Restricted Subsidiaries" means all of the Company's existing and
future Subsidiaries that are not designated Unrestricted Subsidiaries on the
Issue Date or in accordance with Section 10.14.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale/Leaseback Transaction" means any arrangement with any Person
providing for the leasing to the Company or any Restricted Subsidiary of any
real or tangible personal property (except for leases between or among the
Company and any of the Restricted Subsidiaries), which property has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person in contemplation of such leasing.
"Securities" means, collectively the Initial Securities, the
Exchange Securities and the Private Exchange Securities, if any, treated a
single class of securities, as amended or supplemented from time to time in
accordance with the terms of this Indenture, that are issued pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" shall have the respective meanings specified in
Section 3.05 hereof.
<PAGE> 27
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"Security Registrar" or "Registrar" shall have the meaning specified
in Section 3.02 hereof.
"Senior Credit Facility" means the Second Amended and Restated
Credit Agreement dated as of June 9, 1998, among the Company, the financial
institutions party thereto in their capacities as lenders thereunder and
NationsBank, N.A., as Administrative Agent for the lenders, as the same may be
amended from time to time and increased in compliance with Section 10.11, and
any agreement evidencing (whether initial or successive) one or more
refinancings, modifications, replacements, renewals, restatements, refundings,
deferrals, extensions, substitutions, supplements, reissuances or resales
thereof.
"Significant Subsidiary" means, at any particular time, any
Restricted Subsidiary that (a) accounted for more than 10% of the consolidated
revenues or Consolidated EBITDA of the Company and the Restricted Subsidiaries
on a consolidated basis for the most recently completed fiscal year of the
Company or (b) was the owner of more than 10% of the consolidated assets of the
Company and the Restricted Subsidiaries on a consolidated basis as at the end of
such fiscal year, all as shown on the consolidated financial statements of the
Company and the Restricted Subsidiaries for such fiscal year.
"Special Record Date" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.07 hereof.
"Stated Maturity" means, with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness, or
any installment of interest thereon, is due and payable.
"Standard & Poor's" means Standard & Poor's Ratings Service and its
successors.
Subordinated Indebtedness" means Indebtedness of the Company which
is expressly subordinated in right of payment to the Securities.
"Subsidiary" means, with respect to any Person, (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the
<PAGE> 28
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election of directors shall at the time be owned, directly or indirectly, by
such Person, or (ii) any other Person of which at least a majority of voting
interest is at the time, directly or indirectly, owned by such Person.
"Tender Offer Documents" means the Offer to Purchase dated April 29,
1998 relating to the 8 3/4% Senior Notes and 9 3/8% Senior Subordinated
Debentures, as the same may be amended or supplemented from time to time (other
than the Minimum Condition and Supplemental Indenture Condition set forth
therein).
"Trade Receivables Facility" means the arrangements entered into or
that may be entered into by the Company or one or more of its Subsidiaries
pursuant to which the Company or one or more of its Subsidiaries may either
transfer to any other Person or grant a security interest in any trade or other
receivables (whether now existing or arising in the future) and any assets
related to such trade or other receivables including, without limitation, all
collateral securing such trade or other receivables and shall include any
contributions of trade or other receivables and related assets in exchange for
the capital stock of the Receivables Subsidiary and other capital contributions
of trade or other receivables and related assets to the Receivables Subsidiary.
"Treasury Yield" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve Statistical Release
H.15 (519) which has become publicly available at least two Business Days prior
to the date fixed for redemption (or, if such Statistical Release is no longer
published, any publicly available source of similar data)) most nearly equal to
the then remaining average life of the Securities; provided, that if the average
life of the Securities is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury yield
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of United States Treasury securities
for which such yields are given, except that if the average life of the
Securities is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended.
<PAGE> 29
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"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.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such on the Issue Date and any other Subsidiary designated as such
pursuant to and in compliance with the covenant described in Section 10.14. Any
such designation may be revoked by a Board Resolution of the Company delivered
to the Trustee, subject to the provisions of Section 10.14.
"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.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
to vote in the election of members of the board of directors of such Person.
"Wholly Owned Subsidiary" means any Restricted Subsidiary, 100% of
the Capital Stock of which (other than shares of Capital Stock representing any
director's qualifying shares of investments by foreign nationals mandated by
applicable law not in any event to exceed 5% of the total outstanding Capital
Stock) is owned by the Company, by a Wholly Owned Restricted Subsidiary or by
the Company and a Wholly Owned Restricted Subsidiary.
<PAGE> 30
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Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Act" 1.05
"Change of Control Date" 10.10
"Change of Control Offer" 10.10
"Change of Control Payment Date" 10.10
"covenant defeasance" 4.03
"Defaulted Interest" 3.07
"defeasance" 4.02
"Defeased Securities" 4.01
"insolvent person" 4.04
"Surviving Entity" 8.01
</TABLE>
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(e) all references to "$" or "dollars" shall refer to the lawful
currency of the United States of America; and
(f) the words "include," "included" and "including" as used herein
shall be deemed in each case to be followed by the phrase "without
limitation."
<PAGE> 31
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Section 1.04. 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 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 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 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 such certificate or opinion may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
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, with
proper identification of each matter covered therein, and form one instrument.
Section 1.05. 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 exe-
<PAGE> 32
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cution (as provided below in subsection (b) of this Section 1.05) of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security or the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof to the same extent
as the original Holder, in respect of anything done, suffered or omitted to be
done by the Trustee, any Paying Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
Section 1.06. Notices, etc., to the 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 shall be sufficient
for every purpose hereunder if made, given, furnished or filed, in
writing, to or with the Trustee at The Bank of New York, 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate
Trust Trustee Administration or at any other address previously furnished
in writing to the Holders, the Company by the Trustee; or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose (except as otherwise expressly provided herein)
hereunder if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at WestPoint Stevens Inc., 1185 Avenue of the
Americas, 13th Floor, New York, New York 10036, Attention: Chief Executive
Officer, or at any other address
<PAGE> 33
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previously furnished in writing to the Trustee by the Company.
Section 1.07. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise expressly provided
herein) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. 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, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
<PAGE> 34
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Section 1.09. 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 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its respective successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause.
In case any provision in this Indenture or in the Securities issued
pursuant hereto 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 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Securities or issued pursuant
hereto, 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 1.13. 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 PRINCIPLES OF CONFLICTS OF LAW.
Section 1.14. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation.
Section 1.15. Independence of Covenants.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or
<PAGE> 35
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condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
condition exists.
Section 1.16. Exhibits.
All exhibits attached hereto are by this reference made a part
hereof with the same effect as if herein set forth in full.
Section 1.17. 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 1.18. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
ARTICLE TWO
SECURITY FORMS
Section 2.01. Form and Dating.
The Initial Securities and the Exchange Securities and the Trustee's
certificate of authentication with respect thereto shall be in substantially the
forms set forth, or referenced, in Exhibit A-1 and Exhibit A-2, respectively,
annexed hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any applicable law
or with the rules of the Depository, any clearing agency or any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof.
<PAGE> 36
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The definitive Securities shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
Each Security shall be dated the date of its authentication. The
terms and provisions contained in the Securities shall constitute, and are
expressly made, a part of this Indenture.
ARTICLE THREE
THE SECURITIES
Section 3.01. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $525,000,000 in
aggregate principal amount of Securities, except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities pursuant to Section 3.03, 3.04, 3.05, 3.06, 9.06, 10.10 or
11.08.
The final Stated Maturity of the Securities shall be June 15, 2005,
and the Securities shall bear interest at the rate of 7 7/8% per annum from the
Issue Date or from the most recent Interest Payment Date to which interest has
been paid, as the case may be, payable on December 15, 1998 and semi-annually
thereafter on June 15 and December 15, in each year, until the principal thereof
is paid or duly provided for. Interest on any overdue principal, interest (to
the extent lawful) or premium, if any, shall be payable on demand.
The Securities shall be redeemable as provided in Article Eleven and
as provided in the Securities.
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
<PAGE> 37
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Section 3.02. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Securities may be presented for registration of transfer or for exchange
(the "Security Registrar" or "Registrar"), an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Securities may be presented for payment (the "Paying Agent" or "Agent")
and an office or agency where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" or "Agent" includes any additional paying agent.
The Company may act as its own Paying Agent, except for the purposes of payments
on account of principal on the Securities pursuant to Section 10.10.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the Trust Indenture Act. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 6.07 hereof.
The Company initially appoints the Trustee as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Securities.
Section 3.03. Execution and Authentication.
Two Officers shall execute the Securities on behalf of the Company
by either manual or facsimile signature.
Securities bearing the manual or facsimile signature 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.
<PAGE> 38
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At any time and from time to time after the execution and delivery
of this Indenture, the Company many 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 Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as
provided in this Indenture and not otherwise.
A Security shall not be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose until the Trustee manually signs the
certificate of authentication on the Security. The Trustee's signature on such
certificate shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate Initial Securities for original issue
in an aggregate principal amount not to exceed $525,000,000, upon receipt of a
Company Order. In addition, on or prior to the date of the Registered Exchange
Offer, the Trustee or an authenticating agent shall authenticate Exchange
Securities (including any Private Exchange Securities which will be in the form
of Exhibit A-2 but which shall have the restrictive legend contained in Exhibit
A-1) to be issued at the time of the Registered Exchange Offer in the aggregate
principal amount of up to $525,000,000 upon receipt of a Company Order of the
Company. In each case, the Company Order shall specify the amount of Securities
to be authenticated, the names of the persons in which such Securities shall be
registered and the date on which such Securities are to be authenticated and
direct the Trustee to authenticate such Securities together with an Officer's
Certificate certifying that all conditions precedent to the issuance of such
Securities contained herein have been complied with. The aggregate principal
amount of Securities outstanding at any time may not exceed $525,000,000, except
as provided in Section 3.04 hereof.
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. Such authenticating agent shall have the same authenticating rights and
duties as the Trustee in any dealings hereunder with the Company or with any
Affiliate of the Company.
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The certificates representing the Securities will be issued in fully
registered form, without coupons and only in denominations of $1,000 and any
integral multiple thereof. Except as described below, the Securities will be
deposited with, or on behalf of, the Depository, and registered in the name of
Cede & Co. as the Depository's nominee in the form of a global note certificate
substantially in the form of Exhibit A-1 (the "Global Security").
Securities purchased by or transferred to (i) Institutional
Accredited Investors who are not Qualified Institutional Buyers, (ii) except as
described below, persons outside the United States pursuant to sales in
accordance with Regulation S under the Securities Act or (iii) any other persons
who are not Qualified Institutional Buyers (collectively, "Non-Global
Purchasers") will be issued in registered form without coupons substantially in
the form of Exhibit A-1 (the "U.S. Physical Securities"). Upon the transfer to a
Qualified Institutional Buyer of U.S. Physical Securities initially issued to a
Non-Global Purchaser, such U.S. Physical Security will be exchanged for an
interest in the Global Security or in the Securities in the custody of the
Trustee representing the principal amount of Securities being transferred.
Securities purchased by persons outside the United States pursuant
to sales in accordance with Regulation S under the Securities Act will be
represented upon issuance by a temporary global note certificate substantially
in the form of Exhibit A-1 (the "Offshore Physical Securities" and, together
with the U.S. Physical Securities, the "Physical Securities") which will not be
exchangeable for U.S. Physical Securities until the expiration of the "40-day
restricted period" within the meaning of Rule 903(c)(3) of Regulation S under
the Securities Act. The Offshore Physical Securities will be registered in the
name of, and be held by, an offshore physical security holder (the "Offshore
Physical Security Holder") until the expiration of such 40-day period, at which
time the Offshore Physical Securities will be delivered to the Trustee in
exchange for Securities registered in the names requested by the Offshore
Physical Security Holder. In addition, until the expiration of such 40-day
period, transfers of interests in the Offshore Physical Securities can only be
effected through the Offshore Physical Security Holder in accordance with the
requirements of Section 3.17 hereof.
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Section 3.04. Temporary Securities.
Until definitive Securities are prepared and ready for delivery, the
Company may execute and upon a Company Order the Trustee shall authenticate and
deliver temporary Securities. Temporary Securities shall be substantially in the
form of definitive Securities, in any authorized denominations, but may have
variations that the Company reasonably considers appropriate for temporary
Securities as conclusively evidenced by the Company's execution of such
temporary Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay but in no event
later than the date that the Registered Exchange Offer is consummated. 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 10.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of like tenor and 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 3.05. Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being sometimes referred
to herein as the "Securities Register") in which, subject to such reasonable
regulations as the Securities Registrar may prescribe, the Company shall provide
for the registration of Securities and of transfers and exchanges of Securities.
The Trustee is hereby initially appointed Security Registrar for the purpose of
registering Securities and transfers of Securities as herein provided.
When Securities are presented to the Registrar or a co-Registrar
with a request from the Holder of such Securities to register the transfer or
exchange for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested; provided that every Security presented or surrendered for
registration of transfer or exchange shall be duly
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endorsed or be accompanied by a written instrument of transfer or exchange in
form satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. Whenever any Securities are
so presented 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. No service charge shall be made to the Securityholder for
any registration of transfer or exchange. The Company may require from the
Securityholder payment of a sum sufficient to cover any transfer taxes or other
governmental charge that may be imposed in relation to a transfer or exchange,
but this provision shall not apply to any exchange pursuant to Section 3.09,
10.10 or 9.06 hereof (in which events the Company will be responsible for the
payment of all such taxes which arise solely as a result of the transfer or
exchange and do not depend on the tax status of the Holder). The Trustee shall
not be required to exchange or register the transfer of any Security for a
period of 15 days immediately preceding the first mailing of notice of
redemption of Securities to be redeemed or of any Security selected, called or
being called for redemption except, in the case of any Security where public
notice has been given that such Security is to be redeemed in part, the portion
thereof not to be redeemed.
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.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security of any series claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall execute and upon a Company
Order, the Trustee shall authenticate and deliver a replacement Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding,
if the Holder of such Security furnishes to the Company and to the Trustee
evidence reasonably acceptable to them of the ownership and the destruction,
loss or theft of such Security and an indemnity bond shall be posted, sufficient
in the judgment of the Company or the Trustee, as the case may be, to protect
the Company, the Trustee or any Agent from any loss that any of them may suffer
if such Security is replaced. The Company may charge such Holder for the
Company's expenses
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in replacing such Security (including expenses of the Trustee charged to the
Company) and the Trustee may charge the Company for the Trustee's expenses
(including the reasonable fees and expenses of its agents and counsel) in
replacing such Security.
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, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Securities,
to the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the Regular Record Date; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Securities (or their respective
Predecessor 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, and at the same
time the Company shall deposit with the Trustee an amount of money equal
to the
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aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted
Interest as in this subsection (a) provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date
of the proposed payment and not less than 10 days after the actual receipt
by a Responsible Officer of the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company in writing of such
Special Record Date. In the name and at the expense of the Company, the
Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder at its 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 (or
their respective Predecessor Securities) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after written notice given
by the Company to the Trustee of the proposed payment pursuant to this
subsection (b), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 3.08. Persons Deemed Owners.
Prior to and at the time of due presentment 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 in the Security
Register as the
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owner of such Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.07) interest on such Security and for
all other purposes whatsoever, whether or not such Security shall be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 3.09. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. The Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer or exchange,
redemption or payment. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section 3.09, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall
be returned to the Company.
Section 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
Section 3.11. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, date
established for the payment of Defaulted Interest 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 principal, premium, if any,
or interest 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, Redemption Date, date established for the payment of
Defaulted Interest or at the Stated Maturity, as the case may be, and no
interest shall accrue with respect to such payment for the period from and after
such Interest Payment Date, Redemption Date, date established for the payment of
Defaulted Interest or Stated Maturity, as the case may be, to the next
succeeding Business Day.
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Section 3.12. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number (if
then generally in use), and if so, the Trustee may use the CUSIP numbers in
notices of redemption or exchange as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the Trustee
in writing of any change in the CUSIP number of either series of Securities.
Section 3.13. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, or interest on the Securities, and
shall notify the Trustee of any default by the Company in making any such
payment. Money held in trust by the Paying Agent need not be segregated except
as required by law and in no event shall the Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require the Paying Agent to pay all money held by it to the Trustee and account
for any funds disbursed and the Trustee may at any time during the continuance
of any Event of Default, upon a Company Order to the Paying Agent, require such
Paying Agent to pay forthwith all money so held by it to the Trustee and to
account for any funds disbursed. Upon making such payment, the Paying Agent
shall have no further liability for the money delivered to the Trustee.
Section 3.14. Treasury Securities.
In determining whether the Holders of the required aggregate
principal amount of Securities have concurred in any direction, waiver, consent
or notice, Securities owned by the Company or an Affiliate of the Company shall
be considered as though they are not outstanding, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which a Responsible Officer of the
Trustee actually knows are so owned shall be so considered. The Company shall
notify the Trustee, in writing, when it or any of its Affiliates repurchases or
otherwise acquires Securities, of the aggregate principal amount of such
Securities so repurchased or otherwise acquired.
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Section 3.15. Deposits of Monies.
Prior to 10:30 a.m. New York City time on each Interest Payment
Date, maturity date and Change of Control Purchase Date, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, maturity date
and Change of Control Purchase Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, maturity date and Change of Control Purchase Date, as the case may
be.
Section 3.16. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit B.
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 Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 3.17. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depositary is not appointed
by the Company within 90 days of such notice or
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(ii) an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount at maturity of the Global Security in an amount equal to the
principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Securities of like tenor and principal amount
of authorized denominations.
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global Securities
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 Securities, an equal aggregate principal amount at
maturity of Physical Securities of like tenor of authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to
subparagraphs (b) or (c) of this Section 3.16 shall, except as otherwise
provided by paragraphs (a)(l)(x) and (c) of Section 3.17, bear the legend
regarding transfer restrictions applicable to the Physical Securities set forth
in Exhibit A-1.
(f) The Holder of any 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 which a Holder is
entitled to take under this Indenture or the Securities.
Section 3.17. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Security constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
non-U.S. person:
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(1) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears the
Private Placement Legend, if (x) the requested transfer is not prior to
the date which is two years (or such shorter period as may be prescribed
by Rule 144(k) under the Securities Act or any successor provision
thereunder) after the later of the original Issue Date of such Security
(or of any Predecessor Security) or the last day on which the Company or
any Affiliate of the Company was the owner of such Security or any
Predecessor Security or (y) (1) in the case of a transfer to a person
purporting to be an Institutional Accredited Investor which is not a QIB
(excluding non-U.S. persons), the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit C hereto or
(2) in the case of a transfer to a person purporting to be a non-U.S.
person, the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto; and
(2) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Security, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (1) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures;
whereupon (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 at maturity of a Global Security in an amount
equal to the principal amount at maturity of the beneficial interest in a Global
Security to be transferred, and (b) the Company shall execute and the Trustee
shall authenticate and deliver one or more Physical Securities of like tenor and
principal amount of authorized denominations.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a person purporting to be a QIB (excluding transfers to
non-U.S. persons):
(1) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on the form of Security stating, or has otherwise advised the Company and
the Registrar in writing, that the transfer has been made in com-
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pliance with the exemption from registration under the Securities Act
provided under 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 Registrar in writing, that such transferee represents and
warrants 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
(2) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the Global Security, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect
on the Security Register the date and an increase in the principal amount
at maturity of the Global Security in an amount equal to the principal
amount at maturity of the Physical Securities to be transferred, and the
Trustee shall cancel the Physical Securities so transferred.
(c) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the 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, the Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i) the circumstances
contemplated by paragraph (a)(l)(x) of this Section 3.17 exist, (ii) there is
delivered to the Registrar an Opinion of Counsel satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related restrictions
on transfer are required in order to maintain compliance with the provisions of
the Securities Act or (iii) such Security has been sold pursuant to an effective
registration statement under the Securities Act.
(d) Other Transfers. If a Holder proposes to transfer a Security
constituting a Restricted Security pursuant to
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any exemption from the registration requirements of the Securities Act other
than as provided for by Section 3.17(a) and (b), the Registrar shall only
register such transfer or exchange if such transferor delivers an Opinion of
Counsel satisfactory to the Company and the Registrar that such transfer is in
compliance with the Securities Act and the terms of this Indenture; provided
that the Company may, based upon the opinion of its counsel, instruct the
Registrar by a Company Order not to register such transfer in any case where the
proposed transferee is not a QIB, non-U.S. person or Institutional Accredited
Investor.
(e) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a 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 Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 3.16 or this Section 3.17
for a period of two years at which time such letters, notices and other written
communications shall be delivered to the Company. The Company shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any time during normal business hours upon the giving of
reasonable prior written notice to the Registrar.
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. 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 4.02 or Section
4.03 be applied to all of the Outstanding Securities (the "Defeased
Securities"), upon compliance with the conditions set forth below in this
Article Four.
Section 4.02. Defeasance and Discharge.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.02, the Company 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 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 4.05 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 Company 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 4.04 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
3.04, 3.05, 3.06, 10.02 and 10.03, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including, without limitation, the
Trustee's rights under Section 6.07 and (d) this Article Four. Subject to
compliance with this Article Four, the Company may exercise its option under
this Section 4.02 notwithstanding the prior exercise of its option under Section
4.03 with respect to the Securities.
Section 4.03. Covenant Defeasance.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.03, the Company shall be released from its
obligations under any covenant or provision contained in Sections 10.06 through
10.15 and the provisions of Articles Eight shall not apply, 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 not to be "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Defeased
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
Article, whether directly or indirectly, by reason of any reference elsewhere
herein to any such Section or Article or by
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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 5.01(c) or (d), but, except as
specified above, the remainder of this Indenture and such Defeased Securities
shall be unaffected thereby.
Section 4.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 4.02 or Section 4.03 to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Four applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a)
U.S. dollars in an amount, or (b) U.S. Government Obligations which
through the scheduled payment of principal, premium, if any, 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 any such case, sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of, premium, if any, and
interest on the Defeased Securities upon redemption or at the Stated
Maturity of such principal or installment of principal, premium, if any,
or interest; provided, however, that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Securities;
(2) No Default shall have occurred and be continuing on the date of
such deposit or, insofar as Sections 5.01(h), (i) or (j) are concerned, at
any time during the period ending on the ninety-first day after the date
of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
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(3) Neither the Company nor any Subsidiary of the Company is an
"insolvent person" within the meaning of any applicable Bankruptcy Law on
the date of such deposit or at any time during the period ending on the
ninety-first day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);
(4) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities to have a conflicting interest in violation of
Section 6.08 and for purposes of the Trust Indenture Act with respect to
any securities of the Company;
(5) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by
which it is bound;
(6) In the case of an election under Section 4.02, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred;
(7) In the case of an election under Section 4.03, the Company shall
have delivered to the Trustee an Opinion of Counsel 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;
(8) The Company shall have delivered to the Trustee, an Opinion of
Counsel to the effect that immediately following the ninety-first day
after the deposit, the trust funds established pursuant to this Article
will not be
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subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under
any applicable U.S. Federal or state law;
(9) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election under Section 4.02 or 4.03 was not made by the Company with the
intent of preferring the Holders over the other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (i) all
conditions precedent (other than conditions requiring the passage of time)
provided for relating to either the defeasance under Section 4.02 or the
covenant defeasance under Section 4.03 (as the case may be) have been
complied with as contemplated by this Section 4.04 and (ii) if any other
Indebtedness of the Company shall then be outstanding or committed, such
defeasance or covenant defeasance will not violate the provisions of the
agreements or instruments evidencing such Indebtedness.
Opinions required to be delivered under this Section may have such
qualifications as are customary for opinions of the type required and acceptable
to the Trustee.
Section 4.05. Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions.
Subject to the proviso of the last paragraph of Section 10.03, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 4.05, the "Trustee") pursuant to Section 4.04 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 (other than the Company) 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.
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The Company shall pay and indemnify the Trustee and hold it harmless
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 4.04 or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 4.04 which, in the opinion of an internationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to a Responsible Officer of the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
defeasance or covenant defeasance.
Section 4.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 4.02 or 4.03, 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
obligations of the Company under this Indenture, the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 4.02 or
4.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money and U.S. Government Obligations in accordance
with Section 4.02 or 4.03, as the case may be; provided, however, that if the
Company makes any payment of principal, premium, if any, or interest on any
Security following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money and U.S. Government Obligations held by the Trustee or
Paying Agent.
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ARTICLE FIVE
REMEDIES
Section 5.01. 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
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) default in the payment of any interest on the Securities when it
becomes due and payable, and continuance of any such default for a period
of 30 days; or
(b) default in the payment of the principal of, or premium, if any,
on the Securities issued thereunder, when due, at maturity, upon
redemption, pursuant to an offer to purchase required under this Indenture
pursuant to the Change of Control provisions or otherwise, by acceleration
or otherwise; or
(c) the Company fails to comply with any of its obligations
described in Article Eight or Section 10.10; or
(d) the Company fails to perform or observe any other term, covenant
or agreement contained in the Securities or this Indenture (other than a
default specified in (a), (b) or (c) above) for a period of 45 days after
written notice of such failure requiring the Company to remedy the same
shall have been given (x) to the Company by the Trustee or (y) to the
Company and the Trustee by the Holders of 25% in aggregate principal
amount of the Securities then outstanding; or
(e) default or defaults under one or more agreements, indentures or
instruments under which the Company or any Restricted Subsidiary then has
outstanding Indebtedness in excess of $25 million individually or in the
aggregate and either (a) such Indebtedness is already due and payable in
full or (b) such default or defaults results in the acceleration of the
maturity of such Indebtedness; or
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(f) one or more judgments, orders or decrees for the payment of
money in excess of $25 million (to the extent not covered by insurance),
either individually or, in an aggregate amount, shall be entered against
the Company or any Restricted Subsidiary or any of their respective
properties and shall not be paid, discharged or fully bonded and there
shall have been a period of 60 days during which a stay of enforcement of
such judgment or order, by reason of pending appeal or otherwise, shall
not be in effect; or
(g) the Company or any Significant Subsidiary of the Company
pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the making of a Bankruptcy Order in an
involuntary case or proceeding or the commencement of any case
against it;
(iii) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) files an answer or consent seeking reorganization or
relief;
(vi) shall admit in writing its inability to pay its debts
generally; or
(vii) consents to the filing of a petition in bankruptcy; or
(h) a court of competent jurisdiction in any involuntary case or
proceeding enters a Bankruptcy Order against the Company or any
Significant Subsidiary, and such Bankruptcy Order remains unstayed and in
effect for 60 consecutive days; or
(i) a Custodian shall be appointed out of court with respect to the
Company or any Significant Subsidiary or with respect to all or any
substantial part of the assets or properties of the Company or any
Subsidiary.
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Section 5.02. Acceleration of Maturity; Rescission and Annulment.
If (x) an Event of Default (other than an Event of Default specified
in Section 5.01(g), (h) or (i) with respect to the Company) occurs and is
continuing then the Holders of at least 25% in aggregate principal amount of the
Securities outstanding may, by written notice, and the Security Trustee upon the
request of the Holders of not less than 25% in aggregate principal amount of the
Securities outstanding shall, declare the principal of, premium, if any, and
accrued interest on, all the Securities to be due and payable immediately. Upon
any such declaration such amounts shall become due and payable immediately. If
an Event of Default specified in clause (g), (h) or (i) above with respect to
the Company occurs and is continuing, then the principal of, premium, if any,
and accrued interest on, all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder of the Securities. In the event of an acceleration
because an Event of Default set forth in clause (e) above has occurred and is
continuing, such acceleration shall be automatically rescinded and annulled if
the event of default triggering such Event of Default pursuant to clause (e)
shall be remedied, cured by the Company or such Restricted Subsidiary or waived
by the holders of the relevant Indebtedness within 60 days after the
acceleration with respect thereto.
After a declaration of acceleration, the Holders of a majority in
aggregate principal amount of the issue outstanding Securities may, by notice to
the Trustee, rescind such declaration of acceleration if all existing Events of
Default have been cured or waived, other than nonpayment of principal of,
premium, if any, and accrued interest on the Securities, that has become due
solely as a result of the acceleration thereof, and if the rescission of
acceleration would not conflict with any judgment or decree. Past defaults under
this Indenture (except a default in the payment of the principal of, premium, if
any, or interest on any Security issued thereunder or in respect of a covenant
or a provision which cannot be modified or amended without the consent of all
holders of such Securities) may be waived by the Holders of a majority in
aggregate principal amount of the outstanding Securities.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if an Event of Default specified in
Section 5.01(a) or 5.01(b) shall have occurred and be continuing, the Company
will, jointly and severally, upon demand of the Trustee, pay to the Trustee, for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal, premium, if any, and interest, with
interest upon the overdue principal, premium, if any, and, to the extent that
payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate then borne by the Securities; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company, fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may,
but is not obligated under this paragraph to, at the expense of the Company
institute a judicial proceeding for the collection of the sums so due and unpaid
and may, but is not obligated under this paragraph to, prosecute such proceeding
to judgment or final decree, and may, but is not obligated under this paragraph
to, 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, but is not obligated under this paragraph to, (i) 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 contained in this Indenture or
in aid of the exercise of any power granted herein or (ii) proceed to protect
and enforce any other proper remedy. No recovery of any such judgment upon any
property of the Company shall affect or impair any rights, powers or remedies of
the Trustee or the Holders.
Section 5.04. Trustee May File Proofs of Claims.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement,
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adjustment, composition or other judicial proceeding relative to the Company or
any other obligor upon the Securities, including the property of the Company or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, fees, 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;
and any Custodian, in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 5.05. 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 produc-
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tion 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, fees, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
Section 5.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium, if
any, or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
First: to the Trustee for amounts due under Section 6.07;
Second: to Holders for interest accrued on the Securities, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for interest;
Third: to Holders for principal and premium, if any, amounts owing
under the Securities, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal
and premium, if any; and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to this
Section 5.06.
Section 5.07. Limitation on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
the Holders of at least 25% in aggregate principal amount of the outstanding
Securities have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as Trustee,
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such Trustee has failed to institute such proceeding within 60 days after
receipt of such notice and such Trustee has not within such 60-day period
received directions inconsistent with such written request by holders of a
majority in aggregate principal amount of the issue of Securities. Such
limitations do not apply, however, to a suit instituted by a Holder of a
Security for the enforcement of the payment of the principal of, premium, if
any, or accrued interest on, such Security on or after the respective due dates
expressed in such Security.
During the existence of an Event of Default under this Indenture,
the Trustee is required to exercise such rights and powers vested in it under
this Indenture and use the same degree of care and skill in its exercise thereof
as a prudent Person would exercise under the circumstances in the conduct of
such Person's own affairs. Subject to the provisions of this Indenture relating
to the duties of the Trustee, in case an Event of Default shall occur and be
continuing, the Trustee is not under any obligation to exercise any of its
rights or powers under this Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to such Trustee security or
indemnity satisfactory to it. Subject to certain provisions of this Indenture
concerning the rights of the Trustee, the Holders of a majority in aggregate
principal amount of the applicable issue of outstanding Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee under this Indenture, or exercising any trust,
or power conferred on the Trustee.
It is understood and intended that no one or more Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security 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 or any Security,
except in the manner provided in this Indenture and for the equal and ratable
benefit of all the Holders.
Section 5.08. Unconditional Right of Holders To Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive cash payment of the principal of, premium, if any, and (subject to
Section 3.07 hereof) interest on such Security on the respective Stated
Ma-
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turities expressed in such Security (or, in the case of redemption, on the
respective Redemption Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder.
Section 5.09. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Security and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as provided in Section 3.06, 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 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five 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 5.12. Control by Majority.
The Holders of 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
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trust or power conferred on the Trustee, provided, however, that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or any Security or expose the Trustee to personal
liability; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.13. 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
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Section 5.14. 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 and
expenses, 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
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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 respective Redemption Dates).
Section 5.15. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter in force,
which would prohibit or forgive the Company 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 the Company (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 5.16. Unconditional Right of Holders To Institute Certain
Suits.
Notwithstanding any other provision in this Indenture and any other
provision of any Security, the right of any Holder of any Security to receive
payment of the principal of, premium, if any, and interest on such Security on
or after the respective Stated Maturities (or the respective Redemption Dates,
in the case of redemption) expressed in such Security, or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
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ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by provision hereof
are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts
stated therein).
(b) In case 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, 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.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or
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affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.01.
Section 6.02. Notice of Defaults.
Within 60 days after the occurrence of any Default, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Security Register, notice of such Default hereunder actually known to a
Responsible Officer of the Trustee, unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium, if any, or interest on any Security, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders.
Section 6.03. Certain Rights of Trustee.
Subject to Section 6.01 hereof and the provisions of Section 315 of
the Trust Indenture Act:
(a) the Trustee may conclusively rely and shall be fully 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 (whether in its original or facsimile form)
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 of the Company may be sufficiently
evidenced by a Board Resolution thereof;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon
in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall
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have offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by the
Trustee in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture other
than any liabilities arising out of its own negligence;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, security, other
evidence of indebtedness or other paper or document unless requested in
writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Securities then Outstanding; provided, however,
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require indemnity satisfactory to it against such expenses
or liabilities as a condition to proceeding; the reasonable expenses of
every such investigation shall be paid by the Company or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Company upon
demand; provided, further, the Trustee in its discretion may make such
further inquiry or investigation into such facts or matters as it may deem
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole
cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation; and
(g) 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.
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Section 6.04. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility and Qualification on Form T-1, if any, to be
supplied to the Company are true and accurate subject to the qualifications set
forth therein. The Trustee shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
Section 6.05. Trustee and Agents May Hold Securities; Collections;
Etc.
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Sections 6.08 and 6.13 hereof and Sections 310 and 311 of the Trust Indenture
Act, may otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
the Trustee, Paying Agent, Security Registrar or such other agent.
Section 6.06. 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 herein
or by law. The Trustee shall not be under any liability for interest on any
moneys received by it hereunder.
Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim.
The Company covenants and agrees: (a) to pay to the Trustee from
time to time, and the Trustee shall be entitled to, compensation for all
services rendered by it hereunder
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(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) as the Company and the Trustee
shall, from time to time, agree in writing; (b) to reimburse the Trustee and
each predecessor Trustee upon its request for all reasonable expenses, fees,
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, fees, 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; and (c) to indemnify the Trustee and each predecessor Trustee for,
and to hold it harmless against, any and all loss, liability, claim, damage, or
expense (including taxes other than taxes based upon the income of the Trustee)
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 6.07. 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, fees,
disbursements and advances shall constitute an additional obligation hereunder
and shall survive the satisfaction and discharge of this Indenture. To secure
the obligations of the Company to the Trustee under this Section 6.07, the
Trustee shall have a prior Lien upon all property and funds held or collected by
the Trustee as such, except funds and property paid by the Company held in trust
for the benefit of the Holders of Securities.
Section 6.08. Conflicting Interests.
The Trustee shall be subject to and comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 6.09. 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 Sections 310(a)(1) and (2)
and which shall have a combined capital and surplus of at least $50,000,000, and
have a Corporate Trust Office in the Borough of Manhattan in The City of New
York, State of New York. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of any Federal, state,
territorial or District of Columbia supervising or examining authority, then for
the pur
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poses 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 6.10. 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 6.11.
(b) The Trustee, or any trustee or trustees hereinafter appointed,
may at any time resign by giving written notice thereof to the Company at
least 20 Business Days prior to the date of such proposed resignation. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument executed by authority of the Board of
Directors of the Company, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor Trustee. If an instrument of acceptance by
a successor Trustee shall not have been delivered to the Trustee within 20
Business 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 a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act in accordance with Section 6.08 hereof
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
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(2) the Trustee shall cease to be eligible under Section 6.09 hereof
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 or
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 5.14, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution of its Board of Directors, shall promptly appoint
a successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, 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, the Holder of any Security who has been a bona fide
Holder for at least six months may, subject to Section 5.14, 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.
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Section 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Company or
the successor Trustee, upon payment of any and all amounts due it pursuant to
Section 6.07, such retiring Trustee shall duly assign, transfer and deliver to
the successor Trustee all moneys and property at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
Trustee all the rights, powers, duties and obligations of the retiring Trustee.
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 to secure any amounts then due it pursuant to the provisions of
Section 6.07.
No successor Trustee with respect to the Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
Upon acceptance of appointment by any successor Trustee as provided
in this Section 6.11, the successor 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
6.10. 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.
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Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or amalgamated, or any corporation resulting
from any merger, conversion, amalgamation 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 this Article to serve as Trustee hereunder.
In case at the time such successor to the Trustee under this Section
6.12 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
under this Section 6.12 may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor Trustee; and in all
such cases such certificate shall have the full force which it is anywhere in
the Securities or in this Indenture provided that the certificate of the Trustee
shall have been authenticated.
Section 6.13. Trustee's Application for Instructions from the
Company
Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
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in response to such application concerning the action to be taken or omitted.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish
Trustee Names and Addresses of Holders.
(a) The Trustee shall preserve the names and addresses of the
Securityholders and otherwise comply with Section 312(a) of the Trust Indenture
Act. If the Trustee is not the Registrar, the Company shall furnish or cause the
Registrar to furnish to the Trustee before each Interest Payment Date, and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Securityholders. Neither the Company nor the Trustee shall be under any
responsibility with regard to the accuracy of such list.
(b) The Company will furnish or cause to be furnished to the
Trustee:
(i) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished pursuant to this Subsection 7.01(b).
Section 7.02. Communications of Holders.
Holders may communicate with other Holders with respect to their
rights under this Indenture or under the Securities pursuant to Section 312(b)
of the Trust Indenture Act. The Company and the Trustee and any and all other
persons bene-
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fited by this Indenture shall have the protection afforded by Section 312(c) of
the Trust Indenture Act.
Section 7.03. Reports by Trustee.
Within 60 days after June 1 of each year commencing with the first
June 1 following the date of this Indenture, the Trustee shall mail to all
Holders, as their names and addresses appear in the Security Register, a brief
report dated as of such June 1, in accordance with, and to the extent required
under Section 313 of the Trust Indenture Act. At the time of its mailing to
Holders, a copy of each such report shall be filed by the Trustee with the
Company, the Commission and with each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange or delisted therefrom.
Section 7.04. Reports by Company.
The Company will file with each Trustee, within 15 days after filing
with the Commission, copies of the annual and quarterly reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) which
the Company files with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. If the Company is no longer subject to these periodic reporting
requirements of the Exchange Act, it will nonetheless continue to file reports
with the Trustee as if it were subject to such periodic reporting requirements.
Regardless of whether the Company is required to furnish such reports to its
stockholders pursuant to the Exchange Act, the Company shall cause such reports
containing financial information to be mailed to the Holders within 15 days
after filing such report with the Commission. Such financial information shall
include annual reports containing consolidated financial statements and notes
thereto, together with an opinion thereon expressed by an independent public
accounting firm, management's discussion and analysis of financial condition and
results of operations as well as quarterly reports containing unaudited
condensed consolidated financial statements for the first three quarters of each
fiscal year.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance
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with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officer's Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 8.01. Company May Consolidate, etc., Only on Certain Terms.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, consolidate with or merge with or into any other Person or
sell, assign, convey, lease or transfer all or substantially all of its
properties and assets in a single transaction or through a series of
transactions, if such transaction or series of transactions would result in a
sale, conveyance, lease, transfer or other disposition of all or substantially
all of the properties and assets of the Company and the Restricted Subsidiaries,
taken as a whole, unless: (i) the resulting, surviving or transferee Person (the
"Surviving entity") shall be a corporation organized and existing under the laws
of the United States or any State thereof or the District of Columbia; (ii) the
surviving entity shall expressly assume, by supplemental indenture executed and
delivered to the Trustee, in form and substance reasonably satisfactory to the
Trustee, all of the obligations of the Company under this Indenture and the
Securities and the Registration Rights Agreements; (iii) immediately after
giving effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, giving effect to any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such transaction
or series of transactions), no Default shall have occurred and be continuing
under this Indenture; (iv) the Company or the surviving entity (if the
transaction or series of transactions involves the Company) shall have delivered
to the Trustee under this Indenture an Officer's Certificate and an Opinion of
Counsel, stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such transaction
or series of transactions, each such supplemental indenture complies with this
covenant and that all conditions precedent in this Indenture relating to the
transaction or series of transactions have been satisfied; and (v) the Company
or the surviving entity (if the transaction or series of transactions involves
the Company) shall immediately after giving effect to such transaction or se-
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ries of transactions on pro forma basis (including, without limitation, giving
effect to any Indebtedness incurred or anticipated to be incurred in connection
with or in respect of the transaction or series of transactions) be permitted to
incur $1.00 of additional Indebtedness under clause (j) of Section 10.11 and
other applicable restrictions on additional Indebtedness.
Section 8.02. Successor Substituted.
Upon any consolidation or merger of the Company or any transfer of
all or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the successor
corporation formed by such a consolidation or into which the Company is merged
or to which such transfer is made, shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture and the
Securities and the Registration Rights Agreements, with the same effect as if
such successor corporation had been named as the Company therein; and
thereafter, except in the case of (a) a lease or (b) any sale, assignment,
conveyance, transfer, lease or other disposition to a Restricted Subsidiary of
the Company, the Company shall be discharged from all obligations and covenants
under this Indenture and the Securities.
For all purposes of this Indenture and the Securities (including the
provision of this Section 8.02 and the covenants described in Sections 10.11 and
10.13), Subsidiaries of any Surviving Entity shall, upon such transaction or
series of related transactions, become Restricted Subsidiaries unless and until
designated as Unrestricted Subsidiaries pursuant to and in accordance with
Section 10.14.
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form and substance
satisfactory to the Trustee, or waiver for any of the following purposes:
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(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 herein conferred upon the
Company, as applicable, herein, in the Securities, as the case may be;
(c) to cure any ambiguity, to correct or supplement any provision
herein, in the Securities which may be defective or inconsistent with any
other provision herein or to make any other provisions with respect to
matters or questions arising under this Indenture and the Securities;
provided, however, that, in each case, such provisions shall not
materially adversely affect the interests of the Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 9.05 hereof or otherwise;
(e) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder; or
(f) to mortgage, pledge, hypothecate or grant a security interest in
any property or assets in favor of the Trustee for the benefit of the
Holders as security for the payment and performance of the Indenture
Obligations;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such change, agreement or waiver does not materially
adversely affect the interests or legal rights of any Holders.
Section 9.02. Supplemental Indentures, Agreements and Waivers with
Consent of Holders.
With the written consent of the Holders of not less than a majority
in aggregate principal amount of the Outstanding Securities delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto
satisfactory to the Trustee for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
the Securities, or of modifying in any manner the rights of the Holders under
this Indenture or
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the Securities. The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities may waive compliance by the Company with
any provision of this Indenture or the Securities. However, no such supplemental
indenture, agreement or instrument, including any waiver pursuant to Section
5.13, shall, without the written consent or waiver of the Holder of each
Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, alter the redemption provisions of the Securities or
this Indenture, or change the coin or currency in which any Security or
any premium or the accrued interest thereon is payable, or impair the
right to institute suit for the enforcement of any payment after the
Stated Maturity thereof (or, in the case of a purchase pursuant to Section
10.10 of this Indenture, on or after the applicable purchase date, as the
case may be);
(b) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any 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) or consent provided for in this
Indenture or with respect to any Security;
(c) modify any of the provisions of this Section 9.02 or Sections
5.13 and 5.16, except to increase any such percentage, if applicable
thereto, 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;
(d) consent to the assignment or transfer by the Company of any of
their rights and obligations under this Indenture, the Securities;
(e) following either (x) the mailing of a notice of a Change of
Control Offer or (y) the failure to mail such notice prior to the date set
forth in the first paragraph of Section 10.10, in either case, following
satisfaction of the condition precedent to the mailing of such notice as
set forth in Section 10.10, alter the Company's obligation to purchase
Securities as a result thereof in accor
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dance with this Indenture or waive any default in the performance thereof;
(f) adversely affect the ranking of the Securities in a manner
adverse to any Holder;
(g) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities; or
(h) change the currency in which such Securities or any premium or
the interest thereon is payable.
Upon the written request of the Company accompanied by a copy of a
Board Resolution authorizing the execution of any such supplemental indenture or
other agreement, instrument or waiver, 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 or other agreement,
instrument or waiver.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture or other
agreement, instrument or waiver, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures, Agreements and
Waivers.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01 hereof) shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate from each obligor under the Securities entering into
such supplemental indenture, agreement, instrument or waiver, each stating that
the execution of such supplemental indenture, agreement, instrument or waiver
(a) is authorized or permitted by this Indenture and (b) does not violate the
provisions of any agreement or instrument evidencing any other Indebtedness of
the Company or any Subsidiary of the Company. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture, agreement, instrument
or waiver which affects the Trustee's own rights, duties or immunities under
this Indenture, the Securities or otherwise.
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Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture and/or the Securities shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture
and/or the Securities, as the case may be, for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
Section 9.05. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors of the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee upon a Company Order in exchange for Outstanding Securities.
Section 9.07. Record Date.
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. No such consent shall be valid or effective for more
than 90 days after such record date.
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Section 9.08. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security 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, even if a notation of the consent is not made
on any Security. However, any such Holder, or subsequent Holder, may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
An amendment or waiver shall become effective in accordance with its terms and
thereafter bind every Holder.
ARTICLE TEN
COVENANTS
Section 10.01. 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 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan in The City of
New York, State 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 or exchange 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 its Corporate Trust Office will 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 of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
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The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York, State 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, State
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 other office or agency.
Section 10.03. Money for Security Payments To Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of, premium, if any, or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Holders entitled thereto a sum sufficient to pay the principal, premium,
if any, or interest so becoming due until such sums shall be paid to such
persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, on
or before each due date of the principal of, premium, if any, or interest on,
any Securities, deposit with a Paying Agent a sum in same day funds sufficient
to pay the principal, premium, if any, or interest so becoming due, such sum to
be held in trust for the benefit of the Holders entitled to such principal,
premium or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 10.03, 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
Holders entitled thereto until such sums shall be paid to such Holders or
otherwise disposed of as herein provided;
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(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 of, premium, if any, or interest on the Securities;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and
liabilities of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal, premium, if any, or interest has become due and payable shall be
paid to the Company upon receipt of a Company Request therefor, or (if then held
by the Company) will be discharged from such trust; and the Holder of such
Security will 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, will thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and the
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.
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Section 10.04. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory), licenses and franchises of the
Company and each of the Restricted Subsidiaries; provided, however, that the
Company will not be required to preserve any such right, license or franchise 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
the Restricted Subsidiaries as a whole and that the loss thereof is not adverse
in any material respect to the Holders; provided, further, that the foregoing
will not prohibit a sale, transfer or conveyance of a Subsidiary of the Company
or any of its assets in compliance with the terms of this Indenture.
Section 10.05. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed (i) upon the Company or any of its
Subsidiaries or (ii) upon the income, profits or property of the Company or any
of the Restricted Subsidiaries and (b) all material lawful claims for labor,
materials and supplies, which, if unpaid, could reasonably be expected to become
a Lien upon the property of the Company or any of the Restricted Subsidiaries;
provided, however, that the Company will not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicable or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted.
Section 10.06. Maintenance of Properties.
The Company will cause all material properties owned by the Company
or any of the Restricted Subsidiaries or used or held for use in the conduct of
their respective businesses to be maintained and kept in good condition, repair
and working order 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 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 10.06
will prevent the Company from discontinuing the maintenance of any of such
properties if such discontinuance
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is, in the judgment of the Company, desirable in the conduct of its business or
the business of any of the Restricted Subsidiaries and is not disadvantageous in
any material respect to the Holders.
Section 10.07. Insurance.
The Company will at all times keep all of its and the Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company in good faith to be financially sound and responsible,
against loss or damage to the extent that property of similar character is
usually and customarily so insured by corporations similarly situated and owning
like properties.
Section 10.08. Books and Records.
The Company will, and will cause each of the Restricted Subsidiaries
to, keep proper books of record and account, in which full and correct entries
will be made of all financial transactions and the assets and business of the
Company and each Restricted Subsidiary of the Company in accordance with GAAP.
Section 10.09. Provision of Financial Statements.
Whether or not the Company has a class of securities registered
under the Exchange Act, the Company will supply, at their own expense, to each
Holder of the Securities and file with the Trustee within fifteen days after the
Company is required to file the same with the Commission, copies of the annual
reports and quarterly reports and of the information, documents and other
reports which the Company may be required to file with the Commission pursuant
to Section 13(a), 13(c) or 15(d) of the Exchange Act. The Company will also
comply with the other provisions of Section 314(a) of the Trust Indenture Act.
Section 10.10. Change of Control Triggering Event.
In the event of a Change of Control Triggering Event (the date of
such occurrence being the "Change of Control Date"), the Company will notify the
Holders in writing of such occurrence and will make an offer to purchase (the
"Change of Control Offer"), on a business day (the "Change of Control Payment
Date") not later than 90 days following the Change of Control Date, all
Securities then outstanding at a purchase price equal to 101% of the principal
amount thereof plus accrued and
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unpaid interest, if any, to the Change of Control Payment Date. Notice of a
Change of Control Offer shall be mailed by the Company to the Holders not less
than 30 days nor more than 45 days before the Change of Control Payment Date.
The Change of Control Offer is required to remain open for at least 20 business
days and until the close of business on the Change of Control Payment Date.
The notice, which shall govern the terms of the Change of Control
Offer, shall include such disclosures as are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to this
Section 10.10 and that all Securities tendered into the Change of Control
Offer will be accepted for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Security, the Change of Control Purchase Date and the date
on which the Change of Control Offer expires;
(c) that any Security not tendered for payment will continue to
accrue interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Security accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date;
(e) that Holders electing to have Securities purchased pursuant to a
Change of Control Offer will be required to surrender their Securities to
the Paying Agent at the address specified in the notice prior to 5:00
p.m., New York City time, on the Change of Control Purchase Date and must
complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(f) that Holders of Securities will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Change of Control Purchase Date, a facsimile
transmission or letter setting forth the name of the Holders, the
principal amount of Securities the Holders delivered for purchase, the
Security certificate number (if any) and a statement
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that such Holder is withdrawing his election to have such Securities
purchased;
(g) that Holders whose Securities are purchased only in part will be
issued Securities of like tenor equal in principal amount to the
unpurchased portion of the Securities surrendered;
(h) the instructions that Holders must follow in order to tender
their Securities; and
(i) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the
Commission pursuant to the Exchange Act (or, if the Company is not
required to file any such reports with the Commission, the comparable
reports prepared pursuant to Section 10.09), a description of material
developments in the Company's business, information with respect to pro
forma historical financial information after giving effect to such Change
of Control and such other information concerning the circumstances and
relevant facts regarding such Change of Control and Change of Control
Offer as would, in the good faith judgment of the Company, be material to
a Holder of Securities in connection with the decision of such Holder as
to whether or not it should tender Securities pursuant to the Change of
Control Offer.
On the Change of Control Purchase Date, the Company will (i) accept
for payment Securities or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money, in immediately
available funds, sufficient to pay the purchase price of all Securities or
portions thereof so tendered and accepted and (iii) deliver to the Trustee the
Securities so accepted together with an Officers' Certificate setting forth the
Securities or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent will promptly mail or deliver to the Holders of
Securities so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security of like tenor equal in principal amount to any unpurchased portion of
the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company will
publicly announce the results of the Change of Control Offer not later than the
first Business Day following the Change of Control Purchase Date.
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The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act, and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 10.10, the
Company will comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 10.10 by
virtue thereof.
Section 10.11. Limitation on Additional Indebtedness.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, incur any Indebtedness (including any Acquired Indebtedness)
except for:
(a) the Securities;
(b) Indebtedness (including letters of credit) of the Company and
the Restricted Subsidiaries under the Senior Credit Facility in an
aggregate principal amount not to exceed $800 million;
(c) Indebtedness of the Company and the Restricted Subsidiaries
incurred pursuant to Interest Rate Protection Obligations and foreign
exchange contracts, currency swaps or similar agreements;
(d) Indebtedness between and among the Company and the Restricted
Subsidiaries or between and among any of the Restricted Subsidiaries;
(e) Capitalized Lease Obligations and Purchase Money Indebtedness of
the Company and the Restricted Subsidiaries, in each case with respect to
the acquisition after the Issue Date of Productive Assets;
(f) Indebtedness of the Company and the Restricted Subsidiaries
resulting from the endorsement of negotiable instruments in the ordinary
course of business;
(g) replacements, renewals, refinancings and extensions of
Indebtedness outstanding on the Issue Date (other than any Indebtedness to
be repaid or retired with the net proceeds from the sale of the
Securities) and Indebtedness incurred or permitted in compliance with
clauses (a), (e) and (i) of this Section 10.11; provided that the
principal amount of Indebtedness incurred pursuant to this
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clause (g) (or, if such Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of such
Indebtedness) shall not exceed the sum of the principal amount of
Indebtedness so refinanced (or, if such Indebtedness provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof, the original issue
price of such Indebtedness, plus any accreted value attributable thereto
since the original issuance of such Indebtedness), plus the amount of any
premium required to be paid in connection with such replacement, renewal,
refinancing or extension pursuant to the terms of such Indebtedness or the
amount of any premium reasonably determined by the Company or the
Restricted Subsidiary, as applicable, as necessary to accomplish such
replacement, renewal, refinancing or extension by means of a tender offer
or privately negotiated purchase, plus the amount of fees and expenses in
connection therewith;
(h) unsecured Indebtedness of the Company and the Restricted
Subsidiaries not exceeding $100 million in aggregate principal amount
outstanding at any time;
(i) Indebtedness of the Company and the Restricted Subsidiaries
secured by a Lien on accounts receivable of the Company and the Restricted
Subsidiaries in an aggregate principal amount not to exceed 85% of the
face amount of outstanding accounts receivable of the Company and such
Restricted Subsidiaries; and
(j) other Indebtedness of the Company and the Restricted
Subsidiaries, if at the time of and after giving pro forma effect to the
incurrence of such Indebtedness (including the application of the proceeds
thereof) and any Asset Acquisitions and any Asset Sales that occurred
during the period beginning four full fiscal quarters immediately prior to
such incurrence as though such events occurred on the first day of such
period, the Consolidated EBITDA Coverage Ratio for such four fiscal
quarter period of the Company is equal to or greater than 1.75:1.0.
For purposes of determining compliance with this Section 10.11 in
the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness permitted by this Section 10.11, the Company in its
sole discretion shall classify such item of Indebtedness and only be required
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to include the amount of such Indebtedness as one of such types.
Section 10.12. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, within 95 days after
the end of each fiscal year of the Company ending after the date hereof, a
written statement signed by the chairman or a chief executive officer, the
principal financial officer or principal accounting officer of the Company,
stating (i) that a review of the activities of the Company during the preceding
fiscal year has been made under the supervision of the signing officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and (ii) that, to the knowledge
of each officer signing such certificate, the Company has kept, observed,
performed and fulfilled each and every covenant and condition contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions, conditions and covenants hereof (or, if a Default shall have
occurred, describing all such Defaults of which such officers may have
knowledge, their status and what action the Company is taking or proposes to
take with respect thereto).
(b) When any Default has occurred and is continuing, or if the
Trustee or any Holder or the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Restricted Subsidiary gives any notice or
takes any other action with respect to a claimed default (other than with
respect to Indebtedness (other than Indebtedness evidenced by the Securities) in
the principal amount of less than $5,000,000), the Company will promptly notify
a Responsible Officer of the Trustee of such Default, notice or action and will
deliver to the Trustee by registered or certified mail or by telegram, or
facsimile transmission followed by hard copy by registered or certified mail an
Officers' Certificate specifying such event, notice or other action within five
Business Days after the Company becomes aware of such occurrence and what action
the Company is taking or proposes to take with respect thereto.
Section 10.13. Limitation on Liens.
The Company and the Restricted Subsidiaries will not, directly or
indirectly, incur any consensual Lien to secure Indebtedness, other than
Permitted Liens, upon any of their property or assets owned or acquired on or
after the Issue Date unless (i) where such Lien secures Indebtedness ranking
pari passu with the applicable Securities, excluding Indebtedness under the
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Senior Credit Facility, all payments due under this Indenture and the Securities
are secured on an equal and ratable basis with the obligations so secured until
such time as such obligation is no longer secured by a Lien, or (ii) where such
Lien secures Subordinated Indebtedness, the Securities are secured by a Lien on
such property or assets that is senior in priority to the Lien securing such
Subordinated Indebtedness. Any Lien which secures the Securities shall
automatically and unconditionally be released upon the release or discharge of
the Lien which resulted in the creation of such Lien with respect to the
Securities, except a discharge or release by or as a result of foreclosure on
the subject collateral.
Section 10.14. Limitation on Designations of Unrestricted
Subsidiaries.
The Company may designate after the Issue Date any Subsidiary as an
"Unrestricted Subsidiary" under this Indenture (a "Designation") only if:
(a) no Default shall have occurred and be continuing at the time of
or after giving effect to such Designation; and
(b) the Company would be permitted under this Indenture to incur
$1.00 of additional Indebtedness pursuant to clause (j) of Section 10.11
at the time of such Designation (assuming the effectiveness of such
Designation).
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by Board
Resolutions delivered to the Trustee together with an Officers' Certificate
certifying compliance with the foregoing provisions. Any Receivables Subsidiary
shall at all times be an Unrestricted Subsidiary and each of WPSI Inc. and
Alamac Sub Holdings Inc. shall initially constitute an Unrestricted Subsidiary.
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Section 10.15. Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, enter into after the Issue Date any arrangement with any Person
providing for the leasing to the Company or any such Restricted Subsidiary of
any real or tangible personal property (except for leases between or among the
Company and any of the Restricted Subsidiaries), which property has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person in contemplation of such leasing (a "Sale/Leaseback Transaction"), unless
(a) the Company or such Restricted Subsidiary would be entitled under either
clause (g) of Section 10.11 or would be entitled under clause (j) of Section
10.11 to incur Indebtedness in an amount equal to the Attributable Indebtedness
with respect to such arrangement and (b) the gross proceeds of any such sale are
at least equal to the Fair Market Value of such property.
Section 10.16. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company and any other
obligor on the Securities will furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenants compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with, and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents,
certificates 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 with respect to compliance with a
condition or covenant provided for in this Indenture will include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements
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or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether such covenant or condition
has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 10.17. Application of Fall Away Covenants.
If no Default has occurred and is continuing, after the ratings
assigned to the Securities by any two of the Rating Agencies are equal to or
higher than BBB- and Baa3, or the equivalents thereof, as applicable (the
"Investment Grade Ratings"), and notwithstanding that the Securities may later
cease to have an Investment Grade Rating, the Company and the Restricted
Subsidiaries will not be subject to the provisions of this Indenture governing
such Securities described in Section 10.11, clause (b) of the first paragraph of
Section 10.14 and clause (v) of the first paragraph of Section 8.01(a).
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.01. Right of Redemption.
The Securities will be redeemable, in whole or in part, at the
option of the Company at 100% of the principal amount thereof plus the
Make-Whole Premium, together with all accrued and unpaid interest thereon. The
Securities are not subject to redemption through the operation of a sinking
fund.
Section 11.02. 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 11.03. Election To Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 11.01 shall be evidenced by a Board Resolution and an Officers'
Certificate. In case of any redemption at the election of the Company, the
Company shall, at least 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 11.04. Selection by Trustee of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are then listed or, if the Securities are not
then listed on a national securities exchange, on pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days prior
to the redemption date to each Holder of the Securities to be redeemed at its
registered address. If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on the Securities or portions thereof called
for redemption.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for partial redemption and 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.
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Section 11.05. Notice of Redemption.
Notice of redemption will 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 the address of such Holder
appearing in the Security Register.
All notices of redemption will fully identify the Securities and
will state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) if less than all Outstanding Securities are to be redeemed,
the identification of the particular Securities to be redeemed;
(iv) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date
upon surrender of such Security, a new Security or Securities in the
aggregate principal amount equal to the unredeemed portion thereof shall
be issued;
(v) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(vi) that on the Redemption Date the Redemption Price shall become
due and payable upon each such Security or portion thereof, and that
(unless the Company shall default in payment of the Redemption Price)
interest thereon shall cease to accrue on and after said date;
(vii) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(viii) the CUSIP number relating to such Securities; and
(ix) the paragraph of the Securities pursuant to which the
Securities are being redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company will be given by the Company or, at
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the Company's written request, by the Trustee in the name and at the expense of
the Company.
The notice if mailed in the manner herein provided will 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 will not affect the validity of the proceedings for the redemption of
any other Security.
Section 11.06. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company will deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.03) an
amount of money in same day funds sufficient to pay the Redemption Price of, and
accrued interest on, all the Securities or portions thereof which are to be
redeemed on that date.
Section 11.07. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed will, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Securities
will cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security will be paid by the Company at the
Redemption Price; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date will 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 3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate then borne by
such Security.
Section 11.08. 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
<PAGE> 99
-92-
office or agency maintained for such purpose pursuant to Section 10.02 (with, if
the Company, the Security Registrar or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to, the Company,
the Security Registrar or the Trustee duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed or purchased.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
surviving rights or registration of transfer or exchange of Securities herein
expressly provided for) and the Trustee, on written demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when either
(a) all Securities theretofore authenticated and delivered (other
than (A) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.06 hereof and (B) Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 10.03) have been delivered to the
Trustee for cancellation; or
(b) (i) all such Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee in trust an amount of money
in dollars sufficient to pay and discharge the entire Indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for the
principal of, premium, if any, and interest to the date of such deposit;
<PAGE> 100
-93-
(ii) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee (i) irrevocable
instructions to apply the deposited money toward payment of the Securities
at the Stated Maturities and the Redemption Dates thereof, and (ii) an
Officers' Certificate and an Opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 12.01, the obligations of the Trustee under Section 12.02 and the last
paragraph of Section 10.03 shall survive such satisfaction and discharge.
Section 12.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03,
all money deposited with the Trustee pursuant to Section 12.01 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the persons entitled thereto, of the principal of, premium, if
any, and interest on the Securities for whose payment such money has been
deposited with the Trustee.
<PAGE> 101
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
WESTPOINT STEVENS INC.
By: /s/ Morgan M. Schuessler
---------------------------------------
Name: Morgan M. Schuessler
Title: Executive Vice President -
Finance and Chief Financial
Officer
By: /s/ Christopher N. Zodrow
---------------------------------------
Name: Christopher N. Zodrow
Title: Vice President and Secretary
THE BANK OF NEW YORK,
as Trustee
By: /s/ Robert A. Massimillo
---------------------------------------
Name: Robert A. Massimillo
Title: Assistant Vice President
<PAGE> 102
EXHIBIT A-1
[Form of Security].
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
"OFFSHORE TRANSACTION" PURSUANT TO REGULATION S, (2) AGREES THAT IT WILL NOT
PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS PERMITTED BY
RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS
SECURITY) OR THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF THIS SECURITY OR (Y) SUCH
LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE
RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF
REGULATION S, (E) TO AN ACCREDITED INVESTOR THAT IS ACQUIRING THE SECURITIES FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
A-1-1
<PAGE> 103
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-1-2
<PAGE> 104
WESTPOINT STEVENS, INC.
-----------------
7 7/8% SENIOR NOTES DUE 2005
CUSIP No. __________
No. ___________ $
WESTPOINT STEVENS INC., a corporation incorporated under the laws of
the State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________ or registered assigns, the
principal sum of _______________ Dollars on June 15, 2005, at the office or
agency of the Company referred to below, and to pay interest thereon on June 15
and December 15 (each an "Interest Payment Date"), of each year, commencing on
December 15, 1998, accruing from the Issue Date or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 7 7/8% per annum, until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, 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 June
1 or December 1 (each a "Regular Record Date"), whether or not a Business Day,
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which 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
ex-
A-1-3
<PAGE> 105
change on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State 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.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
A-1-4
<PAGE> 106
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof 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.
Dated: WESTPOINT STEVENS INC.
By:_______________________________________
Name:
Title:
A-1-5
<PAGE> 107
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the 7 7/8% Senior Notes due 2005, Series A, referred
to in the within-mentioned Indenture.
Dated: ________________________
THE BANK OF NEW YORK,
as Trustee
By:____________________________
Authorized Signatory
A-1-6
<PAGE> 108
[REVERSE OF SECURITY]
1. Indenture. This Security is one of a duly authorized issue of
Securities of the Company designated as its 7 7/8% Senior Notes due 2005, Series
A (herein called the "Initial Securities"). The Securities are limited (except
as otherwise provided in the Indenture referred to below) in aggregate principal
amount to $525,000,000, which may be issued under an indenture (herein called
the "Indenture") dated as of June 9, 1998, by and among the Company and The Bank
of New York, as trustee (herein called the "Trustee," which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities include the Initial Securities, the Private Exchange Securities and
the Exchange Securities, issued in exchange for the Initial Securites pursuant
to the Registration Rights Agreement. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture.
All capitalized 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.
The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
2. Registration Rights. Pursuant to the Registration Rights
Agreement by and among the Company and the Initial
A-1-7
<PAGE> 109
Purchasers, the Company will be obligated to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Security for 7 7/8% Senior Notes due 2005, Series B, of the Company (herein
called the "Exchange Securities"), which have been registered under the
Securities Act, in like principal amount and having identical terms as the
Securities (other than as set forth in this paragraph). The Holders of
Securities shall be entitled to receive certain additional interest payments in
the event such exchange offer is not consummated and upon certain other
conditions, all pursuant to and in accordance with the terms of the Registration
Rights Agreement.
3. Redemption. The Securities will be redeemable, in whole or in
part, at the option of the Company at 100% of the principal amount thereof plus
the Make-Whole Premium, together with all accrued and unpaid interest thereon.
The Securities are not subject to redemption through the operation of a sinking
fund.
If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are the listed or, if the Securities are not
then listed on a national securities exchange, on pro forma basis, by lot or by
such method as the Trustee shall deem fair and appropriate. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days prior
to the redemption date to each Holder of the Securities to be redeemed at its
registered address. If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on the Securities or portions thereof called
for redemption.
4. Offers to Purchase. Section 10.10 of the Indenture provides that
upon the occurrence of a Change of Control Triggering Event, and subject to
certain conditions and limitations contained therein, the Company shall make an
offer to purchase all or a portion of the Securities in accordance with the
procedures set forth in the Indenture.
A-1-8
<PAGE> 110
5. Defaults and Remedies. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Securities, plus all accrued
and unpaid interest, if any, to and including the date the Securities are paid,
may be declared due and payable in the manner and with the effect provided in
the Indenture.
6. Defeasance. The Indenture contains provisions (which provisions
apply to this Security) for defeasance at any time of (a) the entire
indebtedness of the Company and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company with
certain conditions set forth therein.
7. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past Defaults under the Indenture and this Security and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Security.
8. Denominations, Transfer and Exchange. The Securities are issuable
only in registered form without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
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 of-
A-1-9
<PAGE> 111
fice or agency of the Company maintained for such purpose in the Borough of
Manhattan in The City of New York, State 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 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.
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.
9. Persons Deemed Owners. Prior to and at the time of due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.
10. Termination of Certain Covenants. After the Securities have been
assigned an Investment Grade Rating by any two of the Rating Agencies, and
notwithstanding that the Securities may later cease to have an Investment Grade
Rating, the Company and the Restricted Subsidiaries will no longer be subject to
the provisions of Sections 10.11, clause (b) of the first paragraph of Section
10.14 and clause (v) of the first paragraph of Section 8.01(a) of the Indenture;
provided, that no Default has occurred and is continuing at the time the
Securities have been assigned such rating.
11. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
WestPoint Stevens Inc., 1185 Avenue of the Americas, 11th Floor, New York, New
York 10036.
A-1-10
<PAGE> 112
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(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 such agent.
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), covering resales of this
Security (which effectiveness shall not have been suspended or terminated at the
date of the transfer) and (ii) the date two years (or such shorter period of
time as permitted by Rule 144 under the Securities Act or any successor
provision thereunder) after the later of the original issuance date appearing on
the face of this Security (or any Predecessor Security) or the last date on
which the Company or any Affiliate of the Company was the owner of this Security
(or any Predecessor Security), the undersigned confirms that it has not utilized
any general solicitation or general advertising in connection with the transfer
and that:
[Check One]
A-1-11
<PAGE> 113
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act provided by
Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in accordance
with (a) above and documents, including (i) a transferee
certificate substantially in the form of Exhibit C to the
Indenture in the case of a transfer to non-QIB Accredited
Investors or (ii) a transferor certificate substantially in
the form of Exhibit D to the Indenture in the case of a
transfer pursuant to Regulation S, are being furnished which
comply with the conditions of transfer set forth in this
Security and the Indenture.
If none of the foregoing boxes is checked and, in the case of (b) above, if the
appropriate document is not attached or otherwise furnished to the Trustee, the
Trustee or Registrar shall not be obligated to register this Security in the
name of any person other than the Holder hereof unless and until the conditions
to any such transfer of registration set forth herein and in Section 3.17 of the
Indenture shall have been satisfied.
________________________________________________________________________________
Date: ____________________ Your signature:___________________________________
(Sign exactly as your name
appears on the other side of
this Security)
By:________________________________
NOTICE: To be executed
by an executive officer
Signature Guarantee:____________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
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 "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on
A-1-12
<PAGE> 114
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A (including the
information specified in Rule 144A(d)(4)) or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:____________________ ________________________________
NOTICE: To be executed by
an executive officer
A-1-13
<PAGE> 115
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 10.10 of the Indenture, check the appropriate box:
Section 10.10 [ ]
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 10.10 of the Indenture, state the amount:
$______________
Date: ______________________ Your signature:________________________________
(Sign exactly as your name
appears on the other side of
this Security)
By:_____________________________
NOTICE: To be executed
by an executive officer
Signature Guarantee:____________________
A-1-14
<PAGE> 116
Exhibit A-2
WESTPOINT STEVENS INC.
-----------------
7 7/8% SENIOR NOTES DUE 2005
CUSIP No. __________
No. ___________ $
WESTPOINT STEVENS INC., a corporation incorporated under the laws of
the State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________ or registered assigns, the
principal sum of _______________ Dollars on June 15, 2005, at the office or
agency of the Company referred to below, and to pay interest thereon on June 15
and December 15 (each an "Interest Payment Date"), of each year, commencing on
December 15, 1998, accruing from the Issue Date or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 7 7/8% per annum, until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, 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 June
1 or December 1 (each a "Regular Record Date"), whether or not a Business Day,
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which shall be given to Holders of Securities not less
than 10 days prior to such Special Rec-
A-2-1
<PAGE> 117
ord 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 such Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State 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.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
A-2-2
<PAGE> 118
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof 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.
Dated: WESTPOINT STEVENS INC.
By:_____________________________
Name:
Title:
A-2-3
<PAGE> 119
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the 7 7/8% Senior Notes due 2005, Series B, referred
to in the within-mentioned Indenture.
Dated: _______________________
THE BANK OF NEW YORK,
as Trustee
By:____________________________
Authorized Signatory
A-2-4
<PAGE> 120
REVERSE OF SECURITY
1. Indenture. This Security is one of a duly authorized issue of
Securities of the Company designated as its 7 7/8% Senior Notes due 2005, Series
B (herein called the "Exchange Securities"). The Securities are limited (except
as otherwise provided in the Indenture referred to below) in aggregate principal
amount to $525,000,000, which may be issued under an indenture (herein called
the "Indenture") dated as of June 9, 1998, by and among the Company and The Bank
of New York, as trustee (herein called the "Trustee," which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities include the Initial Securities, the Private Exchange Securities and
the Exchange Securities, issued in exchange for the Initial Securities pursuant
to the Registration Rights Agreement. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture.
All capitalized 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.
The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
2. Redemption. The Securities will be redeemable, in whole or in
part, at the option of the Company at 100% of
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<PAGE> 121
the principal amount thereof plus the Make-Whole Premium, together with all
accrued and unpaid interest thereon. The Securities are not subject to
redemption through the operation of a sinking fund.
If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are the listed or, if the Securities are not
then listed on a national securities exchange, on pro forma basis, by lot or by
such method as the Trustee shall deem fair and appropriate. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days prior
to the redemption date to each Holder of the Securities to be redeemed at its
registered address. If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on the Securities or portions thereof called
for redemption.
3. Offers to Purchase. Section 10.10 of the Indenture provides that
upon the occurrence of a Change of Control Triggering Event, and subject to
certain conditions and limitations contained therein, the Company shall make an
offer to purchase all or a portion of the Securities in accordance with the
procedures set forth in the Indenture.
4. Defaults and Remedies. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Securities, plus all accrued
and unpaid interest, if any, to and including the date the Securities are paid,
may be declared due and payable in the manner and with the effect provided in
the Indenture.
5. Defeasance. The Indenture contains provisions (which provisions
apply to this Security) for defeasance at any time of (a) the entire
indebtedness of the Company and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company with
certain conditions set forth therein.
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<PAGE> 122
6. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past Defaults under the Indenture and this Security and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Security.
7. Denominations, Transfer and Exchange. The Securities are issuable
only in registered form without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
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 Borough of Manhattan in The City of New York, State 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 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.
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
A-2-7
<PAGE> 123
tax or other governmental charge payable in connection therewith.
8. Persons Deemed Owners. Prior to and at the time of due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.
9. Termination of Certain Covenants. After the Securities have been
assigned an Investment Grade Rating by any two of the Rating Agencies, and
notwithstanding that the Securities may later cease to have an Investment Grade
Rating, the Company and the Restricted Subsidiaries will no longer be subject to
the provisions of Sections 10.11, clause (b) of the first paragraph of Section
10.14 and clause (v) of the first paragraph of Section 8.01(a) of the Indenture;
provided, that no Default has occurred and is continuing at the time the
Securities have been assigned such rating.
10. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
WestPoint Stevens Inc., 1185 Avenue of the Americas, 11th Floor, New York, New
York 10036.
A-2-8
<PAGE> 124
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(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 such agent.
Date: ____________________ Your signature: ________________________________
(Sign exactly as your name
appears on the other side of
this Security)
By:_____________________________
NOTICE: To be executed
by an executive officer
Signature Guarantee:____________________
A-2-9
<PAGE> 125
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 10.10 of the Indenture, check the box: [ ]
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 10.10 of the Indenture, state the amount:
$______________
Date: ____________________ Your signature: ________________________________
(Sign exactly as your name
appears on the other side of
this Security)
By:_____________________________
NOTICE: To be executed
by an executive officer
Signature Guarantee:____________________
A-2-10
<PAGE> 126
EXHIBIT B
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
COMPANY 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.
B-1
<PAGE> 127
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
WestPoint Stevens Inc.
1185 Avenue of the Americas
11th Floor
New York, NY 10036
Ladies and Gentlemen:
In connection with our proposed purchase of $ aggregate principal
amount of the 7 7/8% Senior Notes due 2005 (the "Securities") of WestPoint
Stevens Inc. (the "Company"), we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and, unless
so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account
for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to (x) the date which is two years (or such
shorter period of time as permitted by Rule 144 under the Securities Act)
after the later of the date of original issue of the Securities and (y)
such later date, if any, as may be required by any subsequent change in
applicable law (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) so long as the Securities are
eligible for resale pursuant to Rule 144A under the Securities Act, to a
person we reasonably believe is a "qualified institutional buyer" under
Rule 144A (a "QIB") that purchases for its own account or for the account
of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside
the United States to "foreign purchasers" (as defined below) in offshore
transactions meeting the requirements of Rule 904 of Regulation S under
the Securities Act, (e) to an institutional "accredited investor" within
the meaning of sub-
C-1
<PAGE> 128
paragraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (an
"Accredited Investor") that is purchasing for its own account or for the
account of such an institutional "accredited investor," or (f) pursuant to
any other available exemption from the registration requirements of the
Securities Act, subject, in each of the foregoing cases, to any
requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their
control and to compliance with any applicable state securities laws. The
foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes
is proposed to be made pursuant to clause (c) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Trustee,
which shall provide, among other things, that the transferee is an
Accredited Investor within the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act and that it is acquiring such
Securities for investment purposes and not for distribution in violation
of the Securities Act. Each purchaser acknowledges that the Company, the
Trustee and the Transfer Agent and Registrar reserve the right prior to
any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (d), (e) or (f)
above to require the delivery of an opinion of counsel, certification
and/or other information satisfactory to the Company and the Trustee.
2. We are an Accredited Investor or a QIB purchasing Notes for our
own account or for the account of one or more Accredited Investors, and we
are acquiring the Securities for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution in violation
of the Securities Act or the securities laws of any state of the United
States and we have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its investment in
the Securities for an indefinite period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each
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<PAGE> 129
of which we exercise sole investment discretion and we and any such
account are (a) a QIB, aware that the sale is being made in reliance on
Rule 144A under the Securities Act, (b) an Accredited Investor, or (c) a
person other than a U.S. person ("foreign purchasers"), which term shall
include dealers or other professional fiduciaries in the United States
acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust) in offshore transactions meeting the requirements of
Rules 903 and 904 of Regulation S under the Securities Act.
4. We have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary in order to verify the information contained in the Offering
Memorandum.
5. We are not purchasing the Securities for or on behalf of, and
will not transfer the Securities to, any pension or welfare plan (as
defined in Section 3 of ERISA, except as may be permitted under ERISA and
as described under "Notice to Investors" in the Offering Memorandum.
6. In the event that we purchase any Securities, we will acquire
Securities having an outstanding principal amount of at least $250,000 for
our own account and $250,000 for each account for which we are acting.
We understand that the Trustee and the Transfer Agent will not be
required to accept for registration of transfer any Securities acquired by us,
except upon presentation of evidence satisfactory to the Company and the Trustee
that the foregoing restrictions on transfer have been complied with. We further
understand that the Securities purchased by us will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph. We further agree to provide to any person
acquiring any of the Securities from us a notice advising such person that
transfers of such Securities are restricted as stated herein and that
certificates representing such Securities will bear a legend to that effect.
We represent that you, the Company, the Trustee and others are
entitled to rely upon the truth and accuracy of our acknowledgements,
representations and agreements set forth
C-3
<PAGE> 130
herein, and we agree to notify you promptly in writing if any of our
acknowledgements, representations or agreements herein cease to be accurate and
complete. You are also irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
We represent to you that we have full power to make the foregoing
acknowledgements, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United States"
and "U.S. person" have the respective meanings given to them in Regulation S
under the Securities Act.
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 Securities would be registered in the name of the
new beneficial owner as follows:
Name:______________________________
Address:______________________________
C-4
<PAGE> 131
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
______________, ____
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Trustee Administration
Re: WestPoint Stevens Inc.
(the "Company") 7 7/8% Senior Notes due 2005
(the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate principal amount
at maturity of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
D-1
<PAGE> 132
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities; and
(6) if the circumstances set forth in Rule 904(c) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Securities may be offered and sold during
the restricted period specified in Rule 903(c)(2) or (3), as applicable;
in accordance with the provisions of Regulation S; pursuant to
registration of the Securities under the Securities Act; or pursuant to an
available exemption from the registration requirements under the
Securities Act.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________
Authorized Signature
D-2
<PAGE> 1
EXHIBIT 4(d)
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of June 9, 1998
by and among
WESTPOINT STEVENS INC.
and
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
GOLDMAN, SACHS & CO.,
NATIONSBANC MONTGOMERY SECURITIES LLC,
BNY CAPITAL MARKETS, INC.,
FIRST CHICAGO CAPITAL MARKETS, INC., and
SCOTIA CAPITAL MARKETS
================================================================================
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of June 9, 1998 by and among MERRILL LYNCH & CO., MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED ("Merrill Lynch"), Goldman, Sachs & Co.,
Nationsbanc Montgomery Securities LLC, BNY Capital Markets, Inc., First Chicago
Capital Markets, Inc. and Scotia Capital Markets (together with Merrill Lynch,
the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated as
of June 3, 1998, by and among WestPoint Stevens Inc., a Delaware corporation
(the "Company"), and the Initial Purchasers (the "Purchase Agreement"), which
provides for, among other things, the sale by the Company to the Initial
Purchasers of $525,000,000 aggregate principal amount of the Company's 7 7/8%
Senior Notes due 2005 (the "Securities"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Additional Interest" shall have the meaning set forth in Section
2(e) hereof.
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(s)
hereof.
"Business Day" shall mean a day that is not a Saturday, a Sunday, or
a day on which banking institutions in New York, New York are required to
be closed.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
<PAGE> 3
-2-
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted
assigns.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; provided, however, that such
depositary must have an address in the Borough of Manhattan, in The City
of New York.
"Effectiveness Period" shall have the meaning set forth in Section
2(b) hereof.
"Effectiveness Target Date" shall have the meaning set forth in
Section 2(e) hereof.
"Event Date" shall have the meaning set forth in Section 2(e)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on an appropriate form under the Securities Act,
and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Securities" shall mean the 7 7/8% Senior Notes due 2005,
issued by the Company to be offered to Holders of Securities in exchange
for Securities pursuant to the Exchange Offer, which shall be identical to
the Securities (except that (i) interest thereon shall accrue from the
last date on which interest was paid on the Securities or, if no such
interest has been paid, from the Issue Date, (ii) the transfer
restrictions thereon and all
<PAGE> 4
-3-
registration rights in respect thereof shall be eliminated and (iii) the
provisions relating to Additional Interest shall be eliminated).
"Holders" shall mean the Initial Purchasers, for so long as they own
any Registrable Securities, each of their direct and indirect successors,
assigns and transferees who become registered owners of Registrable
Securities under the Indenture and each Participating Broker-Dealer that
holds Exchange Securities for so long as such Participating Broker-Dealer
is required to deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Securities.
"Indenture" shall mean the Indenture relating to the Securities
dated as of June 9, 1998 between the Company and The Bank of New York, as
trustee, as the same may be amended from time to time in accordance with
the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(m)
hereof.
"Issue Date" shall mean the date on which the Securities are
originally issued.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 3(s) hereof.
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
<PAGE> 5
-4-
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus
as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(m) hereof.
"Registrable Securities" shall mean the Securities and, if issued,
the Private Exchange Securities; provided, however, that Securities and,
if issued, the Private Exchange Securities, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such
Securities shall have been declared effective under the 1933 Act and such
Securities shall have been disposed of pursuant to such Registration
Statement, (ii) such Securities have been sold to the public pursuant to
Rule 144 (or any similar provision then in force, but not Rule 144A) under
the 1933 Act, (iii) such Securities shall have ceased to be outstanding or
(iv) the Exchange Offer is consummated (except in the case of Securities
purchased from the Company and continued to be held by the Initial
Purchasers).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all applicable SEC, stock exchange or National
Association of Securities Dealers, Inc. (the "NASD") registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable
fees and disbursements of one counsel for Holders that are Initial
Purchasers in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the
rules of the NASD, (iii) all applicable expenses incurred by the Company
in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus and any amend-
<PAGE> 6
-5-
ments or supplements thereto, and in preparing or assisting in preparing
any other documents relating to the performance of and compliance with
this Agreement, (iv) all rating agency fees, if any, (v) the fees and
disbursements of counsel for the Company, (vii) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Securities on any securities exchange or exchanges, if the Company, in its
discretion, elects to make any such listing; but excluding fees of counsel
to the Holders and underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.
"Registration Statement" shall mean any registration statement
(including, without limitation, the Exchange Offer Registration Statement
and the Shelf Registration Statement) of the Company which covers any of
the Exchange Securities or Registrable Securities pursuant to the
provisions of this Agreement, and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to
this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company relating to a "shelf" offering in accordance with
Rule 415 of the Securities Act, or any similar rule that may be adopted by
the SEC, pursuant to the provisions of Section 2(b) hereof which covers
all of the Registrable Securities or all of the Private Exchange
Securities, as the case may be, on an appropriate form under the
Securities Act, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
<PAGE> 7
-6-
"TIA" shall have the meaning set forth in Section 3(k) hereof.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any applicable law or
applicable policy of the SEC, the Company shall, for the benefit of the Holders,
at the Company's cost, use its best efforts to (i) cause to be filed with the
SEC within 60 days after the Issue Date an Exchange Offer Registration Statement
on an appropriate form under the Securities Act covering the offer by the
Company to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange Securities,
(ii) have such Exchange Offer Registration Statement declared effective under
the Securities Act by the SEC not later than the date which is 120 days after
the Issue Date, (iii) have such Registration Statement remain effective until
the closing of the Exchange Offer and (iv) commence the Exchange Offer and, on
or prior to 30 Business Days after the date on which the Exchange Offer
Registration Statement was declared effective by the SEC, issue Exchange
Securities in exchange for all Securities properly tendered prior thereto in the
Exchange Offer. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder eligible and electing to
exchange Registrable Securities (other than Private Exchange Securities) for
Exchange Securities (assuming that such Holder is not an affiliate of the
Company within the meaning of Rule 405 under the Securities Act and is not a
broker-dealer tendering Registrable Securities acquired directly from the
Company for its own account, acquires the Exchange Securities in the ordinary
course of such Holder's business and has no arrangements or understandings with
any Person to participate in the Exchange Offer for the purpose of distributing
(within the meaning of the Securities Act) the Exchange Securities) and to
transfer such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act and under state securities
or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement,
<PAGE> 8
-7-
together with an appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 20 Business Days after the date of notice thereof is mailed to
the Holders (or longer if required by applicable law) (such period
referred to herein as the "Exchange Period");
(iii) utilize the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the
notice, a facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Securities delivered for exchange, and a
statement that such Holder is withdrawing his election to have such
Securities exchanged; and
(v) otherwise comply in all material respects with all applicable
laws relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company upon the request of
any such Initial Purchaser shall, to the extent not prohibited by any applicable
law or applicable policy of the SEC, use its best efforts to simultaneously with
the delivery of the Exchange Securities in the Exchange Offer, issue and deliver
to such Initial Purchaser in exchange (the "Private Exchange") for the
Securities held by such Initial Purchaser, a like principal amount of debt
securities of the Company, that are identical to the Exchange Securities, except
that (i) such securities shall bear appropriate transfer restrictions and (ii)
the registration rights in respect thereof shall continue to apply (the "Private
Exchange Securities").
The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical to all material
respects to the Indenture and which, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the Exchange
Securities shall not be subject to the transfer restrictions set forth in the
Indenture. The Indenture or such indenture shall provide that the Exchange
Securities, the Private
<PAGE> 9
-8-
Exchange Securities and the Securities shall vote and consent together on all
matters as one class and that none of the Exchange Securities, the Private
Exchange Securities or the Securities will have the right to vote or consent as
a separate class on any matter. The Private Exchange Securities shall be of the
same series as, and the Company shall use all commercially reasonable efforts to
have the Private Exchange Securities bear the same CUSIP number as, the Exchange
Securities. Neither the Company nor any of its Subsidiaries shall have any
liability under this Agreement solely as a result of such Private Exchange
Securities not bearing the same CUSIP number as the Exchange Securities.
The Exchange Offer and the Private Exchange shall not be subject to
any conditions, other than that (i) the Exchange Offer or Private Exchange, as
the case may be, does not violate applicable law or any applicable policy of the
SEC, (ii) no action or proceeding shall have been instituted or threatened in
any court or by any governmental agency which might materially impair the
ability of the Company to proceed with the Exchange Offer or the Private
Exchange, and no material adverse development shall have occurred in any
existing action or proceeding with respect to the Company, (iii) all
governmental approvals shall have been obtained, which approvals the Company
deems necessary for the consummation of the Exchange Offer or Private Exchange
and (iv) the due tendering of Registrable Securities in accordance with the
terms of the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and/or
the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all Registrable Securities or portions
thereof properly tendered and not validly withdrawn pursuant to the
Exchange Offer in accordance with the terms of the Exchange Offer
Registration Statement and the letter of transmittal that is an exhibit
thereto;
(ii) accept for exchange all Securities properly tendered pursuant
to the Private Exchange; and
(iii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted
for exchange by the Company, and issue, and cause the Trustee under the
Indenture to promptly authenticate and deliver to each Holder, a new
Exchange Security or Private Exchange Security, as the
<PAGE> 10
-9-
case may be, equal in principal amount to the principal amount of the
Registrable Securities surrendered by such Holder and accepted for
exchange.
To the extent not prohibited by any law or applicable policy of the
SEC, the Company shall use its best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than those set forth in the two preceding paragraphs. Each Holder of
Registrable Securities (other than Private Exchange Securities) who wishes to
exchange such Registrable Securities for Exchange Securities in the Exchange
Offer will be required to make certain customary representations in connection
therewith, including representations that such Holder is not an affiliate of the
Company within the meaning of Rule 405 under the Securities Act, or if it is an
affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable and deliver
information to be used in connection with the Shelf Registration Statement
within a reasonable time period in order to have their Securities included in
the Shelf Registration Statement, that it is not a broker-dealer tendering
Registrable Securities acquired directly from the Company for its own account,
that any Exchange Securities to be received by it will be acquired in the
ordinary course of business and that at the time of the commencement of the
Exchange Offer it has no arrangement or understanding with any Person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Securities. The Company may inform the Initial Purchasers of the
names and addresses of the Holders to whom the Exchange Offer is made, and, if
so informed, the Initial Purchasers shall have the right to contact such Holders
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities, and the Company shall have no further obligation to
register Registrable Securities (other than Private Exchange Securities)
pursuant to Section 2(b) hereof.
(b) Shelf Registration. In the event that (i) the Company is not
permitted to file the Exchange Offer Registration Statement or to consummate the
Exchange Offer because the
<PAGE> 11
-10-
Exchange Offer is not permitted by applicable law or Commission policy, (ii) the
Exchange Offer is not for any other reason consummated within 150 days after the
Issue Date, (iii) any holder of Securities notifies the Company within 10
Business Days after the commencement of the Exchange Offer that (a) due to a
change in applicable law or SEC policy it is not entitled to participate in the
Exchange Offer, (b) due to a change in applicable law or SEC policy it may not
resell the Exchange Securities to be acquired by it in the Exchange Offer to the
public without delivering a prospectus and the prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such holder or (c) it is a broker-dealer and owns Securities acquired
directly from the Company for its own account or (iv) the holders of a majority
of the Securities may not resell the Exchange Securities to be acquired by them
in the Exchange Offer to the public without restriction under the Securities Act
(other than the delivery of the Prospectus included in the Exchange Offer
Registration Statement), then the Company shall, at its cost, use its best
efforts to cause to be filed as promptly as practicable after such determination
or date, as the case may be, and, in any event, prior to the later of (A) 150
days after the Issue Date or (B) 30 days after such filing obligation arises and
use its best efforts to cause the Shelf Registration Statement to be declared
effective by the SEC on or prior to 90 days after such obligation arises;
provided, however, that if the Company has not consummated the Exchange Offer
within 150 days of the Issue Date, then the Company will file with the SEC on or
prior to the 165th day after the Issue Date, a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Securities, and
shall use its best efforts to have such Shelf Registration Statement declared
effective by the SEC as soon as practicable. No Holder of Registrable Securities
may include any of its Registrable Securities in any Shelf Registration pursuant
to this Agreement unless and until such Holder furnishes to the Company in
writing, within 10 days after receipt of a request therefor, such information as
the Company may, after conferring with counsel with regard to information
relating to Holders that would be required by the SEC to be included in such
Shelf Registration Statement or Prospectus included therein, reasonably request
for inclusion in any Shelf Registration Statement or Prospectus included
therein. Each Holder as to which any Shelf Registration is being effected agrees
to furnish to the Company all information with respect to such Holder necessary
to make any information previously furnished to the Company by such Holder not
materially misleading.
<PAGE> 12
-11-
The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective for a period of two years from the
Issue Date (subject to extension pursuant to the last paragraph of Section 3
hereof) (or such shorter period that will terminate when all of the Registrable
Securities covered by such Shelf Registration Statement have been sold pursuant
thereto) or cease to be outstanding (the "Effectiveness Period"); provided,
however, that if such Shelf Registration Statement has been filed solely at the
request of any Initial Purchasers pursuant to clause (iv) above, the Company
shall only be required to use its best efforts to keep such Shelf Registration
Statement continuously effective for a period of one year from the Issue Date
(subject to extension pursuant to the last paragraph of Section 3 hereof) or for
such shorter period which will terminate when all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding. The Company shall not permit
any securities other than Registrable Securities or the Company's 7 7/8% Senior
Notes due 2008 to be included in the Shelf Registration. The Company further
agrees, if necessary, to supplement or amend the Shelf Registration Statement,
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the Securities Act or by any other rules and regulations thereunder for shelf
registrations, and the Company agrees to furnish to the Holders of Registrable
Securities copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b) hereof and the
reasonable fees and expenses of one counsel, if any, designated in writing by
the Majority Holders to act as counsel for the Holders of the Registrable
Securities in connection with a Shelf Registration Statement. Except as provided
in the preceding sentence, each Holder shall pay all expenses of its counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to the
Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Securities
pursuant to a Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable
<PAGE> 13
-12-
Securities may legally resume. The Company will be deemed not to have used its
best efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if it voluntarily takes any action that would result
in any such Registration Statement not being declared effective or in the
Holders of Registrable Securities covered thereby not being able to exchange or
offer and sell such Registrable Securities during that period, unless such
action is required by applicable law or unless such action is taken by the
Company in good faith and for valid business reasons, including the acquisition
or divestiture of assets, so long as the Company promptly thereafter complies
with the requirements of Section 3(b) hereof, if applicable.
(e) Additional Interest. In the event that (i) the applicable
Registration Statement is not filed with the SEC on or prior to the date
specified herein for such filing, (ii) the applicable Registration Statement is
not declared effective on or prior to the date specified herein for such
effectiveness after such obligation arises (the "Effectiveness Target Date"),
(iii) if the Exchange Offer is required to be consummated hereunder, the Company
fails to consummate the Exchange Offer within 30 Business Days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) the applicable Registration Statement is filed and declared
effective prior to the Effectiveness Target Date but shall thereafter cease to
be effective or usable without being succeeded immediately by an additional
Registration Statement covering the Registrable Securities which has been filed
and declared effective (each such event referred to in clauses (i) through (iv),
a "Registration Default"), then the interest rate on the Registrable Securities
as to which such Registration Default relates will increase ("Additional
Interest"), with respect to the first 90-day period (or portion thereof) while a
Registration Default is continuing immediately following the occurrence of such
Registration Default, in an amount equal to 0.25% per annum of the principal
amount of the Securities. The rate of additional Interest will increase by an
additional 0.25% per annum of the principal amount of the Securities for each
subsequent 90-day period (or portion thereof) while a Registration Default is
continuing until all Registration Defaults have been cured, up to an aggregate
maximum increase in the in-
<PAGE> 14
-13-
terest rate of 1.00% per annum of the principal amount of the Securities.
Additional Interest shall be computed based on the actual number of days elapsed
during which any such Registration Defaults exist. Following the cure of a
Registration Default, the accrual of Additional Interest with respect to such
Registration Default will cease and the interest will revert to the original
rate.
If the Company issues a notice that the Shelf Registration Statement
is unusable due to the pendency of an announcement of a material corporate
transaction, or such a notice is required under applicable securities laws to be
issued by the Company, and the aggregate number of days in any consecutive
twelve-month period for which all such notices are issued or required to be
issued exceeds 30 days in the aggregate, then the interest rate borne by the
applicable Securities will be increased by 0.25% per annum following the date
that such Shelf Registration Statement ceases to be usable for a period of time
in excess of the period permitted above, which rate shall be increased by an
additional 0.25% per annum at the beginning of each subsequent 90-day period;
provided that the aggregate increase in such annual interest rate may in no
event exceed 1.00% per annum. Upon the Company declaring that the Shelf
Registration Statement is usable after the period of time described in the
preceding sentence, the interest rate borne by the applicable Securities will be
reduced to the original interest rate if the Company is otherwise in compliance
with this paragraph.
The Company shall notify the Trustee within three Business Days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). Additional
Interest shall be paid in arrears by depositing with the Trustee, in trust, for
the benefit of the Holders of Registrable Securities, on or before the
applicable semiannual interest payment date, immediately available funds in sums
sufficient to pay the Additional Interest then due. The Additional Interest due
shall be payable in arrears on each interest payment date to the record Holder
of Securities entitled to receive the interest payment to be paid on such date
as set forth in the Indenture. Each obligation to pay Additional Interest shall
be deemed to accrue from and including the day following the applicable Event
Date.
(f) Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b)
<PAGE> 15
-14-
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it would not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations of
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Company, (ii) shall, in the case of a Shelf Registration,
be available for the sale of the Registrable Securities by the selling
Holders thereof and (iii) shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and use its best
efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof. The Company shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must provide
information for inclusion therein without the Holders being afforded an
opportunity to review such documentation a reasonable time prior to the
filing of such document or if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object by written notice to the
Company within two Business Days after receipt of such documentation;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented by any required prospectus
supplement and as so supplemented to be filed pursuant to Rule 424 (or any
similar provision then in force) under the Securities Act, and comply with
the provisions of the Securities Act, the Exchange Act and the rules and
regulations
<PAGE> 16
-15-
promulgated thereunder applicable to it with respect to the disposition of
all securities covered by each Registration Statement during the
Effectiveness Period or the Applicable Period, as the case may be, in
accordance with the intended method or methods of distribution by the
selling Holders thereof described in this Agreement (including sales by
any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) furnish to each Holder
of Registrable Securities, without charge, as many copies of each
Prospectus, and any amendment or supplement thereto and such other
documents as such Holder may reasonably request, in order to facilitate
the disposition of the Registrable Securities and (ii) subject to the last
paragraph of Section 3 hereof, hereby consent to the use of the Prospectus
or any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto subject to the limitations on the use thereof provided
in Sections 2(b) and 2(c);
(d) in the case of a Shelf Registration, use its best efforts to
register or qualify, as may be required by applicable law, the Registrable
Securities under all applicable state securities or "blue sky" laws of
such jurisdictions by the time the applicable Registration Statement is
declared effective by the SEC as any Holder of Registrable Securities
covered by a Registration Statement shall reasonably request in advance of
such date of effectiveness, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall
not be required to (i) qualify as a foreign corporation or as a broker or
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general
consent to service of process or (iii) subject itself to general service
of process or taxation in any such jurisdiction if it is not so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers who have notified the Company that they will be utilizing
the Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(s) hereof, notify each Holder of
<PAGE> 17
-16-
Registrable Securities, or such Participating Broker-Dealers, as the case
may be, their counsel, if any, promptly and if requested by such Holder or
Participating Broker-Dealer confirm such notice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request
by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective, (iii)
of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if the Company
receives any notification with respect to the suspension of the
qualification of the Registrable Securities or the Exchange Securities to
be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v) of
the happening of any event or the failure of any event to occur or the
discovery of any facts or otherwise, during the period a Shelf
Registration Statement is effective which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Registration Statement or Prospectus to omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading and
(vi) the Company's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of
each Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein
by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing
Securities covered by such Shelf Registration to be sold and
<PAGE> 18
-17-
relating to the subsequent transfer of such Securities; and cause such
Registrable Securities to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling
Holders may reasonably request at least two Business Days prior to the
closing of any sale of Registrable Securities;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof, use its
best efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct
such misstatement or omission;
(j) obtain a CUSIP number for all Exchange Securities or
Registrable Securities, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with
certificates for the Exchange Securities or the Registrable Securities, as
the case may be, in a form eligible for deposit with the Depositary;
(k) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration
of the Exchange Securities or Registrable Securities, as the case may be,
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its reasonable
best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(l) in the case of a Shelf Registration, enter into such agreements
and take all such other appropriate ac-
<PAGE> 19
-18-
tions as are reasonably requested in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and in
such connection if so requested, (i) make such representations and
warranties to Holders of such Registrable Securities with respect to the
business of the Company and its subsidiaries as then conducted and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by Companies to underwriters in similar underwritten
offerings, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof in form and
substance reasonably satisfactory to the Holders of a majority in
principal amount of the Registrable Securities covered by such
Registration Statement, addressed to each selling Holder covering the
matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
Holders; (iii) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to the Company and the
selling Holders of Registrable Securities (other than Participating
Broker-Dealers, unless such Participating Broker-Dealers would be deemed
to be "underwriters" as a result of the sale of Securities covered by such
Shelf Registration Statement), such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with similar underwritten offerings and such other matters
as reasonably requested by such selling Holders; and (iv) if an
underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set
forth in Section 4 hereof (or such other provisions and procedures
acceptable to the Company and the Holders of a majority in aggregate
principal amount of Registrable Securities covered by such Registration
Statement) with respect to all parties to be indemnified pursuant to said
Section (including, without limitation, such selling Holders). The above
shall be done at each closing in respect of the sale of Registrable
Securities, or as and to the extent required thereunder;
<PAGE> 20
-19-
(m) if (1) a Shelf Registration is filed pursuant to Section 2(b)
or (2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, make available for
inspection by each such person who would be an "underwriter" as a result
of either (i) the sale by such person of Securities covered by such Shelf
Registration Statement or (ii) the sale during the Applicable Period by a
Participating Broker-Dealer of Exchange Securities (provided that a
Participating Broker-Dealer shall not be deemed to be an underwriter
solely as a result of it being required to deliver a prospectus in
connection with any resale of Exchange Securities) and any attorney,
accountant or other agent retained by any such person (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to enable
them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of the Company and its subsidiaries
to supply all information in each case reasonably requested by any such
Inspector in connection with such Registration Statement. Records which
the Company determines, in good faith, to be confidential and any Records
which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors to any other Person unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement, (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or (iii) the information in such Records has been made
generally available to the public through no fault or action of any
selling Holder of such Registrable Securities, any such Participating
Broker-Dealer or any Inspector. Each such Holder and each such
Participating Broker-Dealer will be required to agree that information
obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such is
made generally available to the public through no fault or action of such
Holder, such Participating Broker-Dealer or any Inspector. Each selling
Holder of such Registrable Securities and each such Participating
Broker-Dealer will
<PAGE> 21
-20-
be required to further agree that it will, upon learning that disclosure
of such Records is necessary under (i) or (ii) above, give notice to the
Company and allow the Company at its expense to undertake appropriate
action to prevent disclosure of the Records deemed confidential;
(n) comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Registration Statement, which
statements shall cover said 12-month periods;
(o) upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company addressed to the Trustee for
the benefit of all Holders of Registrable Securities participating in the
Exchange Offer or the Private Exchange, as the case may be, and which
includes an opinion that (i) the Company has duly authorized, executed and
delivered the Exchange Securities and Private Exchange Securities, and
(ii) each of the Exchange Securities or the Private Exchange Securities,
as the case may be, constitute a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its
respective terms (in each case, with customary exceptions);
(p) if an Exchange Offer or a Private Exchange is to be
consummated, upon proper delivery of the Registrable Securities by Holders
to the Company (or to such other Person as directed by the Company) in
exchange for the Exchange Securities or the Private Exchange Securities,
as the case may be, the Company shall mark, or cause to be marked, on such
Registrable Securities and on the books of the Trustee, the Note Registrar
(as defined in the Indenture) and, if necessary, the Depositary, delivered
by such Holders that such Registrable Securities are being canceled in
exchange for the Exchange Securities or the Private Exchange Securities,
as the case may be; but in no
<PAGE> 22
-21-
event shall such Registrable Securities be marked as paid or otherwise
satisfied solely as a result of being exchanged for Exchange Securities or
Private Exchange Securities in the Exchange Offer or the Private Exchange,
as the case may be;
(q) cooperate with each seller of Registrable Securities covered by
any Registration Statement participating in the disposition of such
Registrable Securities and one counsel acting on behalf of all such
sellers in connection with the filings, if any, required to be made with
the NASD;
(r) use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities covered
by a Registration Statement contemplated hereby; and
(s) (A) in the case of the Exchange Offer Registration Statement
(i) include in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution," which section shall be reasonably
acceptable to Merrill Lynch, as representative of the Initial Purchasers,
and which shall contain a summary statement of the positions taken or
policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer (a "Participating
Broker-Dealer") that holds Registrable Securities acquired for its own
account as a result of market-making activities or other trading
activities and that will be the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of Exchange Securities to be received by such
broker-dealer in the Exchange Offer, whether such positions or policies
have been publicly disseminated by the staff of the SEC or such positions
or policies, in the reasonable judgment of Merrill Lynch, as
representative of the Initial Purchasers or such other representative,
represent the prevailing views of the staff of the SEC, including a
statement that any such Participating Broker-Dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer may
be deemed a statutory underwriter and must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of
such Exchange Securities, (ii) for a period of 180 days after consummation
of an Exchange Offer, furnish to each Participating Broker-Dealer who has
delivered to the Company the notice referred to in Section 3(e), without
charge, as many copies of each Prospectus included in the Exchange Offer
Registration State-
<PAGE> 23
-22-
ment, and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request; (iii) hereby consent to the use of
the Prospectus forming part of the Exchange Offer Registration Statement
or any amendment or supplement thereto, by any Person subject to the
prospectus delivery requirements of the SEC, including all Participating
Broker-Dealers, in connection with the sale or transfer of the Exchange
Securities covered by the Prospectus or any amendment or supplement
thereto, (iv) use its best efforts to keep the Exchange Offer Registration
Statement effective and to amend and supplement the Prospectus contained
therein in order to permit such Prospectus to be lawfully delivered by all
Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such Persons must comply with such
requirements in order to resell the Exchange Securities; provided,
however, that such period shall not be required to exceed 90 days (or such
longer period if extended pursuant to the last sentence of Section 3
hereof) (the "Applicable Period"), and (iv) include in the transmittal
letter or similar documentation to be executed by an exchange offeree in
order to participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus
meeting the requirements of the Securities Act in connection with
any resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, such broker-dealer
will not be deemed to admit that it is an underwriter within the meaning
of the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company agrees to deliver, upon request, to the Trustee and to
Participating Broker-Dealers who have delivered to the Company the notice
referred to in Section 3(e) upon consummation of the Exchange Offer an
officers' certificate containing certifications substantially simi-
<PAGE> 24
-23-
lar to those set forth in Section 5(c) of the Purchase Agreement.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such seller and the proposed distribution of such
Registrable Securities, as the Company may from time to time reasonably request
in writing. The Company may exclude from such registration the Registrable
Securities of any seller who fails to furnish such information within a
reasonable time (not to exceed 10 Business Days) after receiving such request
and shall be under no obligation to compensate any such seller for any lost
income, interest or other opportunity forgone, or any liability incurred, as a
result of the Company's decision to exclude such seller.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Company that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(s) hereof, that are seeking to sell Exchange Securities
and are required to deliver Prospectuses, each Holder agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to a Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(i) hereof or
until it is advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or Exchange
Securities, as the case may be, current at the time of receipt of such notice.
If the Company shall give any such notice to suspend the disposition of
Registrable Securities or Exchange Securities, as the case may be, pursuant to a
Registration Statement, the Company shall use its best efforts to file and have
declared effective (if an amendment) as soon as practicable an amendment or
supplement to the Registration Statement and, in the case of an amendment, have
such amendment declared effective as soon as practicable and shall extend the
period during which such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days in the period from and
including the date of the giving of such notice to and including the date when
the Company shall have made available
<PAGE> 25
-24-
to the Holders (x) copies of the supplemented or amended Prospectus necessary to
resume such dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) The Company shall indemnify
and hold harmless each Initial Purchaser, each Holder, each Participating
Broker-Dealer, each underwriter who participates in an offering of Registrable
Securities, their respective affiliates, each Person, if any, who controls any
of such parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto), covering
Registrable Securities or Exchange Securities, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any court or governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Sections 4(c) and 4(d) below) any such
settlement is effected with the prior written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including
reasonable fees and disbursements of one counsel chosen as provided in
Section 4(c) below) reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any court or governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue
<PAGE> 26
-25-
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under subparagraph (i) or
(ii) of this Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with written information furnished in writing to the Company by or
on behalf of such Initial Purchaser, such Holder, such Participating
Broker-Dealer or any underwriter with respect to such Initial Purchaser, Holder,
Participating Broker-Dealer or underwriter, as the case may be, expressly for
use in the Registration Statement (or any amendment or supplement thereto) or
any Prospectus (or any amendment or supplement thereto) or (ii) contained in any
preliminary Prospectus or the final Prospectus if such Initial Purchaser, such
Holder, such Participating Broker-Dealer or such underwriter failed to send or
deliver a copy of the final Prospectus (or any amendment or supplement thereto)
to the Person asserting such losses, claims, damages or liabilities on or prior
to the delivery of written confirmation of any sale of securities covered
thereby to such Person in any case where the Company shall have previously
furnished copies thereof to such Initial Purchaser, such Holder, such
Participating Broker-Dealer or such underwriter, as the case may be, in
accordance with this Agreement, at or prior to the written confirmation of the
sale of such Securities to such Person and the untrue statement contained in or
the omission from the preliminary Prospectus or the final Prospectus was
corrected in the final Prospectus (or any amendment or supplement thereto). Any
amounts advanced by the Company to an indemnified party pursuant to this Section
4 as a result of such losses shall be returned to the Company if it shall be
finally determined by a court of competent jurisdiction in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, each of its directors and officers who signs any
Registration Statement, each Initial Purchaser, each underwriter who
participates in an offering of registrable Securities and the other selling
Holders and each of their respective directors and each Person, if any, who
controls any of the Company, the Initial Purchasers, any underwriter or any
other selling Holder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, against any and all loss, liability, claim, damage and
expense whatsoever described in the indemnity contained in Section 4(a)
<PAGE> 27
-26-
hereof, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment or supplement thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such selling Holder with respect to
such Holder expressly for use in the Registration Statement (or any supplement
thereto), or any such Prospectus (or any amendment thereto); provided, however,
that, in the case of the Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Holder from the sale of Registrable Securities pursuant to the Shelf
Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 4(a) above, one counsel to all the
indemnified parties shall be selected by Merrill Lynch, and, in the case of
parties indemnified pursuant to Section 4(b) above, counsel to all the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party.
Notwithstanding the foregoing, if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action (which approval shall not be unreasonably withheld),
unless such indemnified parties reasonably object to such assumption on the
ground that there may be legal defenses available to them which are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local
<PAGE> 28
-27-
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution is sought under this Section 4, unless such
settlement, compromise or consent (i) includes a full and unconditional release
of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and the offer and sale of any Securities and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel pursuant to Section 4(a)(iii) above, then such indemnifying
party agrees that it shall liable for any settlement of the nature contemplated
by Section 4(a)(ii) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Initial
Purchasers and the Holders, as applicable, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Company, the Initial Purchasers and the
Holders; provided, however, that 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 that was not guilty of such
fraudulent misrepresentation. As between the Company and the Initial Purchasers
and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate
<PAGE> 29
-28-
to reflect the relative fault of the Company, on the one hand, and of the Holder
of Registrable Securities, the Participating Broker-Dealer or Initial
Purchasers, as the case may be, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company, on the one hand, and the Holder
of Registrable Securities, the Participating Broker-Dealer or the Initial
Purchasers, as the case may be, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, or by the Holder of Registrable
Securities, the Participating Broker-Dealer or the Initial Purchasers, as the
case may be, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Holders of the Registrable Securities and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 4.
For purposes of this Section 4, each affiliate of any Person, if
any, who controls a Holder of Registrable Securities, an Initial Purchaser or a
Participating Broker-Dealer within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such other Person, and each director of the Company, each affiliate of the
Company, each executive officer of the Company who signed the Registration
Statement, and each Person, if any, who controls any Company within the meaning
of Section 15 of the Securities act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company.
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required un-
<PAGE> 30
-29-
der the terms of such underwriting arrangements. The Company shall be under no
obligation to compensate any Holder for lost income, interest or other
opportunity foregone, or other liability incurred, as a result of the Company's
decision to exclude such Holder from any underwritten registration if such
Holder has not complied with the provisions of this Section 5 in all material
respects following 10 Business Days' written notice of non-compliance and the
Company's decision to exclude such Holder.
6. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount of the Registrable Securities covered by
the Shelf Registration Statement; provided, however, that such underwriters and
managers must be reasonably satisfactory to the Company.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. So long as any of the Registrable
Securities are outstanding, the Company will file with the Commission, to the
extent then permitted by the Commission, the annual reports, quarterly reports
and other documents that the Company would have been required to file with the
Commission pursuant to Sections 13(a) and 15(d) of the Exchange Act if the
Company was subject to such Sections, and the Company will promptly provide to
the Trustee copies of such reports and documents; provided, however, that if the
Company is for any reason unable to make such filings it will make available,
upon request, to any Holder of Registrable Securities or prospective purchaser
of Registrable Securities the information specified in Rule 144A(d)(4) of the
Securities Act.
(b) No Inconsistent Agreements. The rights granted to the Holders
hereunder do not, and will not for the term of this Agreement in any way
conflict with and are not, and will not during the term of this Agreement be
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any other agreements entered into by the
Company.
(c) Amendments and Waivers. The provisions of this Agreement,
including provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, other-
<PAGE> 31
-30-
wise than with the prior written consent of the Company and the Majority
Holders; provided, however, that no amendment, modification, or supplement or
waiver or consent to the departure with respect to the provisions of Section 4
hereof shall be effective as against any Holder of Registrable Securities or the
Company unless consented to in writing by such Holder of Registrable Securities
or the Company, as the case may be.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, facsimile, or any courier guaranteeing overnight delivery (i)
if to a Holder, at the most current address given by such Holder to the Company
by means of a notice given in accordance with the provisions of this Section
7(d), which address initially is, with respect to the Initial Purchasers, the
address set forth in the Purchase Agreement; and (ii) if to the Company,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt is confirmed, if sent by facsimile; and on the next Business Day,
if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Company and of the Initial Purchasers, including, without limitation and without
the need for an express assignment, subsequent Holders; provided, however, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Registrable Securities, in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the
<PAGE> 32
-31-
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Initial Purchasers and each
Holder shall be a third party beneficiary of the agreements made hereunder
between the Company, on the one hand, and the Initial Purchasers, on the other
hand, and shall have the right to enforce such agreements directly to the extent
it deems such enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.
(g) 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 to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. All specified times of day refer
to New York City time.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Company or any of its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or any of its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
<PAGE> 33
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
WESTPOINT STEVENS INC.
By: /s/ Morgan M. Schuessler
------------------------------------
Name: Morgan M. Schuessler
Title: Executive Vice President -
Finance and Chief Financial
Officer
Confirmed and accepted as of the date first above written:
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
GOLDMAN, SACHS & CO.,
NATIONSBANC MONTGOMERY SECURITIES LLC,
BNY CAPITAL MARKETS, INC.,
FIRST CHICAGO CAPITAL MARKETS, INC., and
SCOTIA CAPITAL MARKETS
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:
----------------------------------
Name:
Title:
<PAGE> 34
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
WESTPOINT STEVENS INC.
By:
------------------------------------
Name:
Title:
Confirmed and accepted as of the date first above written:
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
GOLDMAN, SACHS & CO.,
NATIONSBANC MONTGOMERY SECURITIES LLC,
BNY CAPITAL MARKETS, INC.,
FIRST CHICAGO CAPITAL MARKETS, INC., and
SCOTIA CAPITAL MARKETS
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Gregory Alan Margolies
----------------------------------
Name: Gregory Alan Margolies
Title: Authorized Signatory
<PAGE> 1
EXHIBIT 4(e)
================================================================================
WESTPOINT STEVENS INC., as Issuer
and
The Bank of New York, as Trustee
---------------------
INDENTURE
Dated as of June 9, 1998
--------------------
$475,000,000
7 7/8% Senior Notes due 2008, Series A
7 7/8% Senior Notes due 2008, Series B
================================================================================
<PAGE> 2
Trust Indenture Indenture
Act Section Section
----------- -------
ss. 310 (a)(1)...................................... 6.09
(a)(2)...................................... 6.09
(a)(3)...................................... Not Applicable
(a)(4)...................................... Not Applicable
(b)......................................... 6.08, 6.10
ss. 311 (a)......................................... 6.07
(b)......................................... 6.07
(c)......................................... Not Applicable
ss. 312 (a)......................................... 7.01
(b)......................................... 7.02
(c)......................................... 7.02
ss. 313 (a)......................................... 7.03
(b)......................................... 7.03
(c)......................................... 7.03
(d)......................................... 7.03
ss. 314 (a)......................................... 7.04, 10.09
(b)......................................... Not Applicable
(c)(1)...................................... 1.04, 4.04
(c)(2)...................................... 1.04, 4.04,
(c)(3)...................................... Not Applicable
(d)......................................... Not Applicable
(e)......................................... 1.04
ss. 315 (a)......................................... 6.01(a)
(b)......................................... 6.02
(c)......................................... 6.01(b)
(d)......................................... 6.01(c)
(e)......................................... 5.14
ss. 316 (a) (last sentence) ........................ 3.14
(a)(1)(A)................................... 5.12
(a)(1)(B)................................... 5.13
(a)(2)...................................... Not Applicable
(b)......................................... 5.08
ss. 317 (a)(1)...................................... 5.03
(a)(2)...................................... 5.04
(b)......................................... 10.03
ss. 318 (a)......................................... 1.08
- ----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed
to be a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
Page
----
PARTIES................................................................ 1
RECITALS............................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.............................................1
Section 1.02. Other Definitions......................................23
Section 1.03. Rules of Construction..................................23
Section 1.04. Form of Documents Delivered to Trustee.................24
Section 1.05. Acts of Holders........................................24
Section 1.06. Notices, etc., to the Trustee and the Company..........25
Section 1.07. Notice to Holders; Waiver..............................26
Section 1.08. Conflict with Trust Indenture Act......................26
Section 1.09. Effect of Headings and Table of Contents...............27
Section 1.10. Successors and Assigns.................................27
Section 1.11. Separability Clause....................................27
Section 1.12. Benefits of Indenture..................................27
Section 1.13. GOVERNING LAW..........................................27
Section 1.14. No Recourse Against Others.............................27
Section 1.15. Independence of Covenants..............................27
Section 1.16. Exhibits...............................................28
Section 1.17. Counterparts...........................................28
Section 1.18. Duplicate Originals....................................28
ARTICLE TWO
SECURITY FORMS
Section 2.01. Form and Dating........................................28
ARTICLE THREE
THE SECURITIES
Section 3.01. Title and Terms........................................29
Section 3.02. Registrar and Paying Agent.............................30
Section 3.03. Execution and Authentication...........................30
Section 3.04. Temporary Securities...................................33
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Section 3.05. Transfer and Exchange..................................33
Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities.......34
Section 3.07. Payment of Interest; Interest Rights Preserved.........35
Section 3.08. Persons Deemed Owners..................................36
Section 3.09. Cancellation...........................................37
Section 3.10. Computation of Interest................................37
Section 3.11. Legal Holidays.........................................37
Section 3.12. CUSIP Number...........................................38
Section 3.13. Paying Agent To Hold Money in Trust....................38
Section 3.14. Treasury Securities....................................38
Section 3.15. Deposits of Monies.....................................39
Section 3.16. Book-Entry Provisions for Global Securities............39
Section 3.17. Special Transfer Provisions............................40
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance or Covenant
Defeasance..........................................43
Section 4.02. Defeasance and Discharge...............................43
Section 4.03. Covenant Defeasance....................................44
Section 4.04. Conditions to Defeasance or Covenant Defeasance........45
Section 4.05. Deposited Money and U.S. Government Obligations To
Be Held in Trust; Other Miscellaneous
Provisions..........................................47
Section 4.06. Reinstatement..........................................48
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default......................................49
Section 5.02. Acceleration of Maturity; Rescission and Annulment.....51
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee..............................52
Section 5.04. Trustee May File Proofs of Claims......................52
Section 5.05. Trustee May Enforce Claims Without Possession of
Securities..........................................53
Section 5.06. Application of Money Collected.........................54
Section 5.07. Limitation on Suits....................................54
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Section 5.08. Unconditional Right of Holders To Receive
Principal, Premium and Interest.....................55
Section 5.09. Restoration of Rights and Remedies.....................56
Section 5.10. Rights and Remedies Cumulative.........................56
Section 5.11. Delay or Omission Not Waiver...........................56
Section 5.12. Control by Majority....................................56
Section 5.13. Waiver of Past Defaults................................57
Section 5.14. Undertaking for Costs..................................57
Section 5.15. Waiver of Stay, Extension or Usury Laws................58
Section 5.16. Unconditional Right of Holders To Institute Certain
Suits...............................................58
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities....................59
Section 6.02. Notice of Defaults.....................................60
Section 6.03. Certain Rights of Trustee..............................60
Section 6.04. Trustee Not Responsible for Recitals, Dispositions
of Securities or Application of Proceeds
Thereof.............................................62
Section 6.05. Trustee and Agents May Hold Securities;
Collections; Etc....................................62
Section 6.06. Money Held in Trust....................................62
Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim.........................................62
Section 6.08. Conflicting Interests..................................63
Section 6.09. Corporate Trustee Required; Eligibility................63
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.............................................64
Section 6.11. Acceptance of Appointment by Successor.................66
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business..............................67
Section 6.13. Trustee's Application for Instructions from the
Company.............................................67
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish
Trustee Names and Addresses of Holders..............68
Section 7.02. Communications of Holders..............................68
Section 7.03. Reports by Trustee.....................................69
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Section 7.04. Reports by Company.....................................69
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.01. Company May Consolidate, etc., Only on Certain
Terms...............................................70
Section 8.02. Successor Substituted..................................71
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers
Without Consent of Holders..........................71
Section 9.02. Supplemental Indentures, Agreements and Waivers
with Consent of Holders.............................72
Section 9.03. Execution of Supplemental Indentures, Agreements
and Waivers.........................................74
Section 9.04. Effect of Supplemental Indentures......................75
Section 9.05. Conformity with Trust Indenture Act....................75
Section 9.06. Reference in Securities to Supplemental Indentures.....75
Section 9.07. Record Date............................................75
Section 9.08. Revocation and Effect of Consents......................76
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest............76
Section 10.02. Maintenance of Office or Agency.......................76
Section 10.03. Money for Security Payments To Be Held in Trust.......77
Section 10.04. Corporate Existence...................................79
Section 10.05. Payment of Taxes and Other Claims.....................79
Section 10.06. Maintenance of Properties.............................79
Section 10.07. Insurance.............................................80
Section 10.08. Books and Records.....................................80
Section 10.09. Provision of Financial Statements.....................80
Section 10.10. Change of Control Triggering Event....................80
Section 10.11. Limitation on Additional Indebtedness.................83
Section 10.12. Statement by Officers as to Default...................85
Section 10.13. Limitation on Liens...................................85
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Section 10.14. Limitation on Designations of Unrestricted
Subsidiaries.......................................86
Section 10.15. Limitation on Sale and Leaseback Transactions.........87
Section 10.16. Compliance Certificates and Opinions..................87
Section 10.17. Application of Fall Away Covenants....................88
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.01. Right of Redemption...................................88
Section 11.02. Applicability of Article..............................88
Section 11.03. Election To Redeem; Notice to Trustee.................89
Section 11.04. Selection by Trustee of Securities To Be Redeemed.....89
Section 11.05. Notice of Redemption..................................90
Section 11.06. Deposit of Redemption Price...........................91
Section 11.07. Securities Payable on Redemption Date.................91
Section 11.08. Securities Redeemed or Purchased in Part..............91
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge of Indenture...............92
Section 12.02. Application of Trust Money............................93
Exhibit A-1 - Form of Initial Security
Exhibit A-2 - Form of Exchange Security
Exhibit B - Form of Legend for Book-Entry Securities
Exhibit C - Form of Certificate To Be Delivered in
Connection with Transfers to Non-QIB Accredited
Investors
Exhibit D - Form of Certificate To Be Delivered in Connection with
Transfers Pursuant to Regulation S
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<PAGE> 8
INDENTURE, dated as of June 9, 1998, between WestPoint Stevens Inc.,
a corporation incorporated under the laws of the State of Delaware (the
"Company"), as issuer, and The Bank of New York, a New York banking corporation,
as trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of 7 7/8%
Senior Notes due 2008, Series A, and 7 7/8% Senior Notes due 2008, Series B, to
be issued in exchange for the 7 7/8% Senior Notes due 2008, Series A, pursuant
to a Registration Rights Agreement (as defined), and, to provide therefor the
Company has duly authorized the execution and delivery of this Indenture.
All things necessary have been done to make the Securities (as
defined), when executed by the Company and authenticated and delivered hereunder
and duly issued by the Company, the valid obligations of the Company and to make
this Indenture a valid agreement of each of the Company and the Trustee in
accordance with the terms hereof.
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 (as hereinafter defined) of the
Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"8 3/4% Senior Notes" means the Company's 8 3/4% Senior Notes due
2001.
"9 3/8% Senior Subordinated Debentures" means the Company's 9 3/8%
Senior Subordinated Debentures due 2005.
"Acquired Indebtedness" means Indebtedness of a Person existing at
the time such Person becomes a Restricted Sub-
<PAGE> 9
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sidiary or assumed in connection with an Asset Acquisition of such Person,
including, without limitation, Indebtedness incurred in connection with, or in
anticipation of, such Person's becoming a Restricted Subsidiary or such
acquisition.
"Affiliate" means, with respect to any specified Person, any other
Person which, directly or indirectly, controls, is controlled by or is under
direct or indirect common control with, such specified Person. For the purposes
of this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent Member" has the meaning set forth in Section 3.16.
"Asset Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) or Investment by the
Company or any Restricted Subsidiary to or in any other Person, or purchase or
acquisition of Capital Stock, by the Company or any of its Restricted
Subsidiaries of any other Person, in either case pursuant to which such other
Person shall become a Restricted Subsidiary of the Company or any of the
Restricted Subsidiaries or shall be merged with or into the Company or any of
the Restricted Subsidiaries or (ii) any acquisition by the Company or any of the
Restricted Subsidiaries of the assets of any Person which constitute
substantially all of an operating unit or business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease or other disposition to any Person other than the Company or a
Restricted Subsidiary, in one transaction or a series of related transactions
(including by way of sale and leaseback), of (i) any Capital Stock of any
Restricted Subsidiary or (ii) any other property or asset of the Company or any
Restricted Subsidiary outside of the ordinary course of business. The term
"Asset Sale" shall not include (a) any sale by the Company of its Capital Stock,
(b) sales of inventory, rental assets and real estate held for sale in the
ordinary course of business in accordance with past practices, (c) Capitalized
Lease Obligations or (d) sales of receivables as contemplated by the Trade
Receivables Facility.
<PAGE> 10
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"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Securities, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).
"Bankruptcy Law" means Title 11, United States Code or any similar
federal or state law relating to bankruptcy, insolvency, receivership,
winding-up, liquidation, reorganization or relief of debtors or the law of any
other jurisdiction 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.
"Bankruptcy Order" means any court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation,
receivership, winding-up, dissolution, "concordate" or reorganization, or
appointing a Custodian of a debtor or of all or any substantial part of a
debtor's property, or providing for the staying, arrangement, adjustment or
composition of indebtedness or other relief of a debtor.
"Board" means the Board of Directors of the Company.
"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, and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York,
State of New York are authorized or obligated by law, regulation or executive
order to close.
"Capital Stock" means, with respect to any Person, any and all
shares, partnership interests, participations, rights in, or other equivalents
(however designated and whether voting or non-voting) of, any Person, whether
outstanding on the Issue Date or issued after the Issue Date, and any and all
rights, warrants or options exchangeable for or convertible into such capital
stock.
<PAGE> 11
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"Capitalized Lease Obligation" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required to be classified
and accounted for as a capital lease obligation under GAAP, and, for the purpose
of this Indenture, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) investments in direct obligations of
the United States government maturing within one year of the date of
acquisition, (ii) investments in certificates of deposit and money market
deposits maturing within one year of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United States,
any State thereof, the District of Columbia or any foreign jurisdiction having
capital, surplus and undivided profits aggregating in excess of $200 million,
(iii) repurchase obligations with a term of not more than 90 days for direct
obligations of the United States government or entered into with a bank meeting
the qualifications described in clause (ii) above, (iv) investment in commercial
paper given the highest rating by Standard & Poor's and Moody's and maturing not
more than one year from the date of acquisition, (v) investments in mutual funds
which invest exclusively in items described in (i)-(iv) above and (vi) demand
deposit accounts maintained in the ordinary course of business.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities 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 total
Voting Stock of the Company; or (b) the Company consolidates with, or merges
with or into, another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any person or
any person 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 converted into or exchanged for cash, securities or other property,
other than any such transaction where (i) the outstanding Voting Stock of the
Company is converted into or exchanged for (1) Voting Stock (other than
Disqualified Stock) of the surviving or transferee corporation or its parent
corpora-
<PAGE> 12
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tion and/or (2) cash, securities and other property in an amount which could be
paid by the Company as a Restricted Payment under this Indenture and (ii)
immediately after such transaction no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) is the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities 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 total Voting Stock of the surviving or transferee corporation or
its parent corporation, as applicable; or (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the Board
(together with any new directors whose election by the Board or whose nomination
for election by the stockholders of the Company was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office.
"Change of Control Triggering Event" means the occurrence of both a
Change of Control and a Rating Decline.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, or if at any time after the execution of this
Indenture such Commission is not existing and performing the applicable duties
now assigned to it, then the body or bodies performing such duties at such time.
"Company" means the person named as the "Company" in the first
paragraph of this Indenture, until a successor person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by any one of its Chairman of the Board,
its Vice-Chairman, its Chief Executive Officer, its President or a Vice
President, and by its Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and delivered to the Trustee.
"Consolidated Adjusted Net Income" means, for any period, the
consolidated net income (or loss) of the Company and the Restricted Subsidiaries
for such period as determined in accordance with GAAP, adjusted, to the extent
included in calcu-
<PAGE> 13
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lating such net income, by excluding, without duplication, (i) all extraordinary
gains or losses, (ii) the net income of any Person combined with the Company or
one of the Restricted Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (iii) any gain or
loss realized upon the termination of any employee pension benefit plan (on an
after-tax basis), (iv) gains in respect of any Asset Sales by the Company or one
of the Restricted Subsidiaries (on an after-tax basis), (v) the net income of
any Restricted Subsidiary to the extent that the declaration of dividends or the
making of distributions by that Restricted Subsidiary of that income is not at
the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, law,
rule or governmental regulations applicable to that Restricted Subsidiary or its
stockholders, (vi) the effect of any charge taken in connection with the
Financing Transactions, (vii) the amortization of goodwill, (viii) the non-cash
portion of any income taxes accrued in accordance with GAAP for such period and
(ix) all non-cash extraordinary, unusual or non-recurring charges for which no
cash accrual is required.
"Consolidated EBITDA" means, for any period, the Consolidated
Adjusted Net Income of the Company and the Restricted Subsidiaries for such
period increased to the extent deducted in determining Consolidated Adjusted Net
Income by the sum of: (i) all income taxes of the Company and the Restricted
Subsidiaries paid or accrued in accordance with GAAP for such period (other than
income taxes attributable to extraordinary, unusual or non-recurring gains or
losses); (ii) all interest expense of the Company and the Restricted
Subsidiaries paid or accrued for such period (including amortization of original
issue discount and interest with respect to Capitalized Lease Obligations);
(iii) the aggregate amount of cash dividends and other distributions declared,
or paid on Capital Stock other than Common Stock of the Company and the
Restricted Subsidiaries for the period; (iv) depreciation expense of the Company
and the Restricted Subsidiaries; (v) amortization expense of the Company and the
Restricted Subsidiaries including, without limitation, amortization of
capitalized debt issuance costs; and (vi) any other non-cash charges of the
Company and the Restricted Subsidiaries to the extent deducted in determining
the Consolidated Adjusted Net Income of the Company, all determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBITDA Coverage Ratio" means the ratio of (i)
Consolidated EBITDA of the Company for the four full fiscal quarters for which
financial statements are available that
<PAGE> 14
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immediately precede the date of the transaction or other circumstances giving
rise to the need to calculate the Consolidated EBITDA Coverage Ratio (the
"Transaction Date") to (ii) the sum of (a) all interest expense of the Company
and the Restricted Subsidiaries paid or accrued (including amortization of
original issue discount and interest with respect to Capitalized Lease
Obligations) and (b) the aggregate amount of cash dividends and other
distributions declared or paid on Disqualified Stock of the Company and the
Restricted Subsidiaries, in each case for such four full fiscal quarter period.
For purposes of this definition, if the Transaction Date occurs prior to the
date on which the Company's consolidated financial statements for the four full
fiscal quarters subsequent to the Issue Date are first available, "Consolidated
EBITDA" and the items referred to in the preceding clause (ii) shall be
calculated after giving effect on a pro forma basis as if the applicable issue
of Securities outstanding on the Transaction Date were issued on the first day
of such four full fiscal quarter period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and the
items referred to in the preceding clause (ii) shall be calculated after giving
effect on a pro forma basis for the period of such calculation to (i) the
incurrence of any Indebtedness of the Company or any of the Restricted
Subsidiaries at any time during the period (the "Reference Period") (A)
commencing on the first day of the four full fiscal quarter period for which
financial statements are available that precedes the Transaction Date and (B)
ending on and including the Transaction Date, including, without limitation, the
incurrence of the Indebtedness giving rise to the need to make such calculation,
as if such incurrence occurred on the first day of the Reference Period; and
(ii) any Asset Sales or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of the Company or any of the Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring
Acquired Indebtedness) occurring during the Reference Period and any retirement
of Indebtedness in connection with such Asset Sales, as if such Asset Sale or
Asset Acquisition and/or retirement occurred on the first day of the Reference
Period. Furthermore, in calculating the denominator (but not the numerator) of
the Consolidated EBITDA Coverage Ratio, (1) interest on Indebtedness determined
on a fluctuating basis as of the Transaction Date and which will continue to be
so determined thereafter shall be deemed to accrue at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; and (2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest
<PAGE> 15
- 8 -
is covered by agreements relating to Interest Rate Protection Obligations, shall
be deemed to accrue at the rate per annum resulting after giving effect to the
operation of such agreements. If the Company or any of the Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
this definition shall give effect to the incurrence of such guaranteed
Indebtedness as if the Company or Restricted Subsidiary had directly incurred
such guaranteed Indebtedness.
"control" means, with respect to any specified person, the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 101 Barclay Street, Floor 21 West, New York, New York 10286, Attention:
Corporate Trust Trustee Administration.
"Custodian" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other law respecting secured
creditors and the enforcement of their security or any other person with like
powers whether appointed judicially or out of court and whether pursuant to an
interim or final appointment.
"Debt Securities" means any debt securities (including any guarantee
of such securities) issued by the Company and/or any Restricted Subsidiary in
connection with a public offering (whether or not underwritten) or a private
placement (provided that such private placement is underwritten for resale
pursuant to Rule 144A, Regulation S or otherwise under the Securities Act or
sold on an agency basis by a broker-dealer or one of its Affiliates to 10 or
more beneficial holders).
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by
<PAGE> 16
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the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable (in each case, other than into common stock of the Company), pursuant
to a sinking fund obligation or otherwise, or is exchangeable for Indebtedness,
or is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final Maturity Date of the specified Security. Notwithstanding the
foregoing, in no event shall Capital Stock that is considered Disqualified Stock
solely by reason of such Capital Stock being convertible at the option of the
holder of such capital stock into other Capital Stock (other than Disqualified
Stock) constitute Disqualified Stock.
"Duff & Phelps" means Duff and Phelps Credit Rating Co. and its
successors.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Securities" means 7 7/8% Senior Notes due 2008, Series B
(the terms of which are identical to the Initial Securities except that the
Exchange Securities shall be registered under the Securities Act, and shall not
contain the restrictive legend on the face of the form of Initial Securities),
issued pursuant to this Indenture.
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.
"Financing Transactions" means the consummation of (i) the offering
by the Company of $525,000,000 aggregate principal amount of the Securities and
$475,000,000 aggregate principal amount of its Senior Notes due 2008, (ii) the
Company's tender offers to purchase all of the 8 3/4% Senior Notes and all of
the 9 3/8% Senior Subordinated Debentures, (iii) the redemption of the Company's
9% Sinking Fund Debentures due 2017 and (iv) the Senior Credit Facility and the
availability of funds thereunder.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the
<PAGE> 17
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accounting profession of the United States, which are applicable as of the date
of determination. The Company may, by notice to the Trustee, elect to use GAAP
principles as in effect on the date of such election.
"Global Security" has the meaning provided in Section 3.03 hereof.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books, as the context requires.
"incur" means, with respect to any Indebtedness, to directly or
indirectly create, incur, assume, unconditionally guarantee or in any manner
become liable for such Indebtedness, whether contingently or otherwise, provided
that neither the accrual of interest nor the acquisition of original issue
discount shall be considered an incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, without
duplication, (i) all obligations for borrowed money, (ii) all obligations
evidenced by bonds, Securities, notes or other similar instruments, (iii) all
Capitalized Lease Obligations, (iv) all obligations issued or assumed as the
deferred purchase price of property, all conditional sale obligations and all
obligations under any title retention agreement which purchase price is due more
than six months from the date of incurrence (but excluding trade accounts
payable arising in the ordinary course of business), (v) all obligations issued
or contracted for as payment in consideration of the purchase by such Person of
the stock or substantially all the assets of another Person or a merger or
consolidation, (vi) all obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transactions entered
into in the ordinary course of business, (vii) all obligations of the type
referred to in clauses (i) through (vi) of other Persons and all dividends of
other Persons for the payment of which, in either case, such Person is directly
or indirectly responsible or liable as obligor, guarantor or otherwise and
(viii) all obligations of the type referred to in clauses (i) through (vii) of
other Persons which are secured by any Lien on any property or asset of such
Person, the amount of such obligation being deemed to be the lesser of the value
of such property or asset or the amount of the obligation so secured. For
purposes of Section 10.11, "Indebtedness" shall include all Capital Stock that
is (i) in the case of any Restricted Subsidiary, not common stock of such
Restricted Subsidiary and (ii) Disqualified Stock of the Company.
<PAGE> 18
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"Indenture" means this instrument as originally executed (including
all exhibits and schedules hereto) 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.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Securities to pay principal of,
premium, if any, and interest on the Securities when due and payable, whether at
maturity, by acceleration, call for redemption or repurchase or otherwise, and
all other amounts due or to become due under or in connection with this
Indenture or the Securities and the performance of all other obligations to the
Trustee (including, but not limited to, payment of all amounts due the Trustee
under Section 6.07 hereof) and the Holders of the Securities under this
Indenture and the Securities, according to the terms thereof.
"Initial Purchasers" means Merrill Lynch, Goldman Sachs & Co.,
NationsBanc, Montgomery Securities LLC, BNY Capital Markets, Inc., First Chicago
Capital Markets, Inc. and Scotia Capital Markets.
"Initial Securities" means the 7 7/8% Senior Notes due 2008, Series
A, for so long as such securities constitute Restricted Securities.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest," when used with respect to any Security, means the amount
of all interest accruing on such Security, including all additional interest
payable on the Securities pursuant to the Registration Rights Agreement and all
interest accruing subsequent to the occurrence of any events specified in
Sections 5.01(g), (h) and (i) or which would have accrued but for any such
event, whether or not such claims are allowable under applicable law.
"Interest Payment Date" means, when used with respect to any
Security, the Stated Maturity of an installment of interest on such Security, as
set forth in such Security.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated
<PAGE> 19
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by applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include without limitation, interest rate swaps, caps, floors, collars and
similar agreements.
"Investment" means, with respect to any person, any direct or
indirect advance, loan or other extension of credit (including by means of a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others or otherwise), or any purchase or acquisition by such person of
any Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by any other person. Investments will exclude extensions of
trade credit on commercially reasonable terms in accordance with normal trade
practices. In addition to the foregoing, any foreign exchange contract, currency
swap, Interest Rate Protection Obligation or similar agreement shall constitute
an Investment.
"Investment Grade Rating" has the meaning provided in Section 10.17
hereof.
"Issue Date" means the original date of issuance of the Securities.
"Lien" means any mortgage, lien (statutory or other), pledge,
security interest, encumbrance, claim, hypothecation, assignment for security,
or preference or other security agreement of any kind or nature whatsoever. For
purposes of this Indenture, a Person shall be deemed to own subject to a Lien
any property which it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to Indebtedness of such Person.
"Make-Whole Premium" means, with respect to any Security at any
Redemption Date, the excess, if any, of (a) the aggregate present value of the
sum of the principal and premium amount of such Securities, discounted on a
semi-annual bond equivalent basis from such Redemption Date to June 15, 2008, at
a per annum interest equal to the sum of the Treasury Yield (determined on the
Business Day immediately preceding the date of such redemption or declaration of
accelerated payment) plus 50.0 basis points over (b) the aggregate principal
amount of the Security being redeemed or paid.
<PAGE> 20
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"Maturity Date" means, with respect to any Security, the date on
which any principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity with respect to such principal
or by declaration of acceleration, call for redemption or purchase or otherwise.
"Merrill Lynch" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Non-Global Purchasers" shall have the meaning specified in Section
3.03 hereof.
"Offering Memorandum" means the Offering Memorandum dated June 3,
1998 pursuant to which the Initial Securities were offered, and any supplement
thereto.
"Officer" means, with respect to the Company, the Chairman of the
Board, a Vice Chairman, the President, a Vice President, the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman, the President or a Vice President, and by the
Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer, of
the Company and delivered to the Trustee.
"Offshore Physical Securities" shall have the meaning specified in
Section 3.03 hereof.
"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.
"Outstanding" means, as of the date of determination, all Securities
theretofore authenticated and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) 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 or any
Affiliate thereof) in trust
<PAGE> 21
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or set aside and segregated in trust by the Company or any Affiliate
thereof (if the Company or Affiliate shall act as Paying Agent) for the
Holders of such Securities; provided, however, that if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Securities with respect to which the Company has effected
defeasance or covenant defeasance as provided in Article Four, to the
extent provided in Sections 4.02 and 4.03; and
(iv) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands the Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company 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 that a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. The Company shall notify
the Trustee, in writing, when it repurchases or otherwise acquires Securities,
of the aggregate principal amount of such Securities so repurchased or otherwise
acquired. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the 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. If the Paying Agent holds, in
its capacity as such, on any Maturity Date or on any optional redemption date
money sufficient to pay all accrued interest and principal with respect to such
Securities payable on that date and is not prohibited from paying such money to
the Holders thereof pursuant to the terms of this Indenture, then on and after
that date such Securities cease to be Outstanding and interest on them ceases to
accrue. Securities may
<PAGE> 22
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also cease to be outstanding to the extent expressly provided in Article Eight.
"Paying Agent" shall have the meaning specified in Section 3.02
hereof.
"Permitted Liens" means (a) Liens on property of (or on shares of
Capital Stock or debt securities of) a Person existing at the time such Person
(i) is merged into or consolidated with the Company or any Restricted Subsidiary
or (ii) becomes a Restricted Subsidiary; provided, however, that such Liens were
in existence prior to the contemplation of such merger, consolidation or
acquisition and do not secure any property or assets of the Company or any
Restricted Subsidiary other than the property or assets subject to the Liens
prior to such merger, consolidation or acquisition; (b) Liens existing on the
Issue Date; (c) Liens in favor of the Company or Liens on any property or assets
of a Subsidiary (or on shares of Capital Stock or debt securities of a
Subsidiary) in favor of the Company or any Restricted Subsidiary; (d) Liens
resulting from the deposit of cash or notes in connection with contracts,
tenders or expropriation proceedings, or to secure workers' compensation, surety
or appeal bonds, costs of litigation when required by law, public and statutory
obligations, obligations under franchise arrangements entered into in the
ordinary course of business and other obligations of a similar nature arising in
the ordinary course of business; (e) Liens securing Indebtedness under the
Senior Credit Facility; (f) Liens securing Indebtedness consisting of
Capitalized Lease Obligations, Purchase Money Indebtedness, mortgage financings,
industrial revenue bonds or other monetary obligations, in each case incurred
solely for the purpose of financing all or any part of the purchase price or
cost of construction or installation of assets used in the business of the
Company or the Restricted Subsidiaries, or repairs, additions or improvements to
such assets; provided, however, that (I) such Liens secure Indebtedness in an
amount not in excess of the original purchase price or the original cost of any
such assets or repair, addition or improvement thereto (plus an amount equal to
the reasonable fees and expenses in connection with the incurrence of such
Indebtedness), (II) such Liens do not extend to any other assets of the Company
or any of the Restricted Subsidiaries (and, in the case of repair, addition or
improvements to any such assets, such Lien extends only to the assets (and
improvements thereto or thereon) repaired, added to or improved), (III) the
incurrence of such Indebtedness is permitted by Section 10.11 and (IV) such
Liens attach prior to 270 days after such purchase, construction, installation,
repair, addition or improvement; (g) Liens to secure any refinanc-
<PAGE> 23
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ings (or successive refinancings), in whole or in part, of any Indebtedness
secured by Liens referred to in the clauses above so long as such Lien does not
extend to any other property (other than improvements thereto); (h) Liens
securing letters of credit entered into in the ordinary course of business and
consistent with past business practice; (i) Liens on and pledges of the capital
stock of any Unrestricted Subsidiary; (j) Liens arising from the rendering of a
judgment or order against the Company or any Restricted Subsidiary that does not
give rise to an Event of Default; (k) Liens arising out of conditional sale,
title retention, consignment or similar arrangements for the sale of goods
entered into by the Company or any Restricted Subsidiary in the ordinary course
of business; (l) Liens arising out of any sale of accounts receivable in the
ordinary course to or by a Receivables Subsidiary; (m) Liens on acquired
property or assets of a Restricted Subsidiary to secure Indebtedness of such
Restricted Subsidiary (other than Indebtedness evidenced by Disqualified Stock)
or a guarantee thereof; provided, however, that such Liens were not created in
contemplation of such acquisition; (n) Liens to secure the Indebtedness
described in clause (i) of Section 10.11; and (o) Liens on assets of Restricted
Subsidiaries to secure Indebtedness of the Company and the Restricted
Subsidiaries (other than Debt Securities).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Physical Security" shall have the meaning specified in Section 3.03
hereof.
"Predecessor Security" means, with respect to any particular
Security, 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 3.06 hereof
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.
"Private Exchange Securities" shall have the meaning set forth in
the Registration Rights Agreement.
"Private Placement Legend" shall mean the first paragraph of the
legend initially set forth in the Securities in the form set forth on Exhibit
A-1.
<PAGE> 24
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"Productive Assets" means assets of a kind used or usable in the
business of the Company and the Restricted Subsidiaries.
"Purchase Money Indebtedness" means Indebtedness of the Company or
any Restricted Subsidiary (i) issued to finance or refinance (including any
extensions or renewals) the purchase or construction of any assets of the
Company or any Restricted Subsidiary or (ii) secured by a Lien on any assets of
the Company or any Restricted Subsidiary where the lender's sole recourse is to
the assets so encumbered in either case to the extent (a) the purchase or
construction costs for such assets are included as an asset on the balance sheet
of the Company in accordance with GAAP and (b) the purchase or construction of
such assets is not part of any acquisition of a Person or a business unit.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Rating Agencies" means (i) Standard & Poor's, (ii) Moody's and
(iii) Duff & Phelps.
"Rating Category" means (i) with respect to Standard & Poor's, any
of the following categories: BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: Ba,
B, Caa, Ca, C and D (or equivalent successor categories); and (iii) with respect
to Duff & Phelps BB, B, CCC and D (or equivalent successor categories). In
determining whether the rating of the Securities has decreased by one or more
gradations, gradations within Rating Categories (+ and - for Standard & Poor's;
1, 2 and 3 for Moody's; or + and - for Duff & Phelps) shall be taken into
account (e.g., with respect to Standard & Poor's, a decline in a rating from BB+
to BB, as well as from BB- to B+, will constitute a decrease of one gradation).
"Rating Date" means the date which is 90 days prior to the earlier
of (i) a Change of Control and (ii) public notice of the occurrence of a Change
of Control or of the intention by the Company to effect a Change of Control.
"Rating Decline" means the occurrence of the following on, or within
90 days after, the earlier of (i) the occurrence of a Change of Control and (ii)
the date of public notice of the occurrence of a Change of Control or of the
public notice of the intention of the Company to effect a Change of Control
(which period shall be extended so long as the rating of the Se-
<PAGE> 25
- 18 -
curities is under publicly announced consideration for possible downgrading by
any two of the Rating Agencies): (a) in the event that the Securities have an
Investment Grade Rating, the rating of the Securities by two of such Rating
Agencies shall be reduced below Investment Grade, or (b) in the event the
Securities are rated below Investment Grade by two of such Rating Agencies on
the Rating Date, the rating of the Securities by any of two Rating Agencies
shall be decreased by one or more gradations (including gradations within Rating
Categories as well as between Rating Categories).
"Receivables Subsidiary" means a bankruptcy-remote Subsidiary of the
Company party to a Trade Receivables Facility. The term "bankruptcy remote"
means that the Receivables Subsidiary's charter and by-laws and certain other
documentation relating to a Trade Receivables Facility will contain provisions
that are intended to prevent such Subsidiary from becoming subject to a
voluntary or involuntary bankruptcy proceeding. These provisions may include a
requirement of one or more directors who are not otherwise affiliated with the
Company.
"Redemption Date" means, with respect to any Security to be
redeemed, the date fixed by the Company for such redemption pursuant to this
Indenture and Securities.
"Redemption Price" means, with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture and
the terms of the Securities.
"Registered Exchange Offer" means the registration by the Company
under the Securities Act of all Exchange Securities pursuant to a registration
statement under which the Company offers each Holder of Initial Securities the
opportunity to exchange all Initial Securities held by such Holder for Exchange
Securities in an aggregate principal amount equal to the aggregate principal
amount of Initial Securities held by such Holder, all in accordance with the
terms and conditions of the Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of June 9, 1998 by and among the Company and the Initial
Purchasers, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the terms thereof.
"Regular Record Date" means the Regular Record Date specified in the
Securities.
<PAGE> 26
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"Regulation S" means Regulation S under the Securities Act.
"Responsible Officer" means, with respect to the Trustee, any vice
president, any assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, any trust officer or assistant trust
officer, or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer 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 Security" shall have the meaning specified 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 a Security is a Restricted Security.
"Restricted Subsidiaries" means all of the Company's existing and
future Subsidiaries that are not designated Unrestricted Subsidiaries on the
Issue Date or in accordance with Section 10.14.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale/Leaseback Transaction" means any arrangement with any Person
providing for the leasing to the Company or any Restricted Subsidiary of any
real or tangible personal property (except for leases between or among the
Company and any of the Restricted Subsidiaries), which property has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person in contemplation of such leasing.
"Securities" means, collectively the Initial Securities, the
Exchange Securities and the Private Exchange Securities, if any, treated a
single class of securities, as amended or supplemented from time to time in
accordance with the terms of this Indenture, that are issued pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" shall have the respective meanings specified in
Section 3.05 hereof.
<PAGE> 27
- 20 -
"Security Registrar" or "Registrar" shall have the meaning specified
in Section 3.02 hereof.
"Senior Credit Facility" means the Second Amended and Restated
Credit Agreement dated as of June 9, 1998, among the Company, the financial
institutions party thereto in their capacities as lenders thereunder and
NationsBank, N.A., as Administrative Agent for the lenders, as the same may be
amended from time to time and increased in compliance with Section 10.11, and
any agreement evidencing (whether initial or successive) one or more
refinancings, modifications, replacements, renewals, restatements, refundings,
deferrals, extensions, substitutions, supplements, reissuances or resales
thereof.
"Significant Subsidiary" means, at any particular time, any
Restricted Subsidiary that (a) accounted for more than 10% of the consolidated
revenues or Consolidated EBITDA of the Company and the Restricted Subsidiaries
on a consolidated basis for the most recently completed fiscal year of the
Company or (b) was the owner of more than 10% of the consolidated assets of the
Company and the Restricted Subsidiaries on a consolidated basis as at the end of
such fiscal year, all as shown on the consolidated financial statements of the
Company and the Restricted Subsidiaries for such fiscal year.
"Special Record Date" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.07 hereof.
"Stated Maturity" means, with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness, or
any installment of interest thereon, is due and payable.
"Standard & Poor's" means Standard & Poor's Ratings Service and its
successors.
Subordinated Indebtedness" means Indebtedness of the Company which
is expressly subordinated in right of payment to the Securities.
"Subsidiary" means, with respect to any Person, (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the
<PAGE> 28
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election of directors shall at the time be owned, directly or indirectly, by
such Person, or (ii) any other Person of which at least a majority of voting
interest is at the time, directly or indirectly, owned by such Person.
"Tender Offer Documents" means the Offer to Purchase dated April 29,
1998 relating to the 8 3/4% Senior Notes and 9 3/8% Senior Subordinated
Debentures, as the same may be amended or supplemented from time to time (other
than the Minimum Condition and Supplemental Indenture Condition set forth
therein).
"Trade Receivables Facility" means the arrangements entered into or
that may be entered into by the Company or one or more of its Subsidiaries
pursuant to which the Company or one or more of its Subsidiaries may either
transfer to any other Person or grant a security interest in any trade or other
receivables (whether now existing or arising in the future) and any assets
related to such trade or other receivables including, without limitation, all
collateral securing such trade or other receivables and shall include any
contributions of trade or other receivables and related assets in exchange for
the capital stock of the Receivables Subsidiary and other capital contributions
of trade or other receivables and related assets to the Receivables Subsidiary.
"Treasury Yield" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve Statistical Release
H.15 (519) which has become publicly available at least two Business Days prior
to the date fixed for redemption (or, if such Statistical Release is no longer
published, any publicly available source of similar data)) most nearly equal to
the then remaining average life of the Securities; provided, that if the average
life of the Securities is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury yield
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of United States Treasury securities
for which such yields are given, except that if the average life of the
Securities is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended.
<PAGE> 29
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"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.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such on the Issue Date and any other Subsidiary designated as such
pursuant to and in compliance with the covenant described in Section 10.14. Any
such designation may be revoked by a Board Resolution of the Company delivered
to the Trustee, subject to the provisions of Section 10.14.
"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.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
to vote in the election of members of the board of directors of such Person.
"Wholly Owned Subsidiary" means any Restricted Subsidiary, 100% of
the Capital Stock of which (other than shares of Capital Stock representing any
director's qualifying shares of investments by foreign nationals mandated by
applicable law not in any event to exceed 5% of the total outstanding Capital
Stock) is owned by the Company, by a Wholly Owned Restricted Subsidiary or by
the Company and a Wholly Owned Restricted Subsidiary.
<PAGE> 30
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Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"Act" 1.05
"Change of Control Date" 10.10
"Change of Control Offer" 10.10
"Change of Control Payment Date" 10.10
"covenant defeasance" 4.03
"Defaulted Interest" 3.07
"defeasance" 4.02
"Defeased Securities" 4.01
"insolvent person" 4.04
"Surviving Entity" 8.01
</TABLE>
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(e) all references to "$" or "dollars" shall refer to the lawful
currency of the United States of America; and
(f) the words "include," "included" and "including" as used herein
shall be deemed in each case to be followed by the phrase "without
limitation."
<PAGE> 31
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Section 1.04. 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 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 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 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 such certificate or opinion may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
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, with
proper identification of each matter covered therein, and form one instrument.
Section 1.05. 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 exe-
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cution (as provided below in subsection (b) of this Section 1.05) of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security or the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof to the same extent
as the original Holder, in respect of anything done, suffered or omitted to be
done by the Trustee, any Paying Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
Section 1.06. Notices, etc., to the 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 shall be sufficient
for every purpose hereunder if made, given, furnished or filed, in
writing, to or with the Trustee at The Bank of New York, 101 Barclay
Street, Floor 21 West New York, New York 10286, Attention: Corporate Trust
Trustee Administration or at any other address previously furnished in
writing to the Holders, the Company by the Trustee; or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose (except as otherwise expressly provided herein)
hereunder if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at WestPoint Stevens Inc., 1185 Avenue of the
Americas, 13th Floor, New York, New York 10036, Attention: Chief Executive
Officer, or at any other address
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previously furnished in writing to the Trustee by the Company.
Section 1.07. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise expressly provided
herein) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. 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, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
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Section 1.09. 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 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its respective successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause.
In case any provision in this Indenture or in the Securities issued
pursuant hereto 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 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Securities or issued pursuant
hereto, 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 1.13. 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 PRINCIPLES OF CONFLICTS OF LAW.
Section 1.14. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation.
Section 1.15. Independence of Covenants.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or
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condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
condition exists.
Section 1.16. Exhibits.
All exhibits attached hereto are by this reference made a part
hereof with the same effect as if herein set forth in full.
Section 1.17. 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 1.18. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
ARTICLE TWO
SECURITY FORMS
Section 2.01. Form and Dating.
The Initial Securities and the Exchange Securities and the Trustee's
certificate of authentication with respect thereto shall be in substantially the
forms set forth, or referenced, in Exhibit A-1 and Exhibit A-2, respectively,
annexed hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any applicable law
or with the rules of the Depository, any clearing agency or any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof.
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The definitive Securities shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
Each Security shall be dated the date of its authentication. The
terms and provisions contained in the Securities shall constitute, and are
expressly made, a part of this Indenture.
ARTICLE THREE
THE SECURITIES
Section 3.01. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $475,000,000 in
aggregate principal amount of Securities, except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities pursuant to Section 3.03, 3.04, 3.05, 3.06, 9.06, 10.10 or
11.08.
The final Stated Maturity of the Securities shall be June 15, 2008,
and the Securities shall bear interest at the rate of 7 7/8% per annum from the
Issue Date or from the most recent Interest Payment Date to which interest has
been paid, as the case may be, payable on December 15, 1998 and semi-annually
thereafter on June 15 and December 15, in each year, until the principal thereof
is paid or duly provided for. Interest on any overdue principal, interest (to
the extent lawful) or premium, if any, shall be payable on demand.
The Securities shall be redeemable as provided in Article Eleven and
as provided in the Securities.
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
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Section 3.02. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Securities may be presented for registration of transfer or for exchange
(the "Security Registrar" or "Registrar"), an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Securities may be presented for payment (the "Paying Agent" or "Agent")
and an office or agency where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" or "Agent" includes any additional paying agent.
The Company may act as its own Paying Agent, except for the purposes of payments
on account of principal on the Securities pursuant to Section 10.10.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the Trust Indenture Act. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 6.07 hereof.
The Company initially appoints the Trustee as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Securities.
Section 3.03. Execution and Authentication.
Two Officers shall execute the Securities on behalf of the Company
by either manual or facsimile signature.
Securities bearing the manual or facsimile signature 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.
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At any time and from time to time after the execution and delivery
of this Indenture, the Company many 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 Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as
provided in this Indenture and not otherwise.
A Security shall not be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose until the Trustee manually signs the
certificate of authentication on the Security. The Trustee's signature on such
certificate shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate Initial Securities for original issue
in an aggregate principal amount not to exceed $475,000,000, upon receipt of a
Company Order. In addition, on or prior to the date of the Registered Exchange
Offer, the Trustee or an authenticating agent shall authenticate Exchange
Securities (including any Private Exchange Securities which will be in the form
of Exhibit A-2 but which shall have the restrictive legend contained in Exhibit
A-1) to be issued at the time of the Registered Exchange Offer in the aggregate
principal amount of up to $475,000,000 upon receipt of a Company Order of the
Company. In each case, the Company Order shall specify the amount of Securities
to be authenticated, the names of the persons in which such Securities shall be
registered and the date on which such Securities are to be authenticated and
direct the Trustee to authenticate such Securities together with an Officer's
Certificate certifying that all conditions precedent to the issuance of such
Securities contained herein have been complied with. The aggregate principal
amount of Securities outstanding at any time may not exceed $475,000,000, except
as provided in Section 3.04 hereof.
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. Such authenticating agent shall have the same authenticating rights and
duties as the Trustee in any dealings hereunder with the Company or with any
Affiliate of the Company.
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The certificates representing the Securities will be issued in fully
registered form, without coupons and only in denominations of $1,000 and any
integral multiple thereof. Except as described below, the Securities will be
deposited with, or on behalf of, the Depository, and registered in the name of
Cede & Co. as the Depository's nominee in the form of a global note certificate
substantially in the form of Exhibit A-1 (the "Global Security").
Securities purchased by or transferred to (i) Institutional
Accredited Investors who are not Qualified Institutional Buyers, (ii) except as
described below, persons outside the United States pursuant to sales in
accordance with Regulation S under the Securities Act or (iii) any other persons
who are not Qualified Institutional Buyers (collectively, "Non-Global
Purchasers") will be issued in registered form without coupons substantially in
the form of Exhibit A-1 (the "U.S. Physical Securities"). Upon the transfer to a
Qualified Institutional Buyer of U.S. Physical Securities initially issued to a
Non-Global Purchaser, such U.S. Physical Security will be exchanged for an
interest in the Global Security or in the Securities in the custody of the
Trustee representing the principal amount of Securities being transferred.
Securities purchased by persons outside the United States pursuant
to sales in accordance with Regulation S under the Securities Act will be
represented upon issuance by a temporary global note certificate substantially
in the form of Exhibit A-1 (the "Offshore Physical Securities" and, together
with the U.S. Physical Securities, the "Physical Securities") which will not be
exchangeable for U.S. Physical Securities until the expiration of the "40-day
restricted period" within the meaning of Rule 903(c)(3) of Regulation S under
the Securities Act. The Offshore Physical Securities will be registered in the
name of, and be held by, an offshore physical security holder (the "Offshore
Physical Security Holder") until the expiration of such 40-day period, at which
time the Offshore Physical Securities will be delivered to the Trustee in
exchange for Securities registered in the names requested by the Offshore
Physical Security Holder. In addition, until the expiration of such 40-day
period, transfers of interests in the Offshore Physical Securities can only be
effected through the Offshore Physical Security Holder in accordance with the
requirements of Section 3.17 hereof.
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Section 3.04. Temporary Securities.
Until definitive Securities are prepared and ready for delivery, the
Company may execute and upon a Company Order the Trustee shall authenticate and
deliver temporary Securities. Temporary Securities shall be substantially in the
form of definitive Securities, in any authorized denominations, but may have
variations that the Company reasonably considers appropriate for temporary
Securities as conclusively evidenced by the Company's execution of such
temporary Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay but in no event
later than the date that the Registered Exchange Offer is consummated. 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 10.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of like tenor and 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 3.05. Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being sometimes referred
to herein as the "Securities Register") in which, subject to such reasonable
regulations as the Securities Registrar may prescribe, the Company shall provide
for the registration of Securities and of transfers and exchanges of Securities.
The Trustee is hereby initially appointed Security Registrar for the purpose of
registering Securities and transfers of Securities as herein provided.
When Securities are presented to the Registrar or a co-Registrar
with a request from the Holder of such Securities to register the transfer or
exchange for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested; provided that every Security presented or surrendered for
registration of transfer or exchange shall be duly
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endorsed or be accompanied by a written instrument of transfer or exchange in
form satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. Whenever any Securities are
so presented 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. No service charge shall be made to the Securityholder for
any registration of transfer or exchange. The Company may require from the
Securityholder payment of a sum sufficient to cover any transfer taxes or other
governmental charge that may be imposed in relation to a transfer or exchange,
but this provision shall not apply to any exchange pursuant to Section 3.09,
10.10 or 9.06 hereof (in which events the Company will be responsible for the
payment of all such taxes which arise solely as a result of the transfer or
exchange and do not depend on the tax status of the Holder). The Trustee shall
not be required to exchange or register the transfer of any Security for a
period of 15 days immediately preceding the first mailing of notice of
redemption of Securities to be redeemed or of any Security selected, called or
being called for redemption except, in the case of any Security where public
notice has been given that such Security is to be redeemed in part, the portion
thereof not to be redeemed.
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.
Section 3.06. Mutilated, Destroyed, Lost and Stolen
Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security of any series claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall execute and upon a Company
Order, the Trustee shall authenticate and deliver a replacement Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding,
if the Holder of such Security furnishes to the Company and to the Trustee
evidence reasonably acceptable to them of the ownership and the destruction,
loss or theft of such Security and an indemnity bond shall be posted, sufficient
in the judgment of the Company or the Trustee, as the case may be, to protect
the Company, the Trustee or any Agent from any loss that any of them may suffer
if such Security is replaced. The Company may charge such Holder for the
Company's expenses
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in replacing such Security (including expenses of the Trustee charged to the
Company) and the Trustee may charge the Company for the Trustee's expenses
(including the reasonable fees and expenses of its agents and counsel) in
replacing such Security.
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, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.07. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Securities,
to the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the Regular Record Date; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Securities (or their respective
Predecessor 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, and at the same
time the Company shall deposit with the Trustee an amount of money equal
to the
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aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted
Interest as in this subsection (a) provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date
of the proposed payment and not less than 10 days after the actual receipt
by a Responsible Officer of the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company in writing of such
Special Record Date. In the name and at the expense of the Company, the
Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder at its 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 (or
their respective Predecessor Securities) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after written notice given
by the Company to the Trustee of the proposed payment pursuant to this
subsection (b), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 3.08. Persons Deemed Owners.
Prior to and at the time of due presentment 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 in the Security
Register as the
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owner of such Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.07) interest on such Security and for
all other purposes whatsoever, whether or not such Security shall be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 3.09. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. The Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer or exchange,
redemption or payment. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section 3.09, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall
be returned to the Company.
Section 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
Section 3.11. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, date
established for the payment of Defaulted Interest 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 principal, premium, if any,
or interest 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, Redemption Date, date established for the payment of
Defaulted Interest or at the Stated Maturity, as the case may be, and no
interest shall accrue with respect to such payment for the period from and after
such Interest Payment Date, Redemption Date, date established for the payment of
Defaulted Interest or Stated Maturity, as the case may be, to the next
succeeding Business Day.
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Section 3.12. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number (if
then generally in use), and if so, the Trustee may use the CUSIP numbers in
notices of redemption or exchange as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the Trustee
in writing of any change in the CUSIP number of either series of Securities.
Section 3.13. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, or interest on the Securities, and
shall notify the Trustee of any default by the Company in making any such
payment. Money held in trust by the Paying Agent need not be segregated except
as required by law and in no event shall the Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require the Paying Agent to pay all money held by it to the Trustee and account
for any funds disbursed and the Trustee may at any time during the continuance
of any Event of Default, upon a Company Order to the Paying Agent, require such
Paying Agent to pay forthwith all money so held by it to the Trustee and to
account for any funds disbursed. Upon making such payment, the Paying Agent
shall have no further liability for the money delivered to the Trustee.
Section 3.14. Treasury Securities.
In determining whether the Holders of the required aggregate
principal amount of Securities have concurred in any direction, waiver, consent
or notice, Securities owned by the Company or an Affiliate of the Company shall
be considered as though they are not outstanding, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which a Responsible Officer of the
Trustee actually knows are so owned shall be so considered. The Company shall
notify the Trustee, in writing, when it or any of its Affiliates repurchases or
otherwise acquires Securities, of the aggregate principal amount of such
Securities so repurchased or otherwise acquired.
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Section 3.15. Deposits of Monies.
Prior to 10:30 a.m. New York City time on each Interest Payment
Date, maturity date and Change of Control Purchase Date, the Company shall have
deposited with the Paying Agent in immediately available funds money sufficient
to make cash payments, if any, due on such Interest Payment Date, maturity date
and Change of Control Purchase Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, maturity date and Change of Control Purchase Date, as the case may
be.
Section 3.16. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit B.
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 Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 3.17. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depositary is not appointed
by the Company within 90 days of such notice or
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(ii) an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount at maturity of the Global Security in an amount equal to the
principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Securities of like tenor and principal amount
of authorized denominations.
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b), the Global Securities
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 Securities, an equal aggregate principal amount at
maturity of Physical Securities of like tenor of authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to
subparagraphs (b) or (c) of this Section 3.16 shall, except as otherwise
provided by paragraphs (a)(l)(x) and (c) of Section 3.17, bear the legend
regarding transfer restrictions applicable to the Physical Securities set forth
in Exhibit A-1.
(f) The Holder of any 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 which a Holder is
entitled to take under this Indenture or the Securities.
Section 3.17. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Security constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
non-U.S. person:
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(1) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears the
Private Placement Legend, if (x) the requested transfer is not prior to
the date which is two years (or such shorter period as may be prescribed
by Rule 144(k) under the Securities Act or any successor provision
thereunder) after the later of the original Issue Date of such Security
(or of any Predecessor Security) or the last day on which the Company or
any Affiliate of the Company was the owner of such Security or any
Predecessor Security or (y) (1) in the case of a transfer to a person
purporting to be an Institutional Accredited Investor which is not a QIB
(excluding non-U.S. persons), the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit C hereto or
(2) in the case of a transfer to a person purporting to be a non-U.S.
person, the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto; and
(2) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Security, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (1) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures;
whereupon (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 at maturity of a Global Security in an amount
equal to the principal amount at maturity of the beneficial interest in a Global
Security to be transferred, and (b) the Company shall execute and the Trustee
shall authenticate and deliver one or more Physical Securities of like tenor and
principal amount of authorized denominations.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a person purporting to be a QIB (excluding transfers to
non-U.S. persons):
(1) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on the form of Security stating, or has otherwise advised the Company and
the Registrar in writing, that the transfer has been made in com-
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pliance with the exemption from registration under the Securities Act
provided under 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 Registrar in writing, that such transferee represents and
warrants 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
(2) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in the Global Security, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect
on the Security Register the date and an increase in the principal amount
at maturity of the Global Security in an amount equal to the principal
amount at maturity of the Physical Securities to be transferred, and the
Trustee shall cancel the Physical Securities so transferred.
(c) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the 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, the Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i) the circumstances
contemplated by paragraph (a)(l)(x) of this Section 3.17 exist, (ii) there is
delivered to the Registrar an Opinion of Counsel satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related restrictions
on transfer are required in order to maintain compliance with the provisions of
the Securities Act or (iii) such Security has been sold pursuant to an effective
registration statement under the Securities Act.
(d) Other Transfers. If a Holder proposes to transfer a Security
constituting a Restricted Security pursuant to
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any exemption from the registration requirements of the Securities Act other
than as provided for by Section 3.17(a) and (b), the Registrar shall only
register such transfer or exchange if such transferor delivers an Opinion of
Counsel satisfactory to the Company and the Registrar that such transfer is in
compliance with the Securities Act and the terms of this Indenture; provided
that the Company may, based upon the opinion of its counsel, instruct the
Registrar by a Company Order not to register such transfer in any case where the
proposed transferee is not a QIB, non-U.S. person or Institutional Accredited
Investor.
(e) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a 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 Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 3.16 or this Section 3.17
for a period of two years at which time such letters, notices and other written
communications shall be delivered to the Company. The Company shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any time during normal business hours upon the giving of
reasonable prior written notice to the Registrar.
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. 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 4.02 or Section
4.03 be applied to all of the Outstanding Securities (the "Defeased
Securities"), upon compliance with the conditions set forth below in this
Article Four.
Section 4.02. Defeasance and Discharge.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.02, the Company 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 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 4.05 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 Company 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 4.04 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
3.04, 3.05, 3.06, 10.02 and 10.03, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including, without limitation, the
Trustee's rights under Section 6.07 and (d) this Article Four. Subject to
compliance with this Article Four, the Company may exercise its option under
this Section 4.02 notwithstanding the prior exercise of its option under Section
4.03 with respect to the Securities.
Section 4.03. Covenant Defeasance.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.03, the Company shall be released from its
obligations under any covenant or provision contained in Sections 10.06 through
10.15 and the provisions of Articles Eight shall not apply, 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 not to be "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Defeased
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
Article, whether directly or indirectly, by reason of any reference elsewhere
herein to any such Section or Article or by
<PAGE> 52
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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 5.01(c) or (d), but, except as
specified above, the remainder of this Indenture and such Defeased Securities
shall be unaffected thereby.
Section 4.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 4.02 or Section 4.03 to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Four applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a)
U.S. dollars in an amount, or (b) U.S. Government Obligations which
through the scheduled payment of principal, premium, if any, 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 any such case, sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of, premium, if any, and
interest on the Defeased Securities upon redemption or at the Stated
Maturity of such principal or installment of principal, premium, if any,
or interest; provided, however, that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Securities;
(2) No Default shall have occurred and be continuing on the date of
such deposit or, insofar as Sections 5.01(h), (i) or (j) are concerned, at
any time during the period ending on the ninety-first day after the date
of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
<PAGE> 53
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(3) Neither the Company nor any Subsidiary of the Company is an
"insolvent person" within the meaning of any applicable Bankruptcy Law on
the date of such deposit or at any time during the period ending on the
ninety-first day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);
(4) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities to have a conflicting interest in violation of
Section 6.08 and for purposes of the Trust Indenture Act with respect to
any securities of the Company;
(5) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by
which it is bound;
(6) In the case of an election under Section 4.02, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date hereof, there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred;
(7) In the case of an election under Section 4.03, the Company shall
have delivered to the Trustee an Opinion of Counsel 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;
(8) The Company shall have delivered to the Trustee, an Opinion of
Counsel to the effect that immediately following the ninety-first day
after the deposit, the trust funds established pursuant to this Article
will not be
<PAGE> 54
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subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under
any applicable U.S. Federal or state law;
(9) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election under Section 4.02 or 4.03 was not made by the Company with the
intent of preferring the Holders over the other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (i) all
conditions precedent (other than conditions requiring the passage of time)
provided for relating to either the defeasance under Section 4.02 or the
covenant defeasance under Section 4.03 (as the case may be) have been
complied with as contemplated by this Section 4.04 and (ii) if any other
Indebtedness of the Company shall then be outstanding or committed, such
defeasance or covenant defeasance will not violate the provisions of the
agreements or instruments evidencing such Indebtedness.
Opinions required to be delivered under this Section may have such
qualifications as are customary for opinions of the type required and acceptable
to the Trustee.
Section 4.05. Deposited Money and U.S. Government
Obligations To Be Held in Trust; Other
Miscellaneous Provisions.
Subject to the proviso of the last paragraph of Section 10.03, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 4.05, the "Trustee") pursuant to Section 4.04 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 (other than the Company) 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.
<PAGE> 55
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The Company shall pay and indemnify the Trustee and hold it harmless
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 4.04 or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 4.04 which, in the opinion of an internationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to a Responsible Officer of the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
defeasance or covenant defeasance.
Section 4.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 4.02 or 4.03, 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
obligations of the Company under this Indenture, the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 4.02 or
4.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money and U.S. Government Obligations in accordance
with Section 4.02 or 4.03, as the case may be; provided, however, that if the
Company makes any payment of principal, premium, if any, or interest on any
Security following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money and U.S. Government Obligations held by the Trustee or
Paying Agent.
<PAGE> 56
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ARTICLE FIVE
REMEDIES
Section 5.01. 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
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) default in the payment of any interest on the Securities when it
becomes due and payable, and continuance of any such default for a period
of 30 days; or
(b) default in the payment of the principal of, or premium, if any,
on the Securities issued thereunder, when due, at maturity, upon
redemption, pursuant to an offer to purchase required under this Indenture
pursuant to the Change of Control provisions or otherwise, by acceleration
or otherwise; or
(c) the Company fails to comply with any of its obligations
described in Article Eight or Section 10.10; or
(d) the Company fails to perform or observe any other term, covenant
or agreement contained in the Securities or this Indenture (other than a
default specified in (a), (b) or (c) above) for a period of 45 days after
written notice of such failure requiring the Company to remedy the same
shall have been given (x) to the Company by the Trustee or (y) to the
Company and the Trustee by the Holders of 25% in aggregate principal
amount of the Securities then outstanding; or
(e) default or defaults under one or more agreements, indentures or
instruments under which the Company or any Restricted Subsidiary then has
outstanding Indebtedness in excess of $25 million individually or in the
aggregate and either (a) such Indebtedness is already due and payable in
full or (b) such default or defaults results in the acceleration of the
maturity of such Indebtedness; or
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(f) one or more judgments, orders or decrees for the payment of
money in excess of $25 million (to the extent not covered by insurance),
either individually or, in an aggregate amount, shall be entered against
the Company or any Restricted Subsidiary or any of their respective
properties and shall not be paid, discharged or fully bonded and there
shall have been a period of 60 days during which a stay of enforcement of
such judgment or order, by reason of pending appeal or otherwise, shall
not be in effect; or
(g) the Company or any Significant Subsidiary of the Company
pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the making of a Bankruptcy Order in an
involuntary case or proceeding or the commencement of any case
against it;
(iii) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) files an answer or consent seeking reorganization or
relief;
(vi) shall admit in writing its inability to pay its debts
generally; or
(vii) consents to the filing of a petition in bankruptcy; or
(h) a court of competent jurisdiction in any involuntary case or
proceeding enters a Bankruptcy Order against the Company or any
Significant Subsidiary, and such Bankruptcy Order remains unstayed and in
effect for 60 consecutive days; or
(i) a Custodian shall be appointed out of court with respect to the
Company or any Significant Subsidiary or with respect to all or any
substantial part of the assets or properties of the Company or any
Subsidiary.
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Section 5.02. Acceleration of Maturity; Rescission and
Annulment.
If (x) an Event of Default (other than an Event of Default specified
in Section 5.01(g), (h) or (i) with respect to the Company) occurs and is
continuing then the Holders of at least 25% in aggregate principal amount of the
Securities outstanding may, by written notice, and the Security Trustee upon the
request of the Holders of not less than 25% in aggregate principal amount of the
Securities outstanding shall, declare the principal of, premium, if any, and
accrued interest on, all the Securities to be due and payable immediately. Upon
any such declaration such amounts shall become due and payable immediately. If
an Event of Default specified in clause (g), (h) or (i) above with respect to
the Company occurs and is continuing, then the principal of, premium, if any,
and accrued interest on, all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder of the Securities. In the event of an acceleration
because an Event of Default set forth in clause (e) above has occurred and is
continuing, such acceleration shall be automatically rescinded and annulled if
the event of default triggering such Event of Default pursuant to clause (e)
shall be remedied, cured by the Company or such Restricted Subsidiary or waived
by the holders of the relevant Indebtedness within 60 days after the
acceleration with respect thereto.
After a declaration of acceleration, the Holders of a majority in
aggregate principal amount of the issue outstanding Securities may, by notice to
the Trustee, rescind such declaration of acceleration if all existing Events of
Default have been cured or waived, other than nonpayment of principal of,
premium, if any, and accrued interest on the Securities, that has become due
solely as a result of the acceleration thereof, and if the rescission of
acceleration would not conflict with any judgment or decree. Past defaults under
this Indenture (except a default in the payment of the principal of, premium, if
any, or interest on any Security issued thereunder or in respect of a covenant
or a provision which cannot be modified or amended without the consent of all
holders of such Securities) may be waived by the Holders of a majority in
aggregate principal amount of the outstanding Securities.
<PAGE> 59
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Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if an Event of Default specified in
Section 5.01(a) or 5.01(b) shall have occurred and be continuing, the Company
will, jointly and severally, upon demand of the Trustee, pay to the Trustee, for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal, premium, if any, and interest, with
interest upon the overdue principal, premium, if any, and, to the extent that
payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate then borne by the Securities; and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company, fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may,
but is not obligated under this paragraph to, at the expense of the Company
institute a judicial proceeding for the collection of the sums so due and unpaid
and may, but is not obligated under this paragraph to, prosecute such proceeding
to judgment or final decree, and may, but is not obligated under this paragraph
to, 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, but is not obligated under this paragraph to, (i) 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 contained in this Indenture or
in aid of the exercise of any power granted herein or (ii) proceed to protect
and enforce any other proper remedy. No recovery of any such judgment upon any
property of the Company shall affect or impair any rights, powers or remedies of
the Trustee or the Holders.
Section 5.04. Trustee May File Proofs of Claims.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement,
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adjustment, composition or other judicial proceeding relative to the Company or
any other obligor upon the Securities, including the property of the Company or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, fees, 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;
and any Custodian, in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 5.05. 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 produc-
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tion 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, fees, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
Section 5.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium, if
any, or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
First: to the Trustee for amounts due under Section 6.07;
Second: to Holders for interest accrued on the Securities, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for interest;
Third: to Holders for principal and premium, if any, amounts owing
under the Securities, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal
and premium, if any; and
Fourth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to this
Section 5.06.
Section 5.07. Limitation on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
the Holders of at least 25% in aggregate principal amount of the outstanding
Securities have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as Trustee,
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such Trustee has failed to institute such proceeding within 60 days after
receipt of such notice and such Trustee has not within such 60-day period
received directions inconsistent with such written request by holders of a
majority in aggregate principal amount of the issue of Securities. Such
limitations do not apply, however, to a suit instituted by a Holder of a
Security for the enforcement of the payment of the principal of, premium, if
any, or accrued interest on, such Security on or after the respective due dates
expressed in such Security.
During the existence of an Event of Default under this Indenture,
the Trustee is required to exercise such rights and powers vested in it under
this Indenture and use the same degree of care and skill in its exercise thereof
as a prudent Person would exercise under the circumstances in the conduct of
such Person's own affairs. Subject to the provisions of this Indenture relating
to the duties of the Trustee, in case an Event of Default shall occur and be
continuing, the Trustee is not under any obligation to exercise any of its
rights or powers under this Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to such Trustee security or
indemnity satisfactory to it. Subject to certain provisions of this Indenture
concerning the rights of the Trustee, the Holders of a majority in aggregate
principal amount of the applicable issue of outstanding Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee under this Indenture, or exercising any trust,
or power conferred on the Trustee.
It is understood and intended that no one or more Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security 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 or any Security,
except in the manner provided in this Indenture and for the equal and ratable
benefit of all the Holders.
Section 5.08. Unconditional Right of Holders To Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive cash payment of the principal of, premium, if any, and (subject to
Section 3.07 hereof) interest on such Security on the respective Stated
Ma-
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turities expressed in such Security (or, in the case of redemption, on the
respective Redemption Date) and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder.
Section 5.09. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Security and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as provided in Section 3.06, 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 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five 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 5.12. Control by Majority.
The Holders of 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
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trust or power conferred on the Trustee, provided, however, that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or any Security or expose the Trustee to personal
liability; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.13. 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
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
Section 5.14. 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 and
expenses, 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
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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 respective Redemption Dates).
Section 5.15. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter in force,
which would prohibit or forgive the Company 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 the Company (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 5.16. Unconditional Right of Holders To Institute
Certain Suits.
Notwithstanding any other provision in this Indenture and any other
provision of any Security, the right of any Holder of any Security to receive
payment of the principal of, premium, if any, and interest on such Security on
or after the respective Stated Maturities (or the respective Redemption Dates,
in the case of redemption) expressed in such Security, or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
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ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by provision hereof
are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts
stated therein).
(b) In case 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 their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, 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.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or
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affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.01.
Section 6.02. Notice of Defaults.
Within 60 days after the occurrence of any Default, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Security Register, notice of such Default hereunder actually known to a
Responsible Officer of the Trustee, unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium, if any, or interest on any Security, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders.
Section 6.03. Certain Rights of Trustee.
Subject to Section 6.01 hereof and the provisions of Section 315 of
the Trust Indenture Act:
(a) the Trustee may conclusively rely and shall be fully 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 (whether in its original or facsimile form)
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 of the Company may be sufficiently
evidenced by a Board Resolution thereof;
(c) the Trustee may consult with counsel of its selection and any
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon
in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall
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have offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by the
Trustee in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture other
than any liabilities arising out of its own negligence;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, security, other
evidence of indebtedness or other paper or document unless requested in
writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Securities then Outstanding; provided, however,
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require indemnity satisfactory to it against such expenses
or liabilities as a condition to proceeding; the reasonable expenses of
every such investigation shall be paid by the Company or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Company upon
demand; provided, further, the Trustee in its discretion may make such
further inquiry or investigation into such facts or matters as it may deem
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole
cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation; and
(g) 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.
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Section 6.04. Trustee Not Responsible for Recitals,
Dispositions of Securities or Application of
Proceeds Thereof.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility and Qualification on Form T-1, if any, to be
supplied to the Company are true and accurate subject to the qualifications set
forth therein. The Trustee shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
Section 6.05. Trustee and Agents May Hold Securities;
Collections; Etc.
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Sections 6.08 and 6.13 hereof and Sections 310 and 311 of the Trust Indenture
Act, may otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
the Trustee, Paying Agent, Security Registrar or such other agent.
Section 6.06. 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 herein
or by law. The Trustee shall not be under any liability for interest on any
moneys received by it hereunder.
Section 6.07. Compensation and Indemnification of Trustee
and Its Prior Claim.
The Company covenants and agrees: (a) to pay to the Trustee from
time to time, and the Trustee shall be entitled to, compensation for all
services rendered by it hereunder
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(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) as the Company and the Trustee
shall, from time to time, agree in writing; (b) to reimburse the Trustee and
each predecessor Trustee upon its request for all reasonable expenses, fees,
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, fees, 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; and (c) to indemnify the Trustee and each predecessor Trustee for,
and to hold it harmless against, any and all loss, liability, claim, damage or
expense (including taxes other than taxes based upon the income of the Trustee)
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 6.07. 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, fees,
disbursements and advances shall constitute an additional obligation hereunder
and shall survive the satisfaction and discharge of this Indenture. To secure
the obligations of the Company to the Trustee under this Section 6.07, the
Trustee shall have a prior Lien upon all property and funds held or collected by
the Trustee as such, except funds and property paid by the Company held in trust
for the benefit of the Holders of Securities.
Section 6.08. Conflicting Interests.
The Trustee shall be subject to and comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 6.09. 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 Sections 310(a)(1) and (2)
and which shall have a combined capital and surplus of at least $50,000,000, and
have a Corporate Trust Office in the Borough of Manhattan in The City of New
York, State of New York. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of any Federal, state,
territorial or District of Columbia supervising or examining authority, then for
the pur
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poses 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 6.10. 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 6.11.
(b) The Trustee, or any trustee or trustees hereinafter appointed,
may at any time resign by giving written notice thereof to the Company at
least 20 Business Days prior to the date of such proposed resignation.
Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee by written instrument executed by authority of
the Board of Directors of the Company, a copy of which shall be delivered
to the resigning Trustee and a copy to the successor Trustee. If an
instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within 20 Business 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 a majority in principal amount of the Outstanding Securities, delivered
to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act in accordance with Section
6.08 hereof 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
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(2) the Trustee shall cease to be eligible under Section 6.09
hereof 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 or rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 5.14, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution of its Board of Directors, shall promptly appoint
a successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, 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, the Holder of any Security who has been a bona fide
Holder for at least six months may, subject to Section 5.14, 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.
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Section 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Company or
the successor Trustee, upon payment of any and all amounts due it pursuant to
Section 6.07, such retiring Trustee shall duly assign, transfer and deliver to
the successor Trustee all moneys and property at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
Trustee all the rights, powers, duties and obligations of the retiring Trustee.
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 to secure any amounts then due it pursuant to the provisions of
Section 6.07.
No successor Trustee with respect to the Securities shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
Upon acceptance of appointment by any successor Trustee as provided
in this Section 6.11, the successor 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
6.10. 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.
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Section 6.12. Merger, Conversion, Amalgamation, Consolidation or
Succession to Business
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or amalgamated, or any corporation resulting
from any merger, conversion, amalgamation 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 this Article to serve as Trustee hereunder.
In case at the time such successor to the Trustee under this Section
6.12 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
under this Section 6.12 may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor Trustee; and in all
such cases such certificate shall have the full force which it is anywhere in
the Securities or in this Indenture provided that the certificate of the Trustee
shall have been authenticated.
Section 6.13. Trustee's Application for Instructions from the
Company
Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
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in response to such application concerning the action to be taken or omitted.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish
Trustee Names and Addresses of Holders.
(a) The Trustee shall preserve the names and addresses of the
Securityholders and otherwise comply with Section 312(a) of the Trust Indenture
Act. If the Trustee is not the Registrar, the Company shall furnish or cause the
Registrar to furnish to the Trustee before each Interest Payment Date, and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Securityholders. Neither the Company nor the Trustee shall be under any
responsibility with regard to the accuracy of such list.
(b) The Company will furnish or cause to be furnished to the
Trustee:
(i) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished pursuant to this Subsection 7.01(b).
Section 7.02. Communications of Holders.
Holders may communicate with other Holders with respect to their
rights under this Indenture or under the Securities pursuant to Section 312(b)
of the Trust Indenture Act. The Company and the Trustee and any and all other
persons bene-
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fited by this Indenture shall have the protection afforded by Section 312(c) of
the Trust Indenture Act.
Section 7.03. Reports by Trustee.
Within 60 days after June 1 of each year commencing with the first
June 1 following the date of this Indenture, the Trustee shall mail to all
Holders, as their names and addresses appear in the Security Register, a brief
report dated as of such June 1, in accordance with, and to the extent required
under Section 313 of the Trust Indenture Act. At the time of its mailing to
Holders, a copy of each such report shall be filed by the Trustee with the
Company, the Commission and with each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange or delisted therefrom.
Section 7.04. Reports by Company.
The Company will file with each Trustee, within 15 days after filing
with the Commission, copies of the annual and quarterly reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) which
the Company files with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. If the Company is no longer subject to these periodic reporting
requirements of the Exchange Act, it will nonetheless continue to file reports
with the Trustee as if it were subject to such periodic reporting requirements.
Regardless of whether the Company is required to furnish such reports to its
stockholders pursuant to the Exchange Act, the Company shall cause such reports
containing financial information to be mailed to the Holders within 15 days
after filing such report with the Commission. Such financial information shall
include annual reports containing consolidated financial statements and notes
thereto, together with an opinion thereon expressed by an independent public
accounting firm, management's discussion and analysis of financial condition and
results of operations as well as quarterly reports containing unaudited
condensed consolidated financial statements for the first three quarters of each
fiscal year.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance
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with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officer's Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 8.01. Company May Consolidate, etc., Only on
Certain Terms.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, consolidate with or merge with or into any other Person or
sell, assign, convey, lease or transfer all or substantially all of its
properties and assets in a single transaction or through a series of
transactions, if such transaction or series of transactions would result in a
sale, conveyance, lease, transfer or other disposition of all or substantially
all of the properties and assets of the Company and the Restricted Subsidiaries,
taken as a whole, unless: (i) the resulting, surviving or transferee Person (the
"Surviving entity") shall be a corporation organized and existing under the laws
of the United States or any State thereof or the District of Columbia; (ii) the
surviving entity shall expressly assume, by supplemental indenture executed and
delivered to the Trustee, in form and substance reasonably satisfactory to the
Trustee, all of the obligations of the Company under this Indenture and the
Securities and the Registration Rights Agreements; (iii) immediately after
giving effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, giving effect to any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such transaction
or series of transactions), no Default shall have occurred and be continuing
under this Indenture; (iv) the Company or the surviving entity (if the
transaction or series of transactions involves the Company) shall have delivered
to the Trustee under this Indenture an Officer's Certificate and an Opinion of
Counsel, stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such transaction
or series of transactions, each such supplemental indenture complies with this
covenant and that all conditions precedent in this Indenture relating to the
transaction or series of transactions have been satisfied; and (v) the Company
or the surviving entity (if the transaction or series of transactions involves
the Company) shall immediately after giving effect to such transaction or se
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ries of transactions on pro forma basis (including, without limitation, giving
effect to any Indebtedness incurred or anticipated to be incurred in connection
with or in respect of the transaction or series of transactions) be permitted to
incur $1.00 of additional Indebtedness under clause (j) of Section 10.11 and
other applicable restrictions on additional Indebtedness.
Section 8.02. Successor Substituted.
Upon any consolidation or merger of the Company or any transfer of
all or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the successor
corporation formed by such a consolidation or into which the Company is merged
or to which such transfer is made, shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture and the
Securities and the Registration Rights Agreements, with the same effect as if
such successor corporation had been named as the Company therein; and
thereafter, except in the case of (a) a lease or (b) any sale, assignment,
conveyance, transfer, lease or other disposition to a Restricted Subsidiary of
the Company, the Company shall be discharged from all obligations and covenants
under this Indenture and the Securities.
For all purposes of this Indenture and the Securities (including the
provision of this Section 8.02 and the covenants described in Sections 10.11 and
10.13), Subsidiaries of any Surviving Entity shall, upon such transaction or
series of related transactions, become Restricted Subsidiaries unless and until
designated as Unrestricted Subsidiaries pursuant to and in accordance with
Section 10.14.
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and
Waivers Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form and substance
satisfactory to the Trustee, or waiver for any of the following purposes:
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(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 herein conferred upon the
Company, as applicable, herein, in the Securities, as the case may be;
(c) to cure any ambiguity, to correct or supplement any provision
herein, in the Securities which may be defective or inconsistent with any
other provision herein or to make any other provisions with respect to
matters or questions arising under this Indenture and the Securities;
provided, however, that, in each case, such provisions shall not
materially adversely affect the interests of the Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 9.05 hereof or otherwise;
(e) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder; or
(f) to mortgage, pledge, hypothecate or grant a security interest in
any property or assets in favor of the Trustee for the benefit of the
Holders as security for the payment and performance of the Indenture
Obligations;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such change, agreement or waiver does not materially
adversely affect the interests or legal rights of any Holders.
Section 9.02. Supplemental Indentures, Agreements and
Waivers with Consent of Holders.
With the written consent of the Holders of not less than a majority
in aggregate principal amount of the Outstanding Securities delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto
satisfactory to the Trustee for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
the Securities, or of modifying in any manner the rights of the Holders under
this Indenture or the Securities. The Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities may waive compliance by
the Company with any provision of this Indenture or
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the Securities. However, no such supplemental indenture, agreement or
instrument, including any waiver pursuant to Section 5.13, shall, without the
written consent or waiver of the Holder of each Outstanding Security affected
thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, alter the redemption provisions of the Securities or
this Indenture, or change the coin or currency in which any Security or
any premium or the accrued interest thereon is payable, or impair the
right to institute suit for the enforcement of any payment after the
Stated Maturity thereof (or, in the case of a purchase pursuant to Section
10.10 of this Indenture, on or after the applicable purchase date, as the
case may be);
(b) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any 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) or consent provided for in this
Indenture or with respect to any Security;
(c) modify any of the provisions of this Section 9.02 or Sections
5.13 and 5.16, except to increase any such percentage, if applicable
thereto, 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;
(d) consent to the assignment or transfer by the Company of any of
their rights and obligations under this Indenture, the Securities;
(e) following either (x) the mailing of a notice of a Change of
Control Offer or (y) the failure to mail such notice prior to the date set
forth in the first paragraph of Section 10.10, in either case, following
satisfaction of the condition precedent to the mailing of such notice as
set forth in Section 10.10, alter the Company's obligation to purchase
Securities as a result thereof in accor-
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dance with this Indenture or waive any default in the performance thereof;
(f) adversely affect the ranking of the Securities in a manner
adverse to any Holder;
(g) impair the right to institute suit for the enforcement of any
payment on or with respect to the Securities; or
(h) change the currency in which such Securities or any premium or
the interest thereon is payable.
Upon the written request of the Company accompanied by a copy of a
Board Resolution authorizing the execution of any such supplemental indenture or
other agreement, instrument or waiver, 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 or other agreement,
instrument or waiver.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture or other
agreement, instrument or waiver, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures,
Agreements and Waivers.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01 hereof) shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate from each obligor under the Securities entering into
such supplemental indenture, agreement, instrument or waiver, each stating that
the execution of such supplemental indenture, agreement, instrument or waiver
(a) is authorized or permitted by this Indenture and (b) does not violate the
provisions of any agreement or instrument evidencing any other Indebtedness of
the Company or any Subsidiary of the Company. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture, agreement, instrument
or waiver which affects the Trustee's own rights, duties or immunities under
this Indenture, the Securities or otherwise.
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Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture and/or the Securities shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture
and/or the Securities, as the case may be, for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
Section 9.05. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors of the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee upon a Company Order in exchange for Outstanding Securities.
Section 9.07. Record Date.
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. No such consent shall be valid or effective for more
than 90 days after such record date.
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Section 9.08. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security 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, even if a notation of the consent is not made
on any Security. However, any such Holder, or subsequent Holder, may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
An amendment or waiver shall become effective in accordance with its terms and
thereafter bind every Holder.
ARTICLE TEN
COVENANTS
Section 10.01. 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 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan in The City of
New York, State 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 or exchange 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 its Corporate Trust Office will 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 of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
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The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York, State 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, State
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 other office or agency.
Section 10.03. Money for Security Payments To Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of, premium, if any, or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Holders entitled thereto a sum sufficient to pay the principal, premium,
if any, or interest so becoming due until such sums shall be paid to such
persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, on
or before each due date of the principal of, premium, if any, or interest on,
any Securities, deposit with a Paying Agent a sum in same day funds sufficient
to pay the principal, premium, if any, or interest so becoming due, such sum to
be held in trust for the benefit of the Holders entitled to such principal,
premium or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 10.03, 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
Holders entitled thereto until such sums shall be paid to such Holders or
otherwise disposed of as herein provided;
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(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 of, premium, if any, or interest on the Securities;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and
liabilities of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal, premium, if any, or interest has become due and payable shall be
paid to the Company upon receipt of a Company Request therefor, or (if then held
by the Company) will be discharged from such trust; and the Holder of such
Security will 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, will thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and the
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.
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Section 10.04. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory), licenses and franchises of the
Company and each of the Restricted Subsidiaries; provided, however, that the
Company will not be required to preserve any such right, license or franchise 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
the Restricted Subsidiaries as a whole and that the loss thereof is not adverse
in any material respect to the Holders; provided, further, that the foregoing
will not prohibit a sale, transfer or conveyance of a Subsidiary of the Company
or any of its assets in compliance with the terms of this Indenture.
Section 10.05. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed (i) upon the Company or any of its
Subsidiaries or (ii) upon the income, profits or property of the Company or any
of the Restricted Subsidiaries and (b) all material lawful claims for labor,
materials and supplies, which, if unpaid, could reasonably be expected to become
a Lien upon the property of the Company or any of the Restricted Subsidiaries;
provided, however, that the Company will not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicable or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted.
Section 10.06. Maintenance of Properties.
The Company will cause all material properties owned by the Company
or any of the Restricted Subsidiaries or used or held for use in the conduct of
their respective businesses to be maintained and kept in good condition, repair
and working order 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 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 10.06
will prevent the Company from discontinuing the maintenance of any of such
properties if such discontinuance
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is, in the judgment of the Company, desirable in the conduct of its business or
the business of any of the Restricted Subsidiaries and is not disadvantageous in
any material respect to the Holders.
Section 10.07. Insurance.
The Company will at all times keep all of its and the Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company in good faith to be financially sound and responsible,
against loss or damage to the extent that property of similar character is
usually and customarily so insured by corporations similarly situated and owning
like properties.
Section 10.08. Books and Records.
The Company will, and will cause each of the Restricted Subsidiaries
to, keep proper books of record and account, in which full and correct entries
will be made of all financial transactions and the assets and business of the
Company and each Restricted Subsidiary of the Company in accordance with GAAP.
Section 10.09. Provision of Financial Statements.
Whether or not the Company has a class of securities registered
under the Exchange Act, the Company will supply, at their own expense, to each
Holder of the Securities and file with the Trustee within fifteen days after the
Company is required to file the same with the Commission, copies of the annual
reports and quarterly reports and of the information, documents and other
reports which the Company may be required to file with the Commission pursuant
to Section 13(a), 13(c) or 15(d) of the Exchange Act. The Company will also
comply with the other provisions of Section 314(a) of the Trust Indenture Act.
Section 10.10. Change of Control Triggering Event.
In the event of a Change of Control Triggering Event (the date of
such occurrence being the "Change of Control Date"), the Company will notify the
Holders in writing of such occurrence and will make an offer to purchase (the
"Change of Control Offer"), on a business day (the "Change of Control Payment
Date") not later than 90 days following the Change of Control Date, all
Securities then outstanding at a purchase price equal to 101% of the principal
amount thereof plus accrued and
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unpaid interest, if any, to the Change of Control Payment Date. Notice of a
Change of Control Offer shall be mailed by the Company to the Holders not less
than 30 days nor more than 45 days before the Change of Control Payment Date.
The Change of Control Offer is required to remain open for at least 20 business
days and until the close of business on the Change of Control Payment Date.
The notice, which shall govern the terms of the Change of Control
Offer, shall include such disclosures as are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to this
Section 10.10 and that all Securities tendered into the Change of Control
Offer will be accepted for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Security, the Change of Control Purchase Date and the date
on which the Change of Control Offer expires;
(c) that any Security not tendered for payment will continue to
accrue interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Security accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date;
(e) that Holders electing to have Securities purchased pursuant to a
Change of Control Offer will be required to surrender their Securities to
the Paying Agent at the address specified in the notice prior to 5:00
p.m., New York City time, on the Change of Control Purchase Date and must
complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(f) that Holders of Securities will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Change of Control Purchase Date, a facsimile
transmission or letter setting forth the name of the Holders, the
principal amount of Securities the Holders delivered for purchase, the
Security certificate number (if any) and a statement
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that such Holder is withdrawing his election to have such Securities
purchased;
(g) that Holders whose Securities are purchased only in part will be
issued Securities of like tenor equal in principal amount to the
unpurchased portion of the Securities surrendered;
(h) the instructions that Holders must follow in order to tender
their Securities; and
(i) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the
Commission pursuant to the Exchange Act (or, if the Company is not
required to file any such reports with the Commission, the comparable
reports prepared pursuant to Section 10.09), a description of material
developments in the Company's business, information with respect to pro
forma historical financial information after giving effect to such Change
of Control and such other information concerning the circumstances and
relevant facts regarding such Change of Control and Change of Control
Offer as would, in the good faith judgment of the Company, be material to
a Holder of Securities in connection with the decision of such Holder as
to whether or not it should tender Securities pursuant to the Change of
Control Offer.
On the Change of Control Purchase Date, the Company will (i) accept
for payment Securities or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent money, in immediately
available funds, sufficient to pay the purchase price of all Securities or
portions thereof so tendered and accepted and (iii) deliver to the Trustee the
Securities so accepted together with an Officers' Certificate setting forth the
Securities or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent will promptly mail or deliver to the Holders of
Securities so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security of like tenor equal in principal amount to any unpurchased portion of
the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company will
publicly announce the results of the Change of Control Offer not later than the
first Business Day following the Change of Control Purchase Date.
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The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act, and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 10.10, the
Company will comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 10.10 by
virtue thereof.
Section 10.11. Limitation on Additional Indebtedness.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, incur any Indebtedness (including any Acquired Indebtedness)
except for:
(a) the Securities;
(b) Indebtedness (including letters of credit) of the Company and
the Restricted Subsidiaries under the Senior Credit Facility in an
aggregate principal amount not to exceed $800 million;
(c) Indebtedness of the Company and the Restricted Subsidiaries
incurred pursuant to Interest Rate Protection Obligations and foreign
exchange contracts, currency swaps or similar agreements;
(d) Indebtedness between and among the Company and the Restricted
Subsidiaries or between and among any of the Restricted Subsidiaries;
(e) Capitalized Lease Obligations and Purchase Money Indebtedness of
the Company and the Restricted Subsidiaries, in each case with respect to
the acquisition after the Issue Date of Productive Assets;
(f) Indebtedness of the Company and the Restricted Subsidiaries
resulting from the endorsement of negotiable instruments in the ordinary
course of business;
(g) replacements, renewals, refinancings and extensions of
Indebtedness outstanding on the Issue Date (other than any Indebtedness to
be repaid or retired with the net proceeds from the sale of the
Securities) and Indebtedness incurred or permitted in compliance with
clauses (a), (e) and (i) of this Section 10.11; provided that the
principal amount of Indebtedness incurred pursuant to this
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clause (g) (or, if such Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of such
Indebtedness) shall not exceed the sum of the principal amount of
Indebtedness so refinanced (or, if such Indebtedness provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof, the original issue
price of such Indebtedness, plus any accreted value attributable thereto
since the original issuance of such Indebtedness), plus the amount of any
premium required to be paid in connection with such replacement, renewal,
refinancing or extension pursuant to the terms of such Indebtedness or the
amount of any premium reasonably determined by the Company or the
Restricted Subsidiary, as applicable, as necessary to accomplish such
replacement, renewal, refinancing or extension by means of a tender offer
or privately negotiated purchase, plus the amount of fees and expenses in
connection therewith;
(h) unsecured Indebtedness of the Company and the Restricted
Subsidiaries not exceeding $100 million in aggregate principal amount
outstanding at any time;
(i) Indebtedness of the Company and the Restricted Subsidiaries
secured by a Lien on accounts receivable of the Company and the Restricted
Subsidiaries in an aggregate principal amount not to exceed 85% of the
face amount of outstanding accounts receivable of the Company and such
Restricted Subsidiaries; and
(j) other Indebtedness of the Company and the Restricted
Subsidiaries, if at the time of and after giving pro forma effect to the
incurrence of such Indebtedness (including the application of the proceeds
thereof) and any Asset Acquisitions and any Asset Sales that occurred
during the period beginning four full fiscal quarters immediately prior to
such incurrence as though such events occurred on the first day of such
period, the Consolidated EBITDA Coverage Ratio for such four fiscal
quarter period of the Company is equal to or greater than 1.75:1.0.
For purposes of determining compliance with this Section 10.11 in
the event that an item of Indebtedness meets the criteria of more than one of
the types of Indebtedness permitted by this Section 10.11, the Company in its
sole discretion shall classify such item of Indebtedness and only be required
<PAGE> 92
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to include the amount of such Indebtedness as one of such types.
Section 10.12. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, within 95 days after
the end of each fiscal year of the Company ending after the date hereof, a
written statement signed by the chairman or a chief executive officer, the
principal financial officer or principal accounting officer of the Company,
stating (i) that a review of the activities of the Company during the preceding
fiscal year has been made under the supervision of the signing officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and (ii) that, to the knowledge
of each officer signing such certificate, the Company has kept, observed,
performed and fulfilled each and every covenant and condition contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions, conditions and covenants hereof (or, if a Default shall have
occurred, describing all such Defaults of which such officers may have
knowledge, their status and what action the Company is taking or proposes to
take with respect thereto).
(b) When any Default has occurred and is continuing, or if the
Trustee or any Holder or the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Restricted Subsidiary gives any notice or
takes any other action with respect to a claimed default (other than with
respect to Indebtedness (other than Indebtedness evidenced by the Securities) in
the principal amount of less than $5,000,000), the Company will promptly notify
a Responsible Officer of the Trustee of such Default, notice or action and will
deliver to the Trustee by registered or certified mail or by telegram, or
facsimile transmission followed by hard copy by registered or certified mail an
Officers' Certificate specifying such event, notice or other action within five
Business Days after the Company becomes aware of such occurrence and what action
the Company is taking or proposes to take with respect thereto.
Section 10.13. Limitation on Liens.
The Company and the Restricted Subsidiaries will not, directly or
indirectly, incur any consensual Lien to secure Indebtedness, other than
Permitted Liens, upon any of their property or assets owned or acquired on or
after the Issue Date unless (i) where such Lien secures Indebtedness ranking
pari passu with the applicable Securities, excluding Indebtedness under the
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Senior Credit Facility, all payments due under this Indenture and the Securities
are secured on an equal and ratable basis with the obligations so secured until
such time as such obligation is no longer secured by a Lien, or (ii) where such
Lien secures Subordinated Indebtedness, the Securities are secured by a Lien on
such property or assets that is senior in priority to the Lien securing such
Subordinated Indebtedness. Any Lien which secures the Securities shall
automatically and unconditionally be released upon the release or discharge of
the Lien which resulted in the creation of such Lien with respect to the
Securities, except a discharge or release by or as a result of foreclosure on
the subject collateral.
Section 10.14. Limitation on Designations of Unrestricted
Subsidiaries.
The Company may designate after the Issue Date any Subsidiary as an
"Unrestricted Subsidiary" under this Indenture (a "Designation") only if:
(a) no Default shall have occurred and be continuing at the time of
or after giving effect to such Designation; and
(b) the Company would be permitted under this Indenture to incur
$1.00 of additional Indebtedness pursuant to clause (j) of Section 10.11
at the time of such Designation (assuming the effectiveness of such
Designation).
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by Board
Resolutions delivered to the Trustee together with an Officers' Certificate
certifying compliance with the foregoing provisions. Any Receivables Subsidiary
shall at all times be an Unrestricted Subsidiary and each of WPSI Inc. and
Alamac Sub Holdings Inc. shall initially constitute an Unrestricted Subsidiary.
<PAGE> 94
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Section 10.15. Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, enter into after the Issue Date any arrangement with any Person
providing for the leasing to the Company or any such Restricted Subsidiary of
any real or tangible personal property (except for leases between or among the
Company and any of the Restricted Subsidiaries), which property has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person in contemplation of such leasing (a "Sale/Leaseback Transaction"), unless
(a) the Company or such Restricted Subsidiary would be entitled under either
clause (g) of Section 10.11 or would be entitled under clause (j) of Section
10.11 to incur Indebtedness in an amount equal to the Attributable Indebtedness
with respect to such arrangement and (b) the gross proceeds of any such sale are
at least equal to the Fair Market Value of such property.
Section 10.16. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company and any other
obligor on the Securities will furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenants compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with, and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents,
certificates 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 with respect to compliance with a
condition or covenant provided for in this Indenture will include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements
<PAGE> 95
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or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether such covenant or condition
has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 10.17. Application of Fall Away Covenants.
If no Default has occurred and is continuing, after the ratings
assigned to the Securities by any two of the Rating Agencies are equal to or
higher than BBB- and Baa3, or the equivalents thereof, as applicable (the
"Investment Grade Ratings"), and notwithstanding that the Securities may later
cease to have an Investment Grade Rating, the Company and the Restricted
Subsidiaries will not be subject to the provisions of this Indenture governing
such Securities described in Section 10.11, clause (b) of the first paragraph of
Section 10.14 and clause (v) of the first paragraph of Section 8.01(a).
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.01. Right of Redemption.
The Securities will be redeemable, in whole or in part, at the
option of the Company at 100% of the principal amount thereof plus the
Make-Whole Premium, together with all accrued and unpaid interest thereon. The
Securities are not subject to redemption through the operation of a sinking
fund.
Section 11.02. 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.
<PAGE> 96
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Section 11.03. Election To Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 11.01 shall be evidenced by a Board Resolution and an Officers'
Certificate. In case of any redemption at the election of the Company, the
Company shall, at least 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 11.04. Selection by Trustee of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are then listed or, if the Securities are not
then listed on a national securities exchange, on pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days prior
to the redemption date to each Holder of the Securities to be redeemed at its
registered address. If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on the Securities or portions thereof called
for redemption.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for partial redemption and 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.
<PAGE> 97
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Section 11.05. Notice of Redemption.
Notice of redemption will 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 the address of such Holder
appearing in the Security Register.
All notices of redemption will fully identify the Securities and
will state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) if less than all Outstanding Securities are to be redeemed,
the identification of the particular Securities to be redeemed;
(iv) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date
upon surrender of such Security, a new Security or Securities in the
aggregate principal amount equal to the unredeemed portion thereof shall
be issued;
(v) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(vi) that on the Redemption Date the Redemption Price shall become
due and payable upon each such Security or portion thereof, and that
(unless the Company shall default in payment of the Redemption Price)
interest thereon shall cease to accrue on and after said date;
(vii) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(viii) the CUSIP number relating to such Securities; and
(ix) the paragraph of the Securities pursuant to which the
Securities are being redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company will be given by the Company or, at
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the Company's written request, by the Trustee in the name and at the expense of
the Company.
The notice if mailed in the manner herein provided will 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 will not affect the validity of the proceedings for the redemption of
any other Security.
Section 11.06. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company will deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.03) an
amount of money in same day funds sufficient to pay the Redemption Price of, and
accrued interest on, all the Securities or portions thereof which are to be
redeemed on that date.
Section 11.07. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed will, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Securities
will cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security will be paid by the Company at the
Redemption Price; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date will 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 3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate then borne by
such Security.
Section 11.08. 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
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office or agency maintained for such purpose pursuant to Section 10.02 (with, if
the Company, the Security Registrar or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to, the Company,
the Security Registrar or the Trustee duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed or purchased.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
surviving rights or registration of transfer or exchange of Securities herein
expressly provided for) and the Trustee, on written demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when either
(a) all Securities theretofore authenticated and delivered (other
than (A) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.06 hereof and (B) Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 10.03) have been delivered to the
Trustee for cancellation; or
(b) (i) all such Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee in trust an amount of money
in dollars sufficient to pay and discharge the entire Indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for the
principal of, premium, if any, and interest to the date of such deposit;
<PAGE> 100
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(ii) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee (i) irrevocable
instructions to apply the deposited money toward payment of the Securities
at the Stated Maturities and the Redemption Dates thereof, and (ii) an
Officers' Certificate and an Opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 12.01, the obligations of the Trustee under Section 12.02 and the last
paragraph of Section 10.03 shall survive such satisfaction and discharge.
Section 12.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03,
all money deposited with the Trustee pursuant to Section 12.01 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the persons entitled thereto, of the principal of, premium, if
any, and interest on the Securities for whose payment such money has been
deposited with the Trustee.
<PAGE> 101
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
WESTPOINT STEVENS INC.
By: /s/ Morgan M. Schuessler
-----------------------------------
Name: Morgan M. Schuessler
Title: Vice President - Finance
and Chief Financial Officer
By: /s/ Christopher N. Zodrow
-----------------------------------
Name: Christopher N. Zodrow
Title: Vice President and Secretary
THE BANK OF NEW YORK,
as Trustee
By: /s/ Robert A. Massimillo
-----------------------------------
Name: Robert A. Massimillo
Title: Assistant Vice President
<PAGE> 102
EXHIBIT A-1
[Form of Security].
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
"OFFSHORE TRANSACTION" PURSUANT TO REGULATION S, (2) AGREES THAT IT WILL NOT
PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS PERMITTED BY
RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS
SECURITY) OR THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF THIS SECURITY OR (Y) SUCH
LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE
RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF
REGULATION S, (E) TO AN ACCREDITED INVESTOR THAT IS ACQUIRING THE SECURITIES FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
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<PAGE> 103
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-1-2
<PAGE> 104
WESTPOINT STEVENS, INC.
-----------------
7 7/8% SENIOR NOTES DUE 2008
CUSIP No. __________
No. ___________ $
WESTPOINT STEVENS INC., a corporation incorporated under the laws of
the State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________ or registered assigns, the
principal sum of _______________ Dollars on June 15, 2008, at the office or
agency of the Company referred to below, and to pay interest thereon on June 15
and December 15 (each an "Interest Payment Date"), of each year, commencing on
December 15, 1998, accruing from the Issue Date or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 7 7/8% per annum, until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, 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 June
1 or December 1 (each a "Regular Record Date"), whether or not a Business Day,
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which 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
ex-
A-1-3
<PAGE> 105
change on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State 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.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
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<PAGE> 106
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof 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.
Dated: WESTPOINT STEVENS INC.
By:
-----------------------------------
Name:
Title:
A-1-5
<PAGE> 107
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the 7 7/8% Senior Notes due 2008, Series A, referred
to in the within-mentioned Indenture.
Dated:
----------------------------------
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------------
Authorized Signatory
A-1-6
<PAGE> 108
[REVERSE OF SECURITY]
1. Indenture. This Security is one of a duly authorized issue of
Securities of the Company designated as its 7 7/8% Senior Notes due 2008, Series
A (herein called the "Initial Securities"). The Securities are limited (except
as otherwise provided in the Indenture referred to below) in aggregate principal
amount to $475,000,000, which may be issued under an indenture (herein called
the "Indenture") dated as of June 9, 1998, by and among the Company and The Bank
of New York, as trustee (herein called the "Trustee," which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities include the Initial Securities, the Private Exchange Securities and
the Exchange Securities, issued in exchange for the Initial Securites pursuant
to the Registration Rights Agreement. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture.
All capitalized 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.
The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
2. Registration Rights. Pursuant to the Registration Rights
Agreement by and among the Company and the Initial
A-1-7
<PAGE> 109
Purchasers, the Company will be obligated to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Security for 7 7/8% Senior Notes due 2005, Series B, of the Company (herein
called the "Exchange Securities"), which have been registered under the
Securities Act, in like principal amount and having identical terms as the
Securities (other than as set forth in this paragraph). The Holders of
Securities shall be entitled to receive certain additional interest payments in
the event such exchange offer is not consummated and upon certain other
conditions, all pursuant to and in accordance with the terms of the Registration
Rights Agreement.
3. Redemption. The Securities will be redeemable, in whole or in
part, at the option of the Company at 100% of the principal amount thereof plus
the Make-Whole Premium, together with all accrued and unpaid interest thereon.
The Securities are not subject to redemption through the operation of a sinking
fund.
If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are the listed or, if the Securities are not
then listed on a national securities exchange, on pro forma basis, by lot or by
such method as the Trustee shall deem fair and appropriate. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days prior
to the redemption date to each Holder of the Securities to be redeemed at its
registered address. If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on the Securities or portions thereof called
for redemption.
4. Offers to Purchase. Section 10.10 of the Indenture provides that
upon the occurrence of a Change of Control Triggering Event, and subject to
certain conditions and limitations contained therein, the Company shall make an
offer to purchase all or a portion of the Securities in accordance with the
procedures set forth in the Indenture.
A-1-8
<PAGE> 110
5. Defaults and Remedies. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Securities, plus all accrued
and unpaid interest, if any, to and including the date the Securities are paid,
may be declared due and payable in the manner and with the effect provided in
the Indenture.
6. Defeasance. The Indenture contains provisions (which provisions
apply to this Security) for defeasance at any time of (a) the entire
indebtedness of the Company and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company with
certain conditions set forth therein.
7. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past Defaults under the Indenture and this Security and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Security.
8. Denominations, Transfer and Exchange. The Securities are issuable
only in registered form without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
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 of-
A-1-9
<PAGE> 111
fice or agency of the Company maintained for such purpose in the Borough of
Manhattan in The City of New York, State 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 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.
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.
9. Persons Deemed Owners. Prior to and at the time of due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.
10. Termination of Certain Covenants. After the Securities have been
assigned an Investment Grade Rating by any two of the Rating Agencies, and
notwithstanding that the Securities may later cease to have an Investment Grade
Rating, the Company and the Restricted Subsidiaries will no longer be subject to
the provisions of Sections 10.11, clause (b) of the first paragraph of Section
10.14 and clause (v) of the first paragraph of Section 8.01(a) of the Indenture;
provided, that no Default has occurred and is continuing at the time the
Securities have been assigned such rating.
11. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
WestPoint Stevens Inc., 1185 Avenue of the Americas, 11th Floor, New York, New
York 10036.
A-1-10
<PAGE> 112
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(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 such agent.
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), covering resales of this
Security (which effectiveness shall not have been suspended or terminated at the
date of the transfer) and (ii) the date two years (or such shorter period of
time as permitted by Rule 144 under the Securities Act or any successor
provision thereunder) after the later of the original issuance date appearing on
the face of this Security (or any Predecessor Security) or the last date on
which the Company or any Affiliate of the Company was the owner of this Security
(or any Predecessor Security), the undersigned confirms that it has not utilized
any general solicitation or general advertising in connection with the transfer
and that:
[Check One]
A-1-11
<PAGE> 113
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act provided by
Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in accordance
with (a) above and documents, including (i) a transferee certificate
substantially in the form of Exhibit C to the Indenture in the case
of a transfer to non-QIB Accredited Investors or (ii) a transferor
certificate substantially in the form of Exhibit D to the Indenture
in the case of a transfer pursuant to Regulation S, are being
furnished which comply with the conditions of transfer set forth in
this Security and the Indenture.
If none of the foregoing boxes is checked and, in the case of (b) above, if the
appropriate document is not attached or otherwise furnished to the Trustee, the
Trustee or Registrar shall not be obligated to register this Security in the
name of any person other than the Holder hereof unless and until the conditions
to any such transfer of registration set forth herein and in Section 3.17 of the
Indenture shall have been satisfied.
- --------------------------------------------------------------------------------
Date: Your signature:
--------------- ------------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
By:
---------------------------------------
NOTICE: To be executed by an executive
officer
Signature Guarantee:
--------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
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 "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on
A-1-12
<PAGE> 114
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A (including the
information specified in Rule 144A(d)(4)) or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
--------------------- --------------------------------------------
NOTICE: To be executed by
an executive officer
A-1-13
<PAGE> 115
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 10.10 of the Indenture, check the appropriate box:
Section 10.10 [ ]
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 10.10 of the Indenture, state the amount:
$
--------------
Date: Your signature:
----------------- ---------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
By:
------------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
------------------------
A-1-14
<PAGE> 116
Exhibit A-2
WESTPOINT STEVENS INC.
-----------------
7 7/8% SENIOR NOTES DUE 2008
CUSIP No. __________
No. ___________ $
WESTPOINT STEVENS INC., a corporation incorporated under the laws of
the State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________ or registered assigns, the
principal sum of _______________ Dollars on June 15, 2008, at the office or
agency of the Company referred to below, and to pay interest thereon on June 15
and December 15 (each an "Interest Payment Date"), of each year, commencing on
December 15, 1998, accruing from the Issue Date or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 7 7/8% per annum, until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, 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 June
1 or December 1 (each a "Regular Record Date"), whether or not a Business Day,
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Securities, to the
extent lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such defaulted interest to be fixed by
the Trustee, notice of which shall be given to Holders of Securities not less
than 10 days prior to such Special Rec-
A-2-1
<PAGE> 117
ord 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 such Indenture.
Payment of the principal of, premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State 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.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof.
A-2-2
<PAGE> 118
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof 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.
Dated: WESTPOINT STEVENS INC.
By:
-----------------------------------------
Name:
Title:
A-2-3
<PAGE> 119
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the 7 7/8% Senior Notes due 2008, Series B, referred
to in the within-mentioned Indenture.
Dated:
--------------------------------------
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------------------
Authorized Signatory
A-2-4
<PAGE> 120
REVERSE OF SECURITY
1. Indenture. This Security is one of a duly authorized issue of
Securities of the Company designated as its 7 7/8% Senior Notes due 2008, Series
B (herein called the "Exchange Securities"). The Securities are limited (except
as otherwise provided in the Indenture referred to below) in aggregate principal
amount to $475,000,000, which may be issued under an indenture (herein called
the "Indenture") dated as of June 9, 1998, by and among the Company and The Bank
of New York, as trustee (herein called the "Trustee," which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
Securities include the Initial Securities, the Private Exchange Securities and
the Exchange Securities, issued in exchange for the Initial Securities pursuant
to the Registration Rights Agreement. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture.
All capitalized 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.
The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date of
the Indenture. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest on this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
2. Redemption. The Securities will be redeemable, in whole or in
part, at the option of the Company at 100% of
A-2-5
<PAGE> 121
the principal amount thereof plus the Make-Whole Premium, together with all
accrued and unpaid interest thereon. The Securities are not subject to
redemption through the operation of a sinking fund.
If less than all of the Securities are to be redeemed at any time,
selection of such Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are the listed or, if the Securities are not
then listed on a national securities exchange, on pro forma basis, by lot or by
such method as the Trustee shall deem fair and appropriate. Notice of redemption
shall be mailed by first-class mail at least 30 but not more than 60 days prior
to the redemption date to each Holder of the Securities to be redeemed at its
registered address. If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on the Securities or portions thereof called
for redemption.
3. Offers to Purchase. Section 10.10 of the Indenture provides that
upon the occurrence of a Change of Control Triggering Event, and subject to
certain conditions and limitations contained therein, the Company shall make an
offer to purchase all or a portion of the Securities in accordance with the
procedures set forth in the Indenture.
4. Defaults and Remedies. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Securities, plus all accrued
and unpaid interest, if any, to and including the date the Securities are paid,
may be declared due and payable in the manner and with the effect provided in
the Indenture.
5. Defeasance. The Indenture contains provisions (which provisions
apply to this Security) for defeasance at any time of (a) the entire
indebtedness of the Company and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company with
certain conditions set forth therein.
A-2-6
<PAGE> 122
6. Amendments and Waivers. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past Defaults under the Indenture and this Security and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent or waiver is made upon this Security.
7. Denominations, Transfer and Exchange. The Securities are issuable
only in registered form without coupons in denominations of $1,000 and any
integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
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 Borough of Manhattan in The City of New York, State 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 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.
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
A-2-7
<PAGE> 123
tax or other governmental charge payable in connection therewith.
8. Persons Deemed Owners. Prior to and at the time of due
presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security shall be overdue, and neither the Company, the
Trustee nor any agent shall be affected by notice to the contrary.
9. Termination of Certain Covenants. After the Securities have been
assigned an Investment Grade Rating by any two of the Rating Agencies, and
notwithstanding that the Securities may later cease to have an Investment Grade
Rating, the Company and the Restricted Subsidiaries will no longer be subject to
the provisions of Sections 10.11, clause (b) of the first paragraph of Section
10.14 and clause (v) of the first paragraph of Section 8.01(a) of the Indenture;
provided, that no Default has occurred and is continuing at the time the
Securities have been assigned such rating.
10. GOVERNING LAW. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
WestPoint Stevens Inc., 1185 Avenue of the Americas, 11th Floor, New York, New
York 10036.
A-2-8
<PAGE> 124
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(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 such agent.
Date: Your signature:
-------------------- ---------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
By:
------------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
--------------------
A-2-9
<PAGE> 125
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant
to Section 10.10 of the Indenture, check the box: [ ]
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 10.10 of the Indenture, state the amount:
$
-------------------
Date: Your signature:
-------------------- ---------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
By:
------------------------------------
NOTICE: To be executed by an
executive officer
Signature Guarantee:
--------------------
A-2-10
<PAGE> 126
EXHIBIT B
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
COMPANY 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.
B-1
<PAGE> 127
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
WestPoint Stevens Inc.
1185 Avenue of the Americas
11th Floor
New York, NY 10036
Ladies and Gentlemen:
In connection with our proposed purchase of $ aggregate principal
amount of the 7 7/8% Senior Notes due 2008 (the "Securities") of WestPoint
Stevens Inc. (the "Company"), we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and, unless
so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account
for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to (x) the date which is two years (or such
shorter period of time as permitted by Rule 144 under the Securities Act)
after the later of the date of original issue of the Securities and (y)
such later date, if any, as may be required by any subsequent change in
applicable law (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) so long as the Securities are
eligible for resale pursuant to Rule 144A under the Securities Act, to a
person we reasonably believe is a "qualified institutional buyer" under
Rule 144A (a "QIB") that purchases for its own account or for the account
of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside
the United States to "foreign purchasers" (as defined below) in offshore
transactions meeting the requirements of Rule 904 of Regulation S under
the Securities Act, (e) to an institutional "accredited investor" within
the meaning of sub-
C-1
<PAGE> 128
paragraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (an
"Accredited Investor") that is purchasing for its own account or for the
account of such an institutional "accredited investor," or (f) pursuant to
any other available exemption from the registration requirements of the
Securities Act, subject, in each of the foregoing cases, to any
requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their
control and to compliance with any applicable state securities laws. The
foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes
is proposed to be made pursuant to clause (c) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Trustee,
which shall provide, among other things, that the transferee is an
Accredited Investor within the meaning of subparagraph (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act and that it is acquiring such
Securities for investment purposes and not for distribution in violation
of the Securities Act. Each purchaser acknowledges that the Company, the
Trustee and the Transfer Agent and Registrar reserve the right prior to
any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (d), (e) or (f)
above to require the delivery of an opinion of counsel, certification
and/or other information satisfactory to the Company and the Trustee.
2. We are an Accredited Investor or a QIB purchasing Notes for our
own account or for the account of one or more Accredited Investors, and we
are acquiring the Securities for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution in violation
of the Securities Act or the securities laws of any state of the United
States and we have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its investment in
the Securities for an indefinite period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each
C-2
<PAGE> 129
of which we exercise sole investment discretion and we and any such
account are (a) a QIB, aware that the sale is being made in reliance on
Rule 144A under the Securities Act, (b) an Accredited Investor, or (c) a
person other than a U.S. person ("foreign purchasers"), which term shall
include dealers or other professional fiduciaries in the United States
acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust) in offshore transactions meeting the requirements of
Rules 903 and 904 of Regulation S under the Securities Act.
4. We have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary in order to verify the information contained in the Offering
Memorandum.
5. We are not purchasing the Securities for or on behalf of, and
will not transfer the Securities to, any pension or welfare plan (as
defined in Section 3 of ERISA, except as may be permitted under ERISA and
as described under "Notice to Investors" in the Offering Memorandum.
6. In the event that we purchase any Securities, we will acquire
Securities having an outstanding principal amount of at least $250,000 for
our own account and $250,000 for each account for which we are acting.
We understand that the Trustee and the Transfer Agent will not be
required to accept for registration of transfer any Securities acquired by us,
except upon presentation of evidence satisfactory to the Company and the Trustee
that the foregoing restrictions on transfer have been complied with. We further
understand that the Securities purchased by us will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph. We further agree to provide to any person
acquiring any of the Securities from us a notice advising such person that
transfers of such Securities are restricted as stated herein and that
certificates representing such Securities will bear a legend to that effect.
We represent that you, the Company, the Trustee and others are
entitled to rely upon the truth and accuracy of our acknowledgements,
representations and agreements set forth
C-3
<PAGE> 130
herein, and we agree to notify you promptly in writing if any of our
acknowledgements, representations or agreements herein cease to be accurate and
complete. You are also irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
We represent to you that we have full power to make the foregoing
acknowledgements, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as fiduciary agent.
As used herein, the terms "offshore transaction," "United States"
and "U.S. person" have the respective meanings given to them in Regulation S
under the Securities Act.
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 Securities would be registered in the name of the
new beneficial owner as follows:
Name:______________________________
Address:___________________________
C-4
<PAGE> 131
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------------
--------------, ----
The Bank of New York
101 Barclay Street, Floor 21 West
New York, NY 10286
Attention: Corporate Trust Trustee Administration
Re: WestPoint Stevens Inc.
(the "Company") 7 7/8% Senior Notes due 2008
(the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate
principal amount at maturity of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
D-1
<PAGE> 132
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities; and
(6) if the circumstances set forth in Rule 904(c) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Securities may be offered and sold during
the restricted period specified in Rule 903(c)(2) or (3), as applicable;
in accordance with the provisions of Regulation S; pursuant to
registration of the Securities under the Securities Act; or pursuant to an
available exemption from the registration requirements under the
Securities Act.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-----------------------------------------
Authorized Signature
D-2
<PAGE> 1
EXHIBIT 4(h)
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of June 9, 1998
by and among
WESTPOINT STEVENS INC.
and
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
GOLDMAN, SACHS & CO.,
NATIONSBANC MONTGOMERY SECURITIES LLC,
BNY CAPITAL MARKETS, INC.,
FIRST CHICAGO CAPITAL MARKETS, INC., and
SCOTIA CAPITAL MARKETS
================================================================================
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of June 9, 1998 by and among MERRILL LYNCH & CO., MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED ("Merrill Lynch"), Goldman, Sachs & Co.,
Nationsbanc Montgomery Securities LLC, BNY Capital Markets, Inc., First Chicago
Capital Markets, Inc. and Scotia Capital Markets (together with Merrill Lynch,
the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated as
of June 3, 1998, by and among WestPoint Stevens Inc., a Delaware corporation
(the "Company"), and the Initial Purchasers (the "Purchase Agreement"), which
provides for, among other things, the sale by the Company to the Initial
Purchasers of $475,000,000 aggregate principal amount of the Company's 7 7/8%
Senior Notes due 2008 (the "Securities"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Additional Interest" shall have the meaning set forth in Section
2(e) hereof.
"Advice" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"Applicable Period" shall have the meaning set forth in Section 3(s)
hereof.
"Business Day" shall mean a day that is not a Saturday, a Sunday, or
a day on which banking institutions in New York, New York are required to
be closed.
"Closing Time" shall mean the Closing Time as defined in the
Purchase Agreement.
<PAGE> 3
-2-
"Company" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted
assigns.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; provided, however, that such
depositary must have an address in the Borough of Manhattan, in The City
of New York.
"Effectiveness Period" shall have the meaning set forth in Section
2(b) hereof.
"Effectiveness Target Date" shall have the meaning set forth in
Section 2(e) hereof.
"Event Date" shall have the meaning set forth in Section 2(e)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Securities pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on an appropriate form under the Securities Act,
and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a)
hereof.
"Exchange Securities" shall mean the 7 7/8% Senior Notes due 2008,
issued by the Company to be offered to Holders of Securities in exchange
for Securities pursuant to the Exchange Offer, which shall be identical to
the Securities (except that (i) interest thereon shall accrue from the
last date on which interest was paid on the Securities or, if no such
interest has been paid, from the Issue Date, (ii) the transfer
restrictions thereon and all
<PAGE> 4
-3-
registration rights in respect thereof shall be eliminated and (iii) the
provisions relating to Additional Interest shall be eliminated).
"Holders" shall mean the Initial Purchasers, for so long as they own
any Registrable Securities, each of their direct and indirect successors,
assigns and transferees who become registered owners of Registrable
Securities under the Indenture and each Participating Broker-Dealer that
holds Exchange Securities for so long as such Participating Broker-Dealer
is required to deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Securities.
"Indenture" shall mean the Indenture relating to the Securities
dated as of June 9, 1998 between the Company and The Bank of New York, as
trustee, as the same may be amended from time to time in accordance with
the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble to this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(m)
hereof.
"Issue Date" shall mean the date on which the Securities are
originally issued.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities.
"Participating Broker-Dealer" shall have the meaning set forth in
Section 3(s) hereof.
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a)
hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2(a) hereof.
<PAGE> 5
-4-
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus
as amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Records" shall have the meaning set forth in Section 3(m) hereof.
"Registrable Securities" shall mean the Securities and, if issued,
the Private Exchange Securities; provided, however, that Securities and,
if issued, the Private Exchange Securities, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such
Securities shall have been declared effective under the 1933 Act and such
Securities shall have been disposed of pursuant to such Registration
Statement, (ii) such Securities have been sold to the public pursuant to
Rule 144 (or any similar provision then in force, but not Rule 144A) under
the 1933 Act, (iii) such Securities shall have ceased to be outstanding or
(iv) the Exchange Offer is consummated (except in the case of Securities
purchased from the Company and continued to be held by the Initial
Purchasers).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all applicable SEC, stock exchange or National
Association of Securities Dealers, Inc. (the "NASD") registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable
fees and disbursements of one counsel for Holders that are Initial
Purchasers in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the
rules of the NASD, (iii) all applicable expenses incurred by the Company
in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus and any amend-
<PAGE> 6
-5-
ments or supplements thereto, and in preparing or assisting in preparing
any other documents relating to the performance of and compliance with
this Agreement, (iv) all rating agency fees, if any, (v) the fees and
disbursements of counsel for the Company, (vii) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Securities on any securities exchange or exchanges, if the Company, in its
discretion, elects to make any such listing; but excluding fees of counsel
to the Holders and underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.
"Registration Statement" shall mean any registration statement
(including, without limitation, the Exchange Offer Registration Statement
and the Shelf Registration Statement) of the Company which covers any of
the Exchange Securities or Registrable Securities pursuant to the
provisions of this Agreement, and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to
this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company relating to a "shelf" offering in accordance with
Rule 415 of the Securities Act, or any similar rule that may be adopted by
the SEC, pursuant to the provisions of Section 2(b) hereof which covers
all of the Registrable Securities or all of the Private Exchange
Securities, as the case may be, on an appropriate form under the
Securities Act, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
<PAGE> 7
-6-
"TIA" shall have the meaning set forth in Section 3(k) hereof.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
2. Registration Under the Securities Act.
(a) Exchange Offer. To the extent not prohibited by any applicable law or
applicable policy of the SEC, the Company shall, for the benefit of the Holders,
at the Company's cost, use its best efforts to (i) cause to be filed with the
SEC within 60 days after the Issue Date an Exchange Offer Registration Statement
on an appropriate form under the Securities Act covering the offer by the
Company to the Holders to exchange all of the Registrable Securities (other than
Private Exchange Securities) for a like principal amount of Exchange Securities,
(ii) have such Exchange Offer Registration Statement declared effective under
the Securities Act by the SEC not later than the date which is 120 days after
the Issue Date, (iii) have such Registration Statement remain effective until
the closing of the Exchange Offer and (iv) commence the Exchange Offer and, on
or prior to 30 Business Days after the date on which the Exchange Offer
Registration Statement was declared effective by the SEC, issue Exchange
Securities in exchange for all Securities properly tendered prior thereto in the
Exchange Offer. Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder eligible and electing to
exchange Registrable Securities (other than Private Exchange Securities) for
Exchange Securities (assuming that such Holder is not an affiliate of the
Company within the meaning of Rule 405 under the Securities Act and is not a
broker-dealer tendering Registrable Securities acquired directly from the
Company for its own account, acquires the Exchange Securities in the ordinary
course of such Holder's business and has no arrangements or understandings with
any Person to participate in the Exchange Offer for the purpose of distributing
(within the meaning of the Securities Act) the Exchange Securities) and to
transfer such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act and under state securities
or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement,
<PAGE> 8
-7-
together with an appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 20 Business Days after the date of notice thereof is mailed to
the Holders (or longer if required by applicable law) (such period
referred to herein as the "Exchange Period");
(iii) utilize the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the
notice, a facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Securities delivered for exchange, and a
statement that such Holder is withdrawing his election to have such
Securities exchanged; and
(v) otherwise comply in all material respects with all applicable
laws relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company upon the request of
any such Initial Purchaser shall, to the extent not prohibited by any applicable
law or applicable policy of the SEC, use its best efforts to simultaneously with
the delivery of the Exchange Securities in the Exchange Offer, issue and deliver
to such Initial Purchaser in exchange (the "Private Exchange") for the
Securities held by such Initial Purchaser, a like principal amount of debt
securities of the Company, that are identical to the Exchange Securities, except
that (i) such securities shall bear appropriate transfer restrictions and (ii)
the registration rights in respect thereof shall continue to apply (the "Private
Exchange Securities").
The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical to all material
respects to the Indenture and which, in either case, has been qualified under
the TIA or is exempt from such qualification and shall provide that the Exchange
Securities shall not be subject to the transfer restrictions set forth in the
Indenture. The Indenture or such indenture shall provide that the Exchange
Securities, the Private
<PAGE> 9
-8-
Exchange Securities and the Securities shall vote and consent together on all
matters as one class and that none of the Exchange Securities, the Private
Exchange Securities or the Securities will have the right to vote or consent as
a separate class on any matter. The Private Exchange Securities shall be of the
same series as, and the Company shall use all commercially reasonable efforts to
have the Private Exchange Securities bear the same CUSIP number as, the Exchange
Securities. Neither the Company nor any of its Subsidiaries shall have any
liability under this Agreement solely as a result of such Private Exchange
Securities not bearing the same CUSIP number as the Exchange Securities.
The Exchange Offer and the Private Exchange shall not be subject to
any conditions, other than that (i) the Exchange Offer or Private Exchange, as
the case may be, does not violate applicable law or any applicable policy of the
SEC, (ii) no action or proceeding shall have been instituted or threatened in
any court or by any governmental agency which might materially impair the
ability of the Company to proceed with the Exchange Offer or the Private
Exchange, and no material adverse development shall have occurred in any
existing action or proceeding with respect to the Company, (iii) all
governmental approvals shall have been obtained, which approvals the Company
deems necessary for the consummation of the Exchange Offer or Private Exchange
and (iv) the due tendering of Registrable Securities in accordance with the
terms of the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and/or
the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all Registrable Securities or portions
thereof properly tendered and not validly withdrawn pursuant to the
Exchange Offer in accordance with the terms of the Exchange Offer
Registration Statement and the letter of transmittal that is an exhibit
thereto;
(ii) accept for exchange all Securities properly tendered pursuant
to the Private Exchange; and
(iii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted
for exchange by the Company, and issue, and cause the Trustee under the
Indenture to promptly authenticate and deliver to each Holder, a new
Exchange Security or Private Exchange Security, as the
<PAGE> 10
-9-
case may be, equal in principal amount to the principal amount of the
Registrable Securities surrendered by such Holder and accepted for
exchange.
To the extent not prohibited by any law or applicable policy of the
SEC, the Company shall use its best efforts to complete the Exchange Offer as
provided above, and shall comply with the applicable requirements of the
Securities Act, the Exchange Act and other applicable laws in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than those set forth in the two preceding paragraphs. Each Holder of
Registrable Securities (other than Private Exchange Securities) who wishes to
exchange such Registrable Securities for Exchange Securities in the Exchange
Offer will be required to make certain customary representations in connection
therewith, including representations that such Holder is not an affiliate of the
Company within the meaning of Rule 405 under the Securities Act, or if it is an
affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable and deliver
information to be used in connection with the Shelf Registration Statement
within a reasonable time period in order to have their Securities included in
the Shelf Registration Statement, that it is not a broker-dealer tendering
Registrable Securities acquired directly from the Company for its own account,
that any Exchange Securities to be received by it will be acquired in the
ordinary course of business and that at the time of the commencement of the
Exchange Offer it has no arrangement or understanding with any Person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Securities. The Company may inform the Initial Purchasers of the
names and addresses of the Holders to whom the Exchange Offer is made, and, if
so informed, the Initial Purchasers shall have the right to contact such Holders
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities, and the Company shall have no further obligation to
register Registrable Securities (other than Private Exchange Securities)
pursuant to Section 2(b) hereof.
(b) Shelf Registration. In the event that (i) the Company is not
permitted to file the Exchange Offer Registration Statement or to consummate the
Exchange Offer because the
<PAGE> 11
-10-
Exchange Offer is not permitted by applicable law or Commission policy, (ii) the
Exchange Offer is not for any other reason consummated within 150 days after the
Issue Date, (iii) any holder of Securities notifies the Company within 10
Business Days after the commencement of the Exchange Offer that (a) due to a
change in applicable law or SEC policy it is not entitled to participate in the
Exchange Offer, (b) due to a change in applicable law or SEC policy it may not
resell the Exchange Securities to be acquired by it in the Exchange Offer to the
public without delivering a prospectus and the prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such holder or (c) it is a broker-dealer and owns Securities acquired
directly from the Company for its own account or (iv) the holders of a majority
of the Securities may not resell the Exchange Securities to be acquired by them
in the Exchange Offer to the public without restriction under the Securities Act
(other than the delivery of the Prospectus included in the Exchange Offer
Registration Statement), then the Company shall, at its cost, use its best
efforts to cause to be filed as promptly as practicable after such determination
or date, as the case may be, and, in any event, prior to the later of (A) 150
days after the Issue Date or (B) 30 days after such filing obligation arises and
use its best efforts to cause the Shelf Registration Statement to be declared
effective by the SEC on or prior to 90 days after such obligation arises;
provided, however, that if the Company has not consummated the Exchange Offer
within 150 days of the Issue Date, then the Company will file with the SEC on or
prior to the 165th day after the Issue Date, a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Securities, and
shall use its best efforts to have such Shelf Registration Statement declared
effective by the SEC as soon as practicable. No Holder of Registrable Securities
may include any of its Registrable Securities in any Shelf Registration pursuant
to this Agreement unless and until such Holder furnishes to the Company in
writing, within 10 days after receipt of a request therefor, such information as
the Company may, after conferring with counsel with regard to information
relating to Holders that would be required by the SEC to be included in such
Shelf Registration Statement or Prospectus included therein, reasonably request
for inclusion in any Shelf Registration Statement or Prospectus included
therein. Each Holder as to which any Shelf Registration is being effected agrees
to furnish to the Company all information with respect to such Holder necessary
to make any information previously furnished to the Company by such Holder not
materially misleading.
<PAGE> 12
-11-
The Company agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective for a period of two years from the
Issue Date (subject to extension pursuant to the last paragraph of Section 3
hereof) (or such shorter period that will terminate when all of the Registrable
Securities covered by such Shelf Registration Statement have been sold pursuant
thereto) or cease to be outstanding (the "Effectiveness Period"); provided,
however, that if such Shelf Registration Statement has been filed solely at the
request of any Initial Purchasers pursuant to clause (iv) above, the Company
shall only be required to use its best efforts to keep such Shelf Registration
Statement continuously effective for a period of one year from the Issue Date
(subject to extension pursuant to the last paragraph of Section 3 hereof) or for
such shorter period which will terminate when all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be outstanding. The Company shall not permit
any securities other than Registrable Securities or the Company's 7 7/8% Senior
Notes due 2005 to be included in the Shelf Registration. The Company further
agrees, if necessary, to supplement or amend the Shelf Registration Statement,
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the Securities Act or by any other rules and regulations thereunder for shelf
registrations, and the Company agrees to furnish to the Holders of Registrable
Securities copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b) hereof and the
reasonable fees and expenses of one counsel, if any, designated in writing by
the Majority Holders to act as counsel for the Holders of the Registrable
Securities in connection with a Shelf Registration Statement. Except as provided
in the preceding sentence, each Holder shall pay all expenses of its counsel,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to the
Shelf Registration Statement.
(d) Effective Registration Statement. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable
<PAGE> 13
-12-
Securities pursuant to a Shelf Registration Statement is interfered with by any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have been effective during the period of such interference, until the offering
of Registrable Securities may legally resume. The Company will be deemed not to
have used its best efforts to cause the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, to become, or to remain,
effective during the requisite period if it voluntarily takes any action that
would result in any such Registration Statement not being declared effective or
in the Holders of Registrable Securities covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period,
unless such action is required by applicable law or unless such action is taken
by the Company in good faith and for valid business reasons, including the
acquisition or divestiture of assets, so long as the Company promptly thereafter
complies with the requirements of Section 3(b) hereof, if applicable.
(e) Additional Interest. In the event that (i) the applicable
Registration Statement is not filed with the SEC on or prior to the date
specified herein for such filing, (ii) the applicable Registration Statement is
not declared effective on or prior to the date specified herein for such
effectiveness after such obligation arises (the "Effectiveness Target Date"),
(iii) if the Exchange Offer is required to be consummated hereunder, the Company
fails to consummate the Exchange Offer within 30 Business Days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) the applicable Registration Statement is filed and declared
effective prior to the Effectiveness Target Date but shall thereafter cease to
be effective or usable without being succeeded immediately by an additional
Registration Statement covering the Registrable Securities which has been filed
and declared effective (each such event referred to in clauses (i) through (iv),
a "Registration Default"), then the interest rate on the Registrable Securities
as to which such Registration Default relates will increase ("Additional
Interest"), with respect to the first 90-day period (or portion thereof) while a
Registration Default is continuing immediately following the occurrence of such
Registration Default, in an amount equal to 0.25% per annum of the principal
amount of the Securities. The rate of additional Interest will increase by an
additional 0.25% per annum of the principal amount of the Securities for each
subsequent 90-day period (or portion thereof) while a Registration Default is
continuing until all Registration Defaults have been cured, up to an aggregate
maximum increase in the in-
<PAGE> 14
-13-
terest rate of 1.00% per annum of the principal amount of the Securities.
Additional Interest shall be computed based on the actual number of days elapsed
during which any such Registration Defaults exist. Following the cure of a
Registration Default, the accrual of Additional Interest with respect to such
Registration Default will cease and the interest will revert to the original
rate.
If the Company issues a notice that the Shelf Registration Statement
is unusable due to the pendency of an announcement of a material corporate
transaction, or such a notice is required under applicable securities laws to be
issued by the Company, and the aggregate number of days in any consecutive
twelve-month period for which all such notices are issued or required to be
issued exceeds 30 days in the aggregate, then the interest rate borne by the
applicable Securities will be increased by 0.25% per annum following the date
that such Shelf Registration Statement ceases to be usable for a period of time
in excess of the period permitted above, which rate shall be increased by an
additional 0.25% per annum at the beginning of each subsequent 90-day period;
provided that the aggregate increase in such annual interest rate may in no
event exceed 1.00% per annum. Upon the Company declaring that the Shelf
Registration Statement is usable after the period of time described in the
preceding sentence, the interest rate borne by the applicable Securities will be
reduced to the original interest rate if the Company is otherwise in compliance
with this paragraph.
The Company shall notify the Trustee within three Business Days
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). Additional
Interest shall be paid in arrears by depositing with the Trustee, in trust, for
the benefit of the Holders of Registrable Securities, on or before the
applicable semiannual interest payment date, immediately available funds in sums
sufficient to pay the Additional Interest then due. The Additional Interest due
shall be payable in arrears on each interest payment date to the record Holder
of Securities entitled to receive the interest payment to be paid on such date
as set forth in the Indenture. Each obligation to pay Additional Interest shall
be deemed to accrue from and including the day following the applicable Event
Date.
(f) Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b)
<PAGE> 15
-14-
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it would not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Section 2(a) and Section 2(b) hereof.
3. Registration Procedures. In connection with the obligations of
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Company, (ii) shall, in the case of a Shelf Registration,
be available for the sale of the Registrable Securities by the selling
Holders thereof and (iii) shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; and use its best
efforts to cause such Registration Statement to become effective and
remain effective in accordance with Section 2 hereof. The Company shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must provide
information for inclusion therein without the Holders being afforded an
opportunity to review such documentation a reasonable time prior to the
filing of such document or if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing
underwriters, if any, shall reasonably object by written notice to the
Company within two Business Days after receipt of such documentation;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the Effectiveness Period or the
Applicable Period, as the case may be; and cause each Prospectus to be
supplemented by any required prospectus supplement and as so supplemented
to be filed pursuant to Rule 424 (or any similar provision then in force)
under the Securities Act, and comply with the provisions of the Securities
Act, the Exchange Act and the rules and regulations
<PAGE> 16
-15-
promulgated thereunder applicable to it with respect to the disposition of
all securities covered by each Registration Statement during the
Effectiveness Period or the Applicable Period, as the case may be, in
accordance with the intended method or methods of distribution by the
selling Holders thereof described in this Agreement (including sales by
any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) furnish to each Holder
of Registrable Securities, without charge, as many copies of each
Prospectus, and any amendment or supplement thereto and such other
documents as such Holder may reasonably request, in order to facilitate
the disposition of the Registrable Securities and (ii) subject to the last
paragraph of Section 3 hereof, hereby consent to the use of the Prospectus
or any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto subject to the limitations on the use thereof provided
in Sections 2(b) and 2(c);
(d) in the case of a Shelf Registration, use its best efforts to
register or qualify, as may be required by applicable law, the Registrable
Securities under all applicable state securities or "blue sky" laws of
such jurisdictions by the time the applicable Registration Statement is
declared effective by the SEC as any Holder of Registrable Securities
covered by a Registration Statement shall reasonably request in advance of
such date of effectiveness, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall
not be required to (i) qualify as a foreign corporation or as a broker or
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general
consent to service of process or (iii) subject itself to general service
of process or taxation in any such jurisdiction if it is not so subject;
(e) in the case of (1) a Shelf Registration or (2) Participating
Broker-Dealers who have notified the Company that they will be utilizing
the Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(s) hereof, notify each Holder of
<PAGE> 17
-16-
Registrable Securities, or such Participating Broker-Dealers, as the case
may be, their counsel, if any, promptly and if requested by such Holder or
Participating Broker-Dealer confirm such notice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request
by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective, (iii)
of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if the Company
receives any notification with respect to the suspension of the
qualification of the Registrable Securities or the Exchange Securities to
be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction or the initiation of any proceeding for such purpose, (v) of
the happening of any event or the failure of any event to occur or the
discovery of any facts or otherwise, during the period a Shelf
Registration Statement is effective which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Registration Statement or Prospectus to omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading and
(vi) the Company's reasonable determination that a post-effective
amendment to the Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of
each Registration Statement relating to such Shelf Registration and any
post-effective amendment thereto (without documents incorporated therein
by reference or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing
Securities covered by such Shelf Registration to be sold and
<PAGE> 18
-17-
relating to the subsequent transfer of such Securities; and cause such
Registrable Securities to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling
Holders may reasonably request at least two Business Days prior to the
closing of any sale of Registrable Securities;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof, use its
best efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct
such misstatement or omission;
(j) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with certificates for the
Exchange Securities or the Registrable Securities, as the case may be, in
a form eligible for deposit with the Depositary;
(k) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration
of the Exchange Securities or Registrable Securities, as the case may be,
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its reasonable
best efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(l) in the case of a Shelf Registration, enter into such agreements
and take all such other appropriate ac-
<PAGE> 19
-18-
tions as are reasonably requested in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and in
such connection if so requested, (i) make such representations and
warranties to Holders of such Registrable Securities with respect to the
business of the Company and its subsidiaries as then conducted and the
Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are
customarily made by Companies to underwriters in similar underwritten
offerings, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof in form and
substance reasonably satisfactory to the Holders of a majority in
principal amount of the Registrable Securities covered by such
Registration Statement, addressed to each selling Holder covering the
matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
Holders; (iii) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to the Company and the
selling Holders of Registrable Securities (other than Participating
Broker-Dealers, unless such Participating Broker-Dealers would be deemed
to be "underwriters" as a result of the sale of Securities covered by such
Shelf Registration Statement), such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with similar underwritten offerings and such other matters
as reasonably requested by such selling Holders; and (iv) if an
underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set
forth in Section 4 hereof (or such other provisions and procedures
acceptable to the Company and the Holders of a majority in aggregate
principal amount of Registrable Securities covered by such Registration
Statement) with respect to all parties to be indemnified pursuant to said
Section (including, without limitation, such selling Holders). The above
shall be done at each closing in respect of the sale of Registrable
Securities, or as and to the extent required thereunder;
<PAGE> 20
-19-
(m) if (1) a Shelf Registration is filed pursuant to Section 2(b) or
(2) a Prospectus contained in an Exchange Offer Registration Statement
filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Securities during the Applicable Period, make available for
inspection by each such person who would be an "underwriter" as a result
of either (i) the sale by such person of Securities covered by such Shelf
Registration Statement or (ii) the sale during the Applicable Period by a
Participating Broker-Dealer of Exchange Securities (provided that a
Participating Broker-Dealer shall not be deemed to be an underwriter
solely as a result of it being required to deliver a prospectus in
connection with any resale of Exchange Securities) and any attorney,
accountant or other agent retained by any such person (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to enable
them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of the Company and its subsidiaries
to supply all information in each case reasonably requested by any such
Inspector in connection with such Registration Statement. Records which
the Company determines, in good faith, to be confidential and any Records
which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors to any other Person unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement, (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or (iii) the information in such Records has been made
generally available to the public through no fault or action of any
selling Holder of such Registrable Securities, any such Participating
Broker-Dealer or any Inspector. Each such Holder and each such
Participating Broker-Dealer will be required to agree that information
obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such is
made generally available to the public through no fault or action of such
Holder, such Participating Broker-Dealer or any Inspector. Each selling
Holder of such Registrable Securities and each such Participating
Broker-Dealer will
<PAGE> 21
-20-
be required to further agree that it will, upon learning that disclosure
of such Records is necessary under (i) or (ii) above, give notice to the
Company and allow the Company at its expense to undertake appropriate
action to prevent disclosure of the Records deemed confidential;
(n) comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company after the effective date of a Registration Statement, which
statements shall cover said 12-month periods;
(o) upon consummation of an Exchange Offer or a Private Exchange,
obtain an opinion of counsel to the Company addressed to the Trustee for
the benefit of all Holders of Registrable Securities participating in the
Exchange Offer or the Private Exchange, as the case may be, and which
includes an opinion that (i) the Company has duly authorized, executed and
delivered the Exchange Securities and Private Exchange Securities, and
(ii) each of the Exchange Securities or the Private Exchange Securities,
as the case may be, constitute a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its
respective terms (in each case, with customary exceptions);
(p) if an Exchange Offer or a Private Exchange is to be consummated,
upon proper delivery of the Registrable Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange
for the Exchange Securities or the Private Exchange Securities, as the
case may be, the Company shall mark, or cause to be marked, on such
Registrable Securities and on the books of the Trustee, the Note Registrar
(as defined in the Indenture) and, if necessary, the Depositary, delivered
by such Holders that such Registrable Securities are being canceled in
exchange for the Exchange Securities or the Private Exchange Securities,
as the case may be; but in no
<PAGE> 22
-21-
event shall such Registrable Securities be marked as paid or otherwise
satisfied solely as a result of being exchanged for Exchange Securities or
Private Exchange Securities in the Exchange Offer or the Private Exchange,
as the case may be;
(q) cooperate with each seller of Registrable Securities covered by
any Registration Statement participating in the disposition of such
Registrable Securities and one counsel acting on behalf of all such
sellers in connection with the filings, if any, required to be made with
the NASD;
(r) use its reasonable best efforts to take all other steps
necessary to effect the registration of the Registrable Securities covered
by a Registration Statement contemplated hereby; and
(s) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which section shall be reasonably acceptable to
Merrill Lynch, as representative of the Initial Purchasers, and which
shall contain a summary statement of the positions taken or policies made
by the staff of the SEC with respect to the potential "underwriter" status
of any broker-dealer (a "Participating Broker-Dealer") that holds
Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities and that will be the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Securities to be received by such broker-dealer in the Exchange
Offer, whether such positions or policies have been publicly disseminated
by the staff of the SEC or such positions or policies, in the reasonable
judgment of Merrill Lynch, as representative of the Initial Purchasers or
such other representative, represent the prevailing views of the staff of
the SEC, including a statement that any such Participating Broker-Dealer
who receives Exchange Securities for Registrable Securities pursuant to
the Exchange Offer may be deemed a statutory underwriter and must deliver
a prospectus meeting the requirements of the Securities Act in connection
with any resale of such Exchange Securities, (ii) for a period of 180 days
after consummation of an Exchange Offer, furnish to each Participating
Broker-Dealer who has delivered to the Company the notice referred to in
Section 3(e), without charge, as many copies of each Prospectus included
in the Exchange Offer Registration State-
<PAGE> 23
-22-
ment, and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request; (iii) hereby consent to the use of
the Prospectus forming part of the Exchange Offer Registration Statement
or any amendment or supplement thereto, by any Person subject to the
prospectus delivery requirements of the SEC, including all Participating
Broker-Dealers, in connection with the sale or transfer of the Exchange
Securities covered by the Prospectus or any amendment or supplement
thereto, (iv) use its best efforts to keep the Exchange Offer Registration
Statement effective and to amend and supplement the Prospectus contained
therein in order to permit such Prospectus to be lawfully delivered by all
Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such Persons must comply with such
requirements in order to resell the Exchange Securities; provided,
however, that such period shall not be required to exceed 90 days (or such
longer period if extended pursuant to the last sentence of Section 3
hereof) (the "Applicable Period"), and (iv) include in the transmittal
letter or similar documentation to be executed by an exchange offeree in
order to participate in the Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus
meeting the requirements of the Securities Act in connection with
any resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, such broker-dealer
will not be deemed to admit that it is an underwriter within the meaning
of the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Company agrees to deliver, upon request, to the Trustee and to
Participating Broker-Dealers who have delivered to the Company the notice
referred to in Section 3(e) upon consummation of the Exchange Offer an
officers' certificate containing certifications substantially simi-
<PAGE> 24
-23-
lar to those set forth in Section 5(c) of the Purchase Agreement.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such seller and the proposed distribution of such
Registrable Securities, as the Company may from time to time reasonably request
in writing. The Company may exclude from such registration the Registrable
Securities of any seller who fails to furnish such information within a
reasonable time (not to exceed 10 Business Days) after receiving such request
and shall be under no obligation to compensate any such seller for any lost
income, interest or other opportunity forgone, or any liability incurred, as a
result of the Company's decision to exclude such seller.
In the case of (1) a Shelf Registration Statement or (2)
Participating Broker-Dealers who have notified the Company that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(s) hereof, that are seeking to sell Exchange Securities
and are required to deliver Prospectuses, each Holder agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 3(e)(ii), 3(e)(iii), 3(e)(iv), 3(e)(v) or 3(e)(vi) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to a Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(i) hereof or
until it is advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and, if so directed by the Company, such
Holder will deliver to the Company (at the Company's expense) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or Exchange
Securities, as the case may be, current at the time of receipt of such notice.
If the Company shall give any such notice to suspend the disposition of
Registrable Securities or Exchange Securities, as the case may be, pursuant to a
Registration Statement, the Company shall use its best efforts to file and have
declared effective (if an amendment) as soon as practicable an amendment or
supplement to the Registration Statement and, in the case of an amendment, have
such amendment declared effective as soon as practicable and shall extend the
period during which such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days in the period from and
including the date of the giving of such notice to and including the date when
the Company shall have made available
<PAGE> 25
-24-
to the Holders (x) copies of the supplemented or amended Prospectus necessary to
resume such dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) The Company shall indemnify
and hold harmless each Initial Purchaser, each Holder, each Participating
Broker-Dealer, each underwriter who participates in an offering of Registrable
Securities, their respective affiliates, each Person, if any, who controls any
of such parties within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment or supplement thereto), covering
Registrable Securities or Exchange Securities, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, joint or several, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any court or governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Sections 4(c) and 4(d) below) any such
settlement is effected with the prior written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of one counsel chosen as
provided in Section 4(c) below) reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any court or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue
<PAGE> 26
-25-
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) of this Section 4(a);
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission (i) made in reliance upon and
in conformity with written information furnished in writing to the Company by or
on behalf of such Initial Purchaser, such Holder, such Participating
Broker-Dealer or any underwriter with respect to such Initial Purchaser, Holder,
Participating Broker-Dealer or underwriter, as the case may be, expressly for
use in the Registration Statement (or any amendment or supplement thereto) or
any Prospectus (or any amendment or supplement thereto) or (ii) contained in any
preliminary Prospectus or the final Prospectus if such Initial Purchaser, such
Holder, such Participating Broker-Dealer or such underwriter failed to send or
deliver a copy of the final Prospectus (or any amendment or supplement thereto)
to the Person asserting such losses, claims, damages or liabilities on or prior
to the delivery of written confirmation of any sale of securities covered
thereby to such Person in any case where the Company shall have previously
furnished copies thereof to such Initial Purchaser, such Holder, such
Participating Broker-Dealer or such underwriter, as the case may be, in
accordance with this Agreement, at or prior to the written confirmation of the
sale of such Securities to such Person and the untrue statement contained in or
the omission from the preliminary Prospectus or the final Prospectus was
corrected in the final Prospectus (or any amendment or supplement thereto). Any
amounts advanced by the Company to an indemnified party pursuant to this Section
4 as a result of such losses shall be returned to the Company if it shall be
finally determined by a court of competent jurisdiction in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, each of its directors and officers who signs any
Registration Statement, each Initial Purchaser, each underwriter who
participates in an offering of registrable Securities and the other selling
Holders and each of their respective directors and each Person, if any, who
controls any of the Company, the Initial Purchasers, any underwriter or any
other selling Holder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, against any and all loss, liability, claim, damage and
expense whatsoever described in the indemnity contained in Section 4(a)
<PAGE> 27
-26-
hereof, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment or supplement thereto) or any Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such selling Holder with respect to
such Holder expressly for use in the Registration Statement (or any supplement
thereto), or any such Prospectus (or any amendment thereto); provided, however,
that, in the case of the Shelf Registration Statement, no such Holder shall be
liable for any claims hereunder in excess of the amount of net proceeds received
by such Holder from the sale of Registrable Securities pursuant to the Shelf
Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 4(a) above, one counsel to all the
indemnified parties shall be selected by Merrill Lynch, and, in the case of
parties indemnified pursuant to Section 4(b) above, counsel to all the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party.
Notwithstanding the foregoing, if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action (which approval shall not be unreasonably withheld),
unless such indemnified parties reasonably object to such assumption on the
ground that there may be legal defenses available to them which are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying parties
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local
<PAGE> 28
-27-
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution is sought under this Section 4, unless such
settlement, compromise or consent (i) includes a full and unconditional release
of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and the offer and sale of any Securities and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel pursuant to Section 4(a)(iii) above, then such indemnifying
party agrees that it shall liable for any settlement of the nature contemplated
by Section 4(a)(ii) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Initial
Purchasers and the Holders, as applicable, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Company, the Initial Purchasers and the
Holders; provided, however, that 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 that was not guilty of such
fraudulent misrepresentation. As between the Company and the Initial Purchasers
and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate
<PAGE> 29
-28-
to reflect the relative fault of the Company, on the one hand, and of the Holder
of Registrable Securities, the Participating Broker-Dealer or Initial
Purchasers, as the case may be, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company, on the one hand, and the Holder
of Registrable Securities, the Participating Broker-Dealer or the Initial
Purchasers, as the case may be, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, or by the Holder of Registrable
Securities, the Participating Broker-Dealer or the Initial Purchasers, as the
case may be, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Holders of the Registrable Securities and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 4.
For purposes of this Section 4, each affiliate of any Person, if
any, who controls a Holder of Registrable Securities, an Initial Purchaser or a
Participating Broker-Dealer within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same rights to contribution
as such other Person, and each director of the Company, each affiliate of the
Company, each executive officer of the Company who signed the Registration
Statement, and each Person, if any, who controls any Company within the meaning
of Section 15 of the Securities act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company.
5. Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such Holder (a)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required un-
<PAGE> 30
-29-
der the terms of such underwriting arrangements. The Company shall be under no
obligation to compensate any Holder for lost income, interest or other
opportunity foregone, or other liability incurred, as a result of the Company's
decision to exclude such Holder from any underwritten registration if such
Holder has not complied with the provisions of this Section 5 in all material
respects following 10 Business Days' written notice of non-compliance and the
Company's decision to exclude such Holder.
6. Selection of Underwriters. The Holders of Registrable Securities
covered by the Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount of the Registrable Securities covered by
the Shelf Registration Statement; provided, however, that such underwriters and
managers must be reasonably satisfactory to the Company.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. So long as any of the Registrable
Securities are outstanding, the Company will file with the Commission, to the
extent then permitted by the Commission, the annual reports, quarterly reports
and other documents that the Company would have been required to file with the
Commission pursuant to Sections 13(a) and 15(d) of the Exchange Act if the
Company was subject to such Sections, and the Company will promptly provide to
the Trustee copies of such reports and documents; provided, however, that if the
Company is for any reason unable to make such filings it will make available,
upon request, to any Holder of Registrable Securities or prospective purchaser
of Registrable Securities the information specified in Rule 144A(d)(4) of the
Securities Act.
(b) No Inconsistent Agreements. The rights granted to the Holders
hereunder do not, and will not for the term of this Agreement in any way
conflict with and are not, and will not during the term of this Agreement be
inconsistent with the rights granted to the holders of the Company's other
issued and outstanding securities under any other agreements entered into by the
Company.
(c) Amendments and Waivers. The provisions of this Agreement,
including provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, other-
<PAGE> 31
-30-
wise than with the prior written consent of the Company and the Majority
Holders; provided, however, that no amendment, modification, or supplement or
waiver or consent to the departure with respect to the provisions of Section 4
hereof shall be effective as against any Holder of Registrable Securities or the
Company unless consented to in writing by such Holder of Registrable Securities
or the Company, as the case may be.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, facsimile, or any courier guaranteeing overnight delivery (i)
if to a Holder, at the most current address given by such Holder to the Company
by means of a notice given in accordance with the provisions of this Section
7(d), which address initially is, with respect to the Initial Purchasers, the
address set forth in the Purchase Agreement; and (ii) if to the Company,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt is confirmed, if sent by facsimile; and on the next Business Day,
if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of the
Company and of the Initial Purchasers, including, without limitation and without
the need for an express assignment, subsequent Holders; provided, however, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Registrable Securities, in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the
<PAGE> 32
-31-
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Initial Purchasers and each
Holder shall be a third party beneficiary of the agreements made hereunder
between the Company, on the one hand, and the Initial Purchasers, on the other
hand, and shall have the right to enforce such agreements directly to the extent
it deems such enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.
(g) 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 to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. All specified times of day refer
to New York City time.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Securities Held by the Company or any of its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or any of its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
<PAGE> 33
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
WESTPOINT STEVENS INC.
By: /s/ Morgan M. Schuessler
-------------------------------------
Name: Morgan M. Schuessler
Title: Executive Vice President -
Finance and Chief Financial
Officer
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
GOLDMAN, SACHS & CO.,
NATIONSBANC MONTGOMERY SECURITIES LLC,
BNY CAPITAL MARKETS, INC.,
FIRST CHICAGO CAPITAL MARKETS, INC., and
SCOTIA CAPITAL MARKETS
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:
----------------------------------
Name:
Title:
<PAGE> 34
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
WESTPOINT STEVENS INC.
By:
-------------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
GOLDMAN, SACHS & CO.,
NATIONSBANC MONTGOMERY SECURITIES LLC,
BNY CAPITAL MARKETS, INC.,
FIRST CHICAGO CAPITAL MARKETS, INC., and
SCOTIA CAPITAL MARKETS
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Gregory Alan Margolies
----------------------------------
Name: Gregory Alan Margolies
Title: Authorized Signatory
<PAGE> 1
EXHIBIT 10.59
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 9, 1998
among
WESTPOINT STEVENS INC.
CERTAIN OF ITS SUBSIDIARIES
THE SEVERAL BANKS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N. A.,
as Administrative Agent
<PAGE> 2
TABLE OF CONTENTS
SECTION 1 DEFINITIONS........................................................1
1.1 Definitions........................................................1
1.2 Computation of Time Periods.......................................28
1.3 Accounting Terms..................................................28
SECTION 2 CREDIT FACILITIES.................................................29
2.1 Revolving Loans...................................................29
2.2 Competitive Loan Subfacility......................................31
2.3 Foreign Currency Loan Subfacility.................................33
2.4 Letter of Credit Subfacility......................................35
2.5 Swingline Loan Subfacility........................................40
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES....................42
3.1 Default Rate......................................................42
3.2 Extension and Conversion..........................................42
3.3 Prepayments.......................................................43
3.4 Termination and Reduction of Revolving Committed Amount...........44
3.5 Fees. ............................................................44
3.6 Capital Adequacy..................................................46
3.7 Unavailability....................................................46
3.8 Illegality........................................................46
3.9 Requirements of Law...............................................47
3.10 Treatment of Affected Loans......................................48
3.11 Taxes............................................................49
3.12 Compensation.....................................................51
3.13 Pro Rata Treatment...............................................51
3.14 Sharing of Payments..............................................52
3.15 Payments, Computations, Etc......................................53
3.16 Evidence of Debt.................................................55
3.17 Additional Foreign Borrowers.....................................55
3.18 Several Liability of Foreign Borrowers...........................56
3.19 European Common Currency.........................................56
SECTION 4 GUARANTY OF FOREIGN BORROWER OBLIGATIONS..........................57
4.1 Guaranty..........................................................57
4.2 Obligations Unconditional.........................................57
4.3 Reinstatement.....................................................58
4.4 Remedies..........................................................58
SECTION 5 CONDITIONS........................................................59
5.1 Closing Conditions................................................59
5.2 Conditions to all Extensions of Credit............................63
SECTION 6 REPRESENTATIONS AND WARRANTIES....................................64
6.1 Financial Condition...............................................64
i
<PAGE> 3
6.2 No Material Change................................................64
6.3 Organization and Good Standing....................................64
6.4 Power; Authorization; Enforceable Obligations.....................65
6.5 No Conflicts......................................................65
6.6 No Default........................................................66
6.7 Ownership.........................................................66
6.8 Indebtedness......................................................66
6.9 Litigation........................................................66
6.10 Tax Returns, Payments and Examinations...........................66
6.11 Compliance with Law..............................................67
6.12 ERISA............................................................67
6.13 Subsidiaries.....................................................68
6.14 Governmental Regulations, Etc....................................69
6.15 Purpose of Loans.................................................70
6.16 Environmental Matters............................................70
6.17 Intellectual Property............................................71
6.18 Solvency.........................................................71
6.19 Investments......................................................71
6.20 Location of Collateral...........................................71
6.21 Disclosure.......................................................71
6.22 No Burdensome Restrictions.......................................72
6.23 Brokers' Fees....................................................72
6.24 Labor Matters....................................................72
6.25 Year 2000 Compliance.............................................72
SECTION 7 AFFIRMATIVE COVENANTS.............................................72
7.1 Information Covenants.............................................72
7.2 Preservation of Existence and Franchises..........................76
7.3 Books and Records.................................................76
7.4 Compliance with Law...............................................76
7.5 Payment of Taxes and Other Indebtedness...........................76
7.6 Insurance.........................................................77
7.7 Maintenance of Property...........................................77
7.8 Performance of Obligations........................................78
7.9 Use of Proceeds...................................................78
7.10 Audits/Inspections...............................................78
7.11 Financial Covenants. The Borrower shall:........................78
7.12 Additional Credit Parties........................................78
7.13 Real Estate Appraisals...........................................79
7.14 Environmental Assessments........................................79
SECTION 8 NEGATIVE COVENANTS................................................80
8.1 Indebtedness......................................................80
8.2 Liens.............................................................81
8.3 Nature of Business................................................81
8.4 Consolidation, Merger, Dissolution, etc...........................81
ii
<PAGE> 4
8.5 Asset Dispositions................................................82
8.6 Investments and Acquisitions......................................83
8.7 Restricted Payments...............................................84
8.8 Transactions with Affiliates......................................84
8.9 Fiscal Year; Organizational Documents.............................84
8.10 Limitation on Restricted Actions.................................85
8.11 Ownership of Subsidiaries........................................85
8.12 Sale Leasebacks..................................................85
8.13 No Negative Pledges..............................................86
8.14 Operating Lease Obligations......................................86
8.16 Environmental Liabilities........................................87
8.17 Futures Contracts................................................87
8.18 Inactive Subsidiaries............................................87
SECTION 9 EVENTS OF DEFAULT.................................................88
9.1 Events of Default.................................................88
9.2 Acceleration; Remedies............................................90
SECTION 10 AGENCY PROVISIONS................................................91
10.1 Appointment, Powers and Immunities...............................91
10.2 Reliance by Agent................................................91
10.3 Defaults.........................................................92
10.4 Rights as a Bank.................................................92
10.5 Indemnification..................................................93
10.6 Non-Reliance on Agent and Other Banks............................93
10.7 Successor Agent..................................................93
10.8 Co-Agents........................................................94
SECTION 11 MISCELLANEOUS....................................................94
11.1 Notices..........................................................94
11.2 Right of Set-Off; Adjustments....................................95
11.3 Benefit of Agreement.............................................95
11.4 No Waiver; Remedies Cumulative...................................97
11.5 Expenses; Indemnification........................................97
11.6 Amendments, Waivers and Consents.................................98
11.7 Counterparts.....................................................99
11.8 Headings........................................................100
11.9 Survival........................................................100
11.10 Governing Law; Submission to Jurisdiction; Venue...............100
11.11 Arbitration....................................................101
11.12 Severability...................................................101
11.13 Amended and Restated Agreement; Entirety.......................101
11.14 Binding Effect; Termination....................................102
11.15 Confidentiality................................................102
11.16 Source of Funds................................................102
11.17 Judgment Currency..............................................103
11.18 Conflict.......................................................103
iii
<PAGE> 5
SCHEDULES
Schedule 1.1A Existing Letters of Credit
Schedule 1.1B Liens
Schedule 1.1C Subsidiary Guarantors
Schedule 2.1(a) Revolving Commitment Percentages of the Banks
Schedule 5.1(d)(i) Form of Legal Opinion (Weil, Gotshal & Manges LLP)
Schedule 5.1(d)(ii) Form of Legal Opinion (Local Collateral Counsel)
Schedule 6.4 Required Consents, Authorizations, Notices
and Filings
Schedule 6.9 Litigation
Schedule 6.10 Taxes
Schedule 6.12 ERISA
Schedule 6.13 Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Mortgaged Properties
Schedule 6.20(b) Collateral Locations
Schedule 6.20(c) Chief Executive Offices/Principal Places
of Business
Schedule 6.24 Labor Matters
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
Schedule 8.9 Changes in Capital Stock
EXHIBITS
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.2(b)-1 Form of Competitive Bid Request
Exhibit 2.2(b)-2 Form of Notice of Competitive Bid Request
Exhibit 2.2(c) Form of Competitive Bid
Exhibit 2.2(e) Form of Competitive Bid Accept/Reject Letter
Exhibit 2.3 Form of Foreign Currency Notes of Foreign Borrowers
Exhibit 2.5 Form of Swingline Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
iv
<PAGE> 6
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 9,
1998 (as amended, modified, restated or supplemented from time to time, the
"Credit Agreement"), is by and among WESTPOINT STEVENS INC., a Delaware
corporation (the "Borrower"), the foreign subsidiaries identified on the
signature pages hereto and such other foreign subsidiaries as may from time to
time become Foreign Borrowers hereunder in accordance with the provisions
hereof, the BANKS (as defined herein) and NATIONSBANK, N.A., as Agent for the
Banks (in such capacity, the "Agent" or the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower, certain lending institutions, and Bankers Trust
Company, as administrative agent, entered into that certain credit agreement
dated as of December 1, 1993 (the "Original Credit Agreement") pursuant to which
such lending institutions agreed to make certain loans and extensions of credit
to the Borrower;
WHEREAS, on or about November 23, 1994, the Borrower, NationsBank, N.A. as
administrative agent, and certain lending institutions entered into that Amended
and Restated Credit Agreement (as heretofore amended, the "1994 Credit
Agreement"), pursuant to which the Borrower and the lending institutions party
thereto amended, modified and restated the terms and conditions of the Original
Credit Agreement;
WHEREAS, the Borrower desires to restate the 1994 Credit Agreement to
provide for certain amendments and modifications thereof, including without
limitation the increase in the amount and types of loans and extensions of
credit available thereunder;
WHEREAS, the Banks are willing to amend and restate the 1994 Credit
Agreement for the purposes and pursuant to the terms and conditions set forth
herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
1
<PAGE> 7
"Acquisition", by any Person, means the acquisition by such Person
of the Capital Stock or all or substantially all of the Property of
another Person, whether or not involving a merger or consolidation with
such Person.
"Acquisition Consideration" means with respect to any Acquisition
permitted by Section 8.6(b), the aggregate purchase price paid in
connection with such acquisition minus the sum of (i) any Indebtedness
which was assumed or incurred in connection with such Acquisition to the
extent such Indebtedness is permitted by Section 8.1, plus (ii) any
proceeds from the issuance by the Borrower of Capital Stock that are used
to pay all or part of the purchase price of such Acquisition or the value
of any Capital Stock issued to the seller in connection with such
Acquisition, provided that the Borrower issues such Capital Stock
concurrently with the closing of such Acquisition.
"Additional Credit Party" means each Person that becomes a
Subsidiary Guarantor after the Closing Date by execution of a Joinder
Agreement.
"Adjusted Eurocurrency Rate" means the Eurocurrency Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the Capital Stock in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N. A., NC1-001-15-04,
101 North Tryon Street, Charlotte, North Carolina 28255, Attn: Agency
Services, or such other address as may be identified by written notice
from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the heading
hereof, together with any successors or assigns.
"Agent's Fee Letter" means that certain letter agreement, dated as
of May 7, 1998, between the Agent and the Borrower, as amended, modified,
restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(d).
"Applicable Lending Office" means, for each Bank, the office of such
Bank (or of an Affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Borrower by written notice as the office by
which its Eurocurrency Loans are made and maintained.
2
<PAGE> 8
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Eurocurrency Loan, the
applicable rate of the Standby Letter of Credit Fee for any day for
purposes of Section 3.5(c)(i) or the applicable rate of the Trade Letter
of Credit Fee for any day for purposes of Section 3.5(c)(ii), the
applicable percentage corresponding to the Rate Adjustment Ratio in effect
as of the most recent Calculation Date:
<TABLE>
<CAPTION>
================================================================================
Rate Adjustment Applicable Percentage For Eurocurrency
Pricing Ratio Loans, Standby Letter of Credit Fee and
Level Trade Letter of Credit Fee
- --------------------------------------------------------------------------------
<S> <C> <C>
I Less than or equal to 0.75%
2.75
- --------------------------------------------------------------------------------
II Less than or equal to 0.50%
3.25 but greater than
2.75
- --------------------------------------------------------------------------------
III Greater than 3.25 0.25%
- --------------------------------------------------------------------------------
</TABLE>
The Applicable Percentages shall be determined and adjusted quarterly on
the date (each a "Calculation Date") five Business Days after the date by
which the Credit Parties are required to provide the officer's certificate
in accordance with the provisions of Section 7.1(c) for the most recently
ended fiscal quarter of the Consolidated Parties; provided, however, that
(i) the initial Applicable Percentages shall be based on Pricing Level II
(as shown above) and shall remain at Pricing Level II until the first
Calculation Date subsequent to the Closing Date and, thereafter, the
Pricing Level shall be determined by the Rate Adjustment Ratio as of the
last day of the most recently ended fiscal quarter of the Consolidated
Parties preceding the applicable Calculation Date, and (ii) if the Credit
Parties fail to provide the officer's certificate to the Agency Services
Address as required by Section 7.1(c) for the last day of the most
recently ended fiscal quarter of the Consolidated Parties preceding the
applicable Calculation Date, the Applicable Percentage from such
Calculation Date shall be based on Pricing Level I until such time as an
appropriate officer's certificate is provided, whereupon the Pricing Level
shall be determined by the Rate Adjustment Ratio as of the last day of the
most recently ended fiscal quarter of the Consolidated Parties preceding
such Calculation Date. Each Applicable Percentage shall be effective from
one Calculation Date until the next Calculation Date. Any adjustment in
the Applicable Percentages shall be applicable to all existing Loans and
Letters of Credit as well as any new Loans and Letters of Credit made or
issued.
"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary) of
any Consolidated Party whether by sale, lease, transfer or otherwise
(including pursuant to any casualty or condemnation event). The term
"Asset Disposition" shall not include (i) the sale of inventory in the
3
<PAGE> 9
ordinary course of business, or (ii) the sale or disposition of machinery
and equipment no longer used or useful in the conduct of such Person's
business.
"Available Foreign Currency" means (i) British Pounds Sterling,
French Francs, Swiss Francs, Deutsche Marks, Japanese Yen and Hong Kong
Dollars, (ii) any other freely available currency which is freely
transferrable and freely convertible into Dollars and in which dealings in
deposits are carried on in the London interbank market, which shall be
requested by the Borrower and approved by each Bank, and (iii) subject to
Section 3.19 hereof, the Euro.
"Bank" means any of the Persons identified as a "Bank" on the
signature pages hereto, and any Person which may become a Bank by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time
to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or ordering the winding up or
liquidation of its affairs; or (ii) there shall be commenced against such
Person an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to
the entry of an order for relief in an involuntary case under any such
law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
make any general assignment for the benefit of creditors; or (iv) such
Person shall be unable to, or shall admit in writing its inability to, pay
its debts generally as they become due.
"Base Rate" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the Prime Rate for such day. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or
Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
4
<PAGE> 10
"Borrower" means WestPoint Stevens Inc., a Delaware corporation,
together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York,
New York are authorized or required by law to close, except that, when
used in connection with (i) a Eurocurrency Loan a Business Day shall also
be a day on which dealings between banks are carried on in deposits of
Dollars in London, England, and (ii) in the case of Foreign Currency
Loans, a Business Day shall also be a day on which dealings between banks
are carried on in the relevant Available Foreign Currency in London,
England.
"Calculation Date" has the meaning set forth in the definition of
"Applicable Percentage" set forth in this Section 1.1.
"Capital Expenditures" means, without duplication, with respect to
any Credit Party any amounts expended or incurred for any purchase or
other acquisition for value of any asset that is classified on a balance
sheet of such Credit Party prepared in accordance with GAAP as a fixed or
capital asset or capital expenditure.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership,
partnership interests (whether general or limited), (iv) in the case of a
limited liability company, membership interests and (v) any other interest
or participation that confers on a Person the right to receive a share of
the profits and losses of, or distributions of assets of, the issuing
Person.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities
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 the Borrower; or (b)
the Borrower consolidates with, or merges with or into, another person or
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any person or any person consolidates
with, or merges with or into, the Borrower, in any such event pursuant to
a transaction in which the outstanding Voting Stock of the Borrower is
converted into or exchanged for cash, securities, or other property, other
than any such transaction where (i) the outstanding Voting Stock of the
Borrower is converted into or exchanged for (1) Voting Stock (other than
Disqualified Stock) of the surviving or transferee corporation or its
parent corporation and/or (2) cash, securities and other property in an
amount which could be paid by the Borrower as a Restricted Payment and
(ii) immediately after such transaction no "person"
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<PAGE> 11
or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
a "beneficial ownership" of all securities 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
total Voting Stock of the surviving or transferee corporation or its
parent corporation, as applicable; or (c) during any consecutive two-year
period, individuals who at the beginning of such period constituted the
board of directors of the Borrower (together with any new directors whose
election by such board or whose nomination for election by the
stockholders of the Borrower was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of such board
then in office.
"Closing Date" means the date hereof.
"Co-Agent Bank" or "Co-Agent Banks," individually or collectively,
means The First National Bank of Chicago, ScotiaBanc Inc., The Bank of New
York, Wachovia Bank, N.A., Societe Generale, ABN Amro Bank, N.V. Atlanta
Agency, SunTrust Bank, Atlanta, and First Union National Bank.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any successor
sections.
"Collateral" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral
Documents.
"Collateral Documents" has the meaning ascribed to such term in the
Collateral Trust Agreement.
"Collateral Trust Agreement" means that certain Second Amended and
Restated Collateral Trust Agreement dated as of the date hereof executed
by and among the Borrower, the Subsidiary Guarantors, the Banks, IBJ
Schroder Bank and Trust Company, and the Trustee, as the same may be
amended from time to time.
"Commitment" means (i) with respect to each Bank, the Revolving
Commitment of such Bank, (ii) with respect to the Issuing Lender, the LOC
Commitment, and (iii) with respect to the Swingline Lender, the Swingline
Commitment.
"Competitive Bid" means an offer by a Bank to make a Competitive
Loan pursuant to the terms of Section 2.2.
"Competitive Bid Rate" means, as to any Competitive Bid made by a
Bank in accordance with the provisions of Section 2.2, the rate of
interest offered by the Bank making the Competitive Bid.
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<PAGE> 12
"Competitive Bid Request" means a request by the Borrower for
Competitive Bids in accordance with the provisions of Section 2.2(b).
"Competitive Bid Request Fee" shall have the meaning assigned to
such term in Section 3.5(d).
"Competitive Loan" means a loan made by a Bank in its discretion
pursuant to the provisions of Section 2.2.
"Competitive Loan Banks" means, at any time, those Banks which have
Competitive Loans outstanding.
"Competitive Loan Maximum Amount" shall have the meaning assigned to
such term in Section 2.2(a).
"Consolidated Current Assets" means, with respect to the
Consolidated Parties, as at the time any determination thereof is to be
made, the amount, without duplication, that is classified on a balance
sheet of the Consolidated Parties as current assets in accordance with
GAAP (excluding cash and cash equivalents).
"Consolidated Current Liabilities" means, with respect to the
Consolidated Parties, as at the time any determination thereof is to be
made, the amount, without duplication, that is classified on a balance
sheet of the Consolidated Parties as current liabilities in accordance
with GAAP (excluding current maturities of long term debt, Indebtedness
outstanding under the Credit Documents, other short term Funded
Indebtedness permitted by this Agreement and liabilities for federal
income taxes).
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income (or Consolidated Net Loss) for such period, plus
(ii) an amount which, in the determination of Consolidated Net Income (or
Consolidated Net Loss) for such period, has been deducted for (A)
Consolidated Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes and (C) depreciation and
amortization expense, including, without limitation, amortization of
deferred financing fees and expenses, all as determined in accordance with
GAAP on a consolidated basis.
"Consolidated Interest Expense" means, for any period, interest
expense (excluding the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest component
under Permitted Receivables Financings and Synthetic Leases) of the
Consolidated Parties on a consolidated basis for such period, as
determined in accordance with GAAP.
"Consolidated Net Income" and "Consolidated Net Loss" mean,
respectively, for any period, the aggregate net income (or net loss) of
the Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP. There shall be excluded in computing Consolidated
Net Income and Consolidated Net Loss, to the extent otherwise included
therein, (i) any gain or loss which is treated as an extraordinary item
under
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<PAGE> 13
GAAP and any gain or loss from the sale of any asset other than a sale in
the ordinary course of business, (ii) the income or loss of any Person
(other than a Consolidated Subsidiary of the Borrower) in which any other
Person (other than the Borrower or any of its Consolidated Subsidiaries)
has a joint interest, except to the extent of the amount of dividends or
other distributions actually paid to the Borrower or any of is
Consolidated Subsidiaries by such Person during such period, (iii) the
income or loss of any Person accrued prior to the date it becomes a
Consolidated Subsidiary of the Borrower or is merged into or consolidated
with the Borrower or any of its Consolidated Subsidiaries or that Person's
assets are acquired by the Borrower or any of its Consolidated
Subsidiaries, (iv) the income of any Consolidated Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or
similar distributions by that Consolidated Subsidiary of that income is
not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Consolidated Subsidiary (the
only such restrictions as of the date hereof being those imposed by the
corporate law of any such Subsidiary's state of incorporation), and (v)
the amortization of Excess Reorganization Value during such period as
determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date, all amounts which
would be included under stockholders' equity on a balance sheet of the
Borrower and its Consolidated Subsidiaries determined as at such date on a
consolidated basis in accordance with GAAP. There shall be excluded in
computing Consolidated Net Worth (a) the amortization of Excess
Reorganization Value since January 1, 1993 as determined in accordance
with GAAP, (b) the effect of the Restructuring Charge, adjusted to reflect
the tax effect of such charge, (c) any non-cash minimum pension liability
adjustment determined in accordance with GAAP, without giving effect to
any adjustment for minority interest in the cases of clauses (a) and (b)
above, (d) the effect of the after-tax write-off of deferred financing
fees and expenses related to the Original Credit Agreement (and each
amendment or restatement thereof, including the 1994 Credit Agreement and
this Credit Agreement) and (e) the after-tax extraordinary expenses in
1998 and 1999 associated with the refinancing of the Borrower's 8-3/4%
senior notes, its 9-3/8% senior subordinated debentures, its 9% sinking
fund debentures and the Permitted Receivables Financing.
"Consolidated Parties" means a collective reference to the Borrower
and its Subsidiaries, and "Consolidated Party" means any one of them.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurocurrency Loan from
one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base
Rate Loan into a Eurocurrency Loan or a Eurocurrency Loan into a Base Rate
Loan.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, the Collateral Trust Agreement,
each Joinder Agreement, the Agent's Fee Letter, the Collateral Documents
and all other related agreements and
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<PAGE> 14
documents issued or delivered hereunder or thereunder or pursuant hereto
or thereto (in each case as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time), and
"Credit Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower, the
Foreign Borrowers and the Guarantors, and "Credit Party" means any one of
them.
"Credit Party Obligations" means, without duplication, (i) all of
the obligations of the Credit Parties to the Banks (including the Issuing
Lender), the Agent and/or the Trustee, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other Credit
Documents (including, but not limited to, any interest accruing after the
occurrence of a Bankruptcy Event with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (ii) liabilities and obligations, whenever arising,
owing from any Credit Party to any Bank, or any Affiliate of a Bank,
arising under any Hedging Agreement.
"Current Ratio" means, with respect to the Consolidated Parties, as
at the time any determination thereof is to be made, a ratio the numerator
of which shall be Consolidated Current Assets and the denominator of which
shall be Consolidated Current Liabilities.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" means, at any time, any Bank that (a) has failed
to make a Loan or purchase a Participation Interest required pursuant to
the terms of this Credit Agreement within one Business Day of when due,
(b) other than as set forth in (a) above, has failed to pay to the Agent
or any Bank an amount owed by such Bank pursuant to the terms of this
Credit Agreement within one Business Day of when due, unless such amount
is subject to a good faith dispute or (c) has been deemed insolvent or has
become subject to a bankruptcy or insolvency proceeding or with respect to
which (or with respect to any of assets of which) a receiver, trustee or
similar official has been appointed.
"Determination Date" means with respect to any Foreign Currency Loan
and any Foreign Currency LOC Obligation:
(a) in connection with the origination of any new extension of
credit, the Business Day which is the earliest of the date such
credit is extended or the date the rate is set, as applicable;
(b) the last Business Day of each month; or
(c) the date of any reduction of the Revolving Committed
Amount pursuant to the terms of Section 3.4; and
in addition to the foregoing, such additional dates not more frequently
than once a month as may be determined by the Agent.
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<PAGE> 15
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable (in each
case, other than into common stock of the Borrower), pursuant to a sinking
fund obligation or otherwise, or is exchangeable for Indebtedness, or is
redeemable at the option of the holder thereof, in whole or in part, on or
prior to the final maturity date of the specified security.
Notwithstanding the foregoing, in no event shall Capital Stock that is
considered Disqualified Stock solely by reason of such Capital Stock being
convertible at the option of the holder of such capital stock into other
Capital Stock (other than Disqualified Stock) constitute Disqualified
Stock.
"Dollar Amount" means (a) with respect to Dollars or an amount
denominated in Dollars, such amount and (b) with respect to an amount of
any Available Foreign Currency or an amount denominated in such Available
Foreign Currency, the Dollar Equivalent of such amount on the most recent
Determination Date or such other applicable date specified in this Credit
Agreement.
"Dollar Equivalent" means, on any date, with respect to an amount
denominated in an Available Foreign Currency, the amount of Dollars into
which the Agent could, in accordance with its practice from time to time
in the interbank foreign exchange market, convert such amount of such
Available Foreign Currency at its spot rate of exchange (inclusive of all
reasonable related costs of conversion, if any are actually incurred)
applicable to the relevant transaction at or about 10:00 A.M., Charlotte,
North Carolina time, on such date.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
"Eligible Assignee" means (i) a Bank; (ii) an Affiliate of a Bank;
and (iii) any other Person approved by the Agent and, unless an Event of
Default has occurred and is continuing at the time any assignment is
effected in accordance with Section 11.3, the Borrower (such approval not
to be unreasonably withheld or delayed by the Borrower and such approval
to be deemed given by the Borrower if no objection is received by the
assigning Bank and the Agent from the Borrower within two Business Days
after notice of such proposed assignment has been provided by the Agent to
the Borrower); provided, however, that neither the Borrower nor an
Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions
relating to the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances
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<PAGE> 16
or wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the rules
and regulations thereunder, all as the same may be in effect from time to
time. References to sections of ERISA shall be construed also to refer to
any successor sections.
"ERISA Affiliate" means an entity which is under common control with
any Consolidated Party within the meaning of Section 4001(a)(14) of ERISA,
or is a member of a group which includes any Consolidated Party and which
is treated as a single employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of
a Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal by any
Consolidated Party or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such term is
defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple
Employer Plan; (iii) the distribution of a notice of intent to terminate
or the actual termination of a Plan pursuant to Section 4041(a)(2) or
4041A of ERISA; (iv) the institution of proceedings to terminate or the
actual termination of a Plan by the PBGC under Section 4042 of ERISA; (v)
any event or condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or partial withdrawal of any
Consolidated Party or any ERISA Affiliate from a Multiemployer Plan; (vii)
the conditions for imposition of a lien under Section 302(f) of ERISA
exist with respect to any Plan; or (viii) the adoption of an amendment to
any Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA.
"Euro" has the meaning ascribed to such term in Section 3.19.
"Eurocurrency Loan" means any Loan that bears interest at a rate
based upon the Eurocurrency Rate.
"Eurocurrency Rate" means, for any Eurocurrency Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be equal
to the quotient obtained by dividing (a) the Interbank Offered Rate for
such Eurocurrency Loan for such Interest Period by (b) 1 minus the
Eurocurrency Reserve Requirement for such Eurocurrency Loan for such
Interest Period.
"Eurocurrency Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be
maintained under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) by member banks
of the Federal Reserve System against "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the
foregoing, the
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Eurocurrency Reserve Requirement shall reflect any other reserves required
to be maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the Adjusted
Eurocurrency Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurocurrency Loans. The Adjusted
Eurocurrency Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Requirement.
"Event of Default" shall have the meaning as defined in Section 9.1.
"Excess Reorganization Value" means the aggregate of (i) the excess
of the reorganization value over the value of identifiable assets
calculated in connection with Valley's adoption of "Fresh Start" reporting
in connection with Valley's bankruptcy reorganization in September 1992,
which required Valley to record its assets and its liabilities at their
fair values as of September 30, 1992, and (ii) the excess of the
consideration paid for the Minority Shares in WPP over the carrying value
of the Minority Shares at the date such consideration is paid.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Asset Disposition" means (i) the sale, conveyance or other
contribution of applicable Transferred Assets by Finco or any Consolidated
Party as part of any Permitted Receivables Financing, (ii) any Asset
Disposition by any Consolidated Party to any Credit Party other than the
Borrower if the Credit Parties shall cause to be executed and delivered
such documents, instruments and certificates as the Agent may request so
as to cause the Credit Parties to be in compliance with the terms of
Sections 2.2 and 2.3 of the Collateral Trust Agreement, (iii) any sale or
other disposition of the Excluded Property (as defined in the Collateral
Trust Agreement), and (iv) the sale, conveyance or other disposition of
such other assets in other transactions provided that the aggregate
consideration received in all such other transactions by any Consolidated
Party does not exceed $100,000,000 in the aggregate from and after the
Closing Date and after giving effect to such Asset Disposition; provided,
however, in each instance referred to in subsection (iv) hereof, (a) after
giving effect such Asset Disposition, no Default or Event of Default
exists and (b) the aggregate consideration received by the Consolidated
Parties in connection with each such Asset Disposition shall be reasonably
equivalent in value to the properties sold, conveyed or otherwise disposed
of.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief
financial officer, treasurer or controller of such Person.
"Existing Letters of Credit" means the letters of credit described
by date of issuance, letter of credit number, undrawn amount, and date of
expiry on Schedule 1.1(A) hereto.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on
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<PAGE> 18
overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding
Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Agent (in its individual capacity) on such day
on such transactions as determined by the Agent.
"Finco" means WPS Receivables Corporation, a Delaware corporation
and any subsidiaries of WPS Receivables Corporation which purchase
Transferred Assets from Finco pursuant to the Permitted Receivables
Financing.
"Foreign Borrower" means each of WestPoint Stevens (UK) Limited,
WestPoint Stevens (Europe) Limited and any additional Foreign Subsidiary
of the Borrower designated as a Foreign Borrower pursuant to Section 3.17.
"Foreign Borrower Obligations" shall have the meaning assigned to
such term in Section 4.1.
"Foreign Currency Committed Amount" means the Foreign Currency
Equivalent of $50,000,000.
"Foreign Currency Equivalent" means, on any date, with respect to an
amount denominated in Dollars, the amount of any applicable Available
Foreign Currency into which the Agent could, in accordance with its
practice from time to time in the interbank foreign exchange market,
convert such amount of Dollars at its spot rate of exchange (inclusive of
all reasonable related costs of conversion, if any are actually incurred)
applicable to the relevant transaction at or about 10:00 A.M., Charlotte,
North Carolina time, on such date.
"Foreign Currency Loans" shall have the meaning assigned to such
term in Section 2.3.
"Foreign Currency LOC Obligations" means LOC Obligations relating to
Letters of Credit denominated in Available Foreign Currencies.
"Foreign Currency Notes" means the promissory notes of each Foreign
Borrower in favor of each of the Banks evidencing the Foreign Currency
Loans made by each Bank to each Foreign Borrower, as such notes may be
amended, modified, restated, supplemented, extended, renewed or replaced
from time to time.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such
Person.
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness
of the types referred to in clause
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(e), (f), (g), and (i) of the definition of "Indebtedness" set forth in
this Section 1.1, (b) all Indebtedness of another Person of the type
referred to in clause (a) above secured by (or for which the holder of
such Funded Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired by such Person, whether or not
the obligations secured thereby have been assumed, (c) all Guaranty
Obligations of such Person with respect to Indebtedness of the type
referred to in clause (a) above of another Person and (d) Indebtedness of
the type referred to in clause (a) above of any partnership or
unincorporated joint venture in which such Person is a general partner or
a joint venturer.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section
1.3.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantors" means a collective reference to each of the Subsidiary
Guarantors, together with their successors and permitted assigns, and
"Guarantor" means any one of them.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease
or purchase Property, securities or services primarily for the purpose of
assuring the holder of such Indebtedness, or (iv) to otherwise assure or
hold harmless the holder of such Indebtedness against loss in respect
thereof. The amount of any Guaranty Obligation hereunder shall (subject to
any limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement between any Consolidated Party and any
Bank, or any Affiliate of a Bank.
"Inactive Subsidiaries" means any Subsidiary of the Borrower as of
the Closing Date that does not engage in any business activity or own any
asset or assets (including Capital Stock of another Person) with an
aggregate fair market value in excess of $500,000 and does not have any
Subsidiary that engages in any business activity or owns any asset or
assets (including Capital Stock of another Person) with an aggregate fair
market value in excess of $500,000.
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"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily made,
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to Property purchased by such Person (other
than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase
price of Property or services purchased by such Person (other than trade
debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay
or similar arrangements or under commodities agreements, (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging
Agreements, (j) the maximum amount of all standby letters of credit issued
or bankers' acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and
which by the terms thereof could be (at the request of the holders thereof
or otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration, and (l) the principal portion of all obligations of
such Person under Synthetic Leases.
"Interbank Offered Rate" means, for any Eurocurrency Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or
any successor page or other page applicable to Available Foreign
Currencies) as the London interbank offered rate for deposits in Dollars
or the applicable Available Foreign Currency, as appropriate, at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term "Interbank
Offered Rate" shall mean, for any Eurocurrency Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars or the applicable Available
Foreign Currencies at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable
to such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%).
"Interest Coverage Ratio" means, with respect to the Consolidated
Parties on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Consolidated Parties, the ratio of
(a) Consolidated EBITDA during the four (4) fiscal quarters ended at the
end of each fiscal quarter to (ii) Consolidated Interest Expense for such
period.
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<PAGE> 21
"Interest Payment Date" means (a) as to Base Rate Loans (including
Swingline Loans), the last Business Day of each calendar quarter, the date
of repayment of principal of such Loan and the Maturity Date, and (b) as
to Eurocurrency Loans and Competitive Loans, the last day of each
applicable Interest Period, the date of repayment of principal of such
Loan and the Maturity Date, and in addition where the applicable Interest
Period for a Eurocurrency Loan or a Competitive Loan is greater than three
months, then also the date three months from the beginning of the Interest
Period and each three months thereafter.
"Interest Period" means, (i) as to Eurocurrency Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); and (ii) as to Competitive Loans,
a period commencing in each case on the date of the borrowing and ending
on the date specified in the applicable Competitive Bid whereby the offer
to make such Competitive Loan was extended; provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (b)
no Interest Period shall extend beyond the Maturity Date, and (c) where an
Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to
end, such Interest Period shall end on the last Business Day of such
calendar month.
"Interim Maturity Date" means the last day of any Interest Period.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment or other assets in the ordinary
course of business) or (c) any other capital contribution to or investment
in such Person, including, without limitation, any Guaranty Obligations
(including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such term
in Section 3.5(c)(iii).
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.12 hereto, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 7.12.
"Letter of Credit" means (i) any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.4 and (ii) any Existing Letters of Credit.
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<PAGE> 22
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans, Competitive Loans, the
Foreign Currency Loans and the Swingline Loans (or a portion of any
Revolving Loan, any Competitive Loan, any Foreign Currency Loan or
Swingline Loan bearing interest at the Base Rate, the Adjusted
Eurocurrency Rate, or the Competitive Bid Rate, as applicable),
individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit in an aggregate face amount at any time outstanding
(together with the amounts of any unreimbursed drawings thereon) of up to
the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such term
in Section 2.4.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for
(i) the rights and obligations of the parties concerned or at risk or (ii)
any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
(ii) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed by the Borrower.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets, or
liabilities of the Consolidated Parties taken as a whole, (ii) the ability
of any Credit Party to perform any material obligation under the Credit
Documents to which it is a party or (iii) the material rights and remedies
of the Banks under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated
as such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" means November 30, 2004.
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<PAGE> 23
"Maximum Restricted Payment Amount" means the sum of (i) $9,210,000,
plus (ii) 50% of the Consolidated Net Income from and after March 31, 1998
until any relevant measurement date, plus (iii) the Net Cash Proceeds
received by the Borrower from the exercise of stock warrants or options by
employees or former employees of the Borrower in respect of Capital Stock
of the Borrower from and after March 31, 1998, plus (iv) the Net Cash
Proceeds received by Alamac Sub Holdings Inc. from the sale of its
facility located in Whitmire, South Carolina to the Borrower after March
31, 1998 in an amount equal to $21,790,978.
"Merger" means the merger consummated on December 10, 1993 pursuant
to which WPP was merged with and into Valley, with Valley as the surviving
corporation.
"Minimum Available Amount" means, as of the date of calculation, (i)
$100,000,000 if such calculation occurs during the period between October
1 and December 1 of any fiscal year, (ii) $85,000,000 if such calculation
occurs during the period between January 1 and March 31 or between July 1
and September 30 of any fiscal year, and (iii) $75,000,000 if such
calculation occurs during the period between April 1 and June 30 of any
fiscal year.
"Minority Shares" means the minority-owned common stock of WPP that
was converted into a right of the holders of such shares to receive $46
per share in connection with and by operation of the Merger.
"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Mortgage Instruments" shall have the meaning assigned such term in
Section 5.1(f).
"Mortgage Policies" shall have the meaning assigned such term in
Section 5.1(f).
"Mortgaged Properties" shall have the meaning assigned such term in
Section 5.1(f).
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated Party
or any ERISA Affiliate and at least one employer other than the
Consolidated Parties or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N. A. and its successors.
"Net Cash Proceeds" means the aggregate cash proceeds received by
the Consolidated Parties in respect of any Asset Disposition net of (a)
direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions)
18
<PAGE> 24
and (b) taxes paid or payable as a result thereof; it being understood
that "Net Cash Proceeds" shall include, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration
received by the Consolidated Parties in any Asset Disposition.
"Net Offering Proceeds" mean the proceeds received from the
incurrence of any Funded Indebtedness or the issuance of any Capital
Stock, net of the actual liabilities for reasonably anticipated cash taxes
in connection with such issuance or incurrence, if any, any underwriting,
brokerage and other customary selling commissions incurred in connection
with such issuance or incurrence, and reasonable legal, advisory and other
fees and expenses, including title and recording tax expenses, if any,
incurred in connection with such issuance or incurrence.
"Note" or "Notes" means the Revolving Notes, the Swingline Note,
and/or the Foreign Currency Notes, individually or collectively, as
appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i), Section 2.3(b) or Section 2.5(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.11.
"Participation Interest" means a purchase by a Bank of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.4 or in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Investments" means (i) any evidence of indebtedness,
maturing not more than one year after the date of issue, issued by the
United States of America or any instrumentality or agency thereof the
principal, interest and premium, if any, of which is guaranteed fully by,
or backed by the full faith and credit of, the United States of America,
(ii) any certificate of deposit, maturing not more than one year after the
date of purchase, issued by a commercial banking institution which is a
member of the Federal Reserve System or a Schedule A Canadian bank which
institution or bank has a combined capital and surplus and undivided
profits of not less than $200,000,000 (based, if applicable, on the
prevailing exchange rate for the applicable currency), (iii) overnight
time deposits with any Japanese, European or Schedule A Canadian bank
which bank has
19
<PAGE> 25
a combined capital and surplus and undivided profits of not less than
$200,000,000 (based on the prevailing exchange rate for the applicable
currency), (iv) commercial paper, maturing not more than 120 days after
the date of purchase, issued by a corporation (other than the Borrower or
any Subsidiary of the Borrower or any of their respective Affiliates)
organized and existing under the laws of any state within the United
States of America with a rating, at the time as of which any determination
thereof is to be made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher) according to S&P, (v) shares or other evidences of
participation in any mutual fund which invests exclusively in one or more
of the foregoing and (vi) demand deposits with any bank or trust company
which has a combined capital and surplus and undivided profits of not less
than $200,000,000 and any other demand deposits maintained in the ordinary
course of business (A) not in excess of $100,000 at any one bank and (B)
for payroll purposes at any Bank or Affiliate of any Bank.
"Permitted Liens" means:
(i) Liens created pursuant to the Second Amended and Restated
Collateral Trust Agreement and the Collateral Documents, together
with the Liens granted to the Banks and/or the Agent pursuant to
this Agreement or any other Credit Documents in favor of the Agent
to secure the Credit Party Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due and
payable or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions
of title arising in the ordinary course of business, provided (A)
that such Liens secure only amounts not yet due and payable or, if
due and payable, are unfiled and no other action has been taken to
enforce the same or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the Property
subject to any such Lien is not yet subject to foreclosure, sale or
loss on account thereof), and (B) such obligations do not exceed
$10,000,000 in the aggregate at any one time outstanding;
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the ordinary
course of business to secure the performance of tenders, statutory
obligations, bids, leases, government contracts, surety and appeal
bonds, performance and return-of-money bonds, fee and expense
arrangements with trustees and fiscal agents and other similar
obligations (exclusive of obligations for the payment of borrowed
money); provided that full provision for the payment of all such
obligations has been made on the books of
20
<PAGE> 26
such Person to the extent required by GAAP and that such obligations
do not exceed $20,000,000 in the aggregate at any one time
outstanding;
(v) attachment, judgment or other similar Liens arising in
connection with court or arbitration proceedings involving
individually and in the aggregate liability of $10,000,000 or less
at any one time, provided the same are discharged, or that execution
or enforcement thereof is stayed pending appeal, within 60 days or,
in the case of any stay of execution or enforcement pending appeal,
within such lesser time during which such appeal may be taken;
(vi) such imperfections of title, covenants, restrictions,
easements, rights-of-way, minor defects or irregularities in title
and encumbrances on real property which in each case do not arise
out of the incurrence of Funded Indebtedness and which do not in the
aggregate interfere with or impair in any material respect the
utility, operation, value or marketability of the real property on
which such Lien is imposed;
(vii) Liens on Property of any Person securing purchase money
Indebtedness (including Capital Leases and Synthetic Leases) of such
Person to the extent permitted under Section 8.1(c), provided that
any such Lien attaches to such Property concurrently with or within
90 days after the acquisition thereof;
(viii) leases or subleases granted to others not interfering in any
material respect with the business of any Consolidated Party;
(ix) any interest of title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted
by this Credit Agreement;
(x) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with
the importation of goods and other Liens incurred in the ordinary
course of business in favor of the United States of America or any
State thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any State
thereof, to secure partial, progress, advance or other payments
pursuant to any contract;
(xi) Liens in favor of Finco or any Receivables Financier created or
deemed to exist in connection with a Permitted Receivables Financing
(including any related filings of any financing statements), but
only to the extent that any such Lien relates to the applicable
Transferred Assets actually sold, contributed, financed or otherwise
conveyed or pledged pursuant to such transaction;
(xii) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.6;
(xiii) normal and customary rights of setoff upon deposits of cash
in favor of Banks or other depository institutions;
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<PAGE> 27
(xiv) Liens arising or deposits made in connection with worker's
compensation, unemployment insurance, old age pensions, social
security and other similar benefits which are not overdue or are
being contested in good faith by appropriate proceedings diligently
pursued, provided that in the case of any such contest such
provision for the payment of such Liens has been made on the books
of the Person against which the Liens have been placed if and to the
extent required by GAAP;
(xv) Liens incurred in the ordinary course of business to secure
performance under cotton futures contracts in connection with
transactions or positions in a contract for future delivery of
cotton, provided that reserves in accordance with GAAP have been
provided on the books of the Person who incurred such Liens;
(xvi) to the extent constituting a Lien, cash collateralized Letters
of Credit and other letters of credit; provided that with respect to
such other letters of credit the aggregate amount of cash collateral
shall not exceed $10,000,000 at any one time;
(xvii) Liens securing reimbursement obligations with respect to
documentary or commercial letters of credit issued for the account
of such Person which encumber documents and other property relating
to such documentary or commercial letters of credit and the products
and proceeds thereof;
(xviii) Liens granted to any Bank securing obligations under Hedging
Agreements relating to Indebtedness permitted by Section 8.1(d);
(xix) Liens arising under the Environmental Laws relating to
obligations that are not due and payable which Liens do not in the
aggregate have and could not reasonably be expected to have a
Material Adverse Effect on the affected Properties;
(xx) Liens existing as of the Closing Date and set forth on Schedule
1.1B; provided that no such Lien shall at any time be extended to or
cover any Property other than the Property subject thereto on the
Closing Date; and
(xxi) extensions, renewals and replacements of any Lien described in
sections (i) - (xx) above, provided that the principal amount of the
Indebtedness secured thereby is not increased and such extension or
renewal is limited to the Property so encumbered.
"Permitted Receivables Financing" means any one or more receivables
financings in which (i) Finco or any Consolidated Party (a) sells (as
determined in accordance with GAAP) any accounts receivable, notes
receivable, rights to future lease payments or residuals (collectively,
together with certain related property relating thereto and the right to
collections thereon, being the "Transferred Assets") to any Person that is
not a Subsidiary or Affiliate of the Borrower (with respect to any such
transaction, the "Receivables Financier"), (b) borrows from such
Receivables Financier and secures such borrowings by a pledge of such
Transferred Assets, and/or (c) otherwise finances its acquisition of such
Transferred Assets and, in connection therewith, conveys an interest
22
<PAGE> 28
in such Transferred Assets to the Receivables Financier or (ii) any
Consolidated Party sells, conveys or otherwise contributes any Transferred
Assets to Finco, which then (a) sells (as determined in accordance with
GAAP) any such receivables (or an interest therein) to any Receivables
Financier, (b) borrows from such Receivables Financier and secures such
borrowings by a pledge of such receivables or (c) otherwise finances its
acquisition of such receivables and, in connection therewith, conveys an
interest in such receivables to the Receivables Financier, provided that
(1) such receivables financing shall not involve any recourse to any
Consolidated Party for any reason other than (A) repurchases of
non-eligible receivables or (B) indemnifications for losses other than
credit losses related to the receivables sold in such financing, (2) such
receivables financing shall not include any Guaranty Obligations of any
Consolidated Party, (3) the Required Banks shall be reasonably satisfied
with the structure of and documentation for any such transaction and that
the terms of such transaction, including the discount at which receivables
are sold, the term of the commitment of the Receivables Financier
thereunder and any termination events, shall be (in the good faith
understanding of the Agent) consistent with those prevailing in the market
for similar transactions involving a receivables originator/servicer of
similar credit quality and a receivables pool of similar characteristics
and (4) the documentation for such transaction shall not be amended or
modified without the prior written approval of the Required Banks, which
approval shall not be unreasonably withheld. Without limiting the
generality of the foregoing, Permitted Receivables Financing shall include
the Receivables Securitization Facility as defined in the 1994 Credit
Agreement and any refinancing thereof for a term of one year to five years
meeting the criteria set forth in this definition.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date in the form attached as Exhibit B to the Collateral Trust
Agreement, to be executed in favor of the Trustee by each of the Credit
Parties owning Capital Stock in a Subsidiary, as amended, modified,
restated or supplemented from time to time.
"Prime Rate" means the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may not be the
lowest rate of interest charged by NationsBank to its customers.
"Principal Office" means the principal office of NationsBank,
presently located at Charlotte, North Carolina.
"Pro Forma Compliance Certificate" means a certificate of an
Executive Officer of the Borrower delivered to the Agent in connection
with (i) any merger or consolidation
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<PAGE> 29
as referred to in Section 8.4, (ii) any Asset Disposition as referred to
in Section 8.5 or (iii) any Acquisition pursuant to Section 8.6(b), as
applicable, and containing detailed calculations (reasonably satisfactory
in form and content to the Agent) giving effect to the applicable
transaction on a pro forma basis, of the financial covenants set forth in
Section 7.11 hereof as of the most recent fiscal quarter end preceding the
date of the applicable transaction with respect to which the Agent shall
have received the Required Financial Information.
"Qualifying Bank" means any Bank which (i) as of the Closing Date is
a bank for the purposes of ss.349 Income and Corporation Taxes Act of 1988
of the United Kingdom (which under current law has the meaning given in
Section 840A of such Act) and (ii) as of the Closing Date will be within
the charge to the United Kingdom corporation tax as respects payment of
interest to be received by it under this Credit Agreement and the Foreign
Currency Notes.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Rate Adjustment Ratio" means, for the Borrower and its Consolidated
Subsidiaries on a consolidated basis as of the end of each fiscal quarter,
the ratio of (a) Consolidated EBITDA for the twelve month period ending as
of the end of such fiscal quarter to (b) cash Consolidated Interest
Expense paid during such twelve month period.
"Receivables Financier" shall have the meaning assigned to such term
in the definition of "Permitted Receivables Financing" set forth in this
Section 1.1.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation T, U, or X" means Regulation T, U or X, respectively, of
the Board of Governors of the Federal Reserve System as from time to time
in effect and any successor to all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing
into the environment (including the abandonment or discarding of barrels,
containers and other closed receptacles) of any Materials of Environmental
Concern.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Consolidated Parties required to be delivered pursuant to Section 7.1(a)
or (b) for the fiscal period or quarter ending as of such Calculation
Date, and (ii) the certificate of the chief financial officer of the
Borrower required by Section 7.1(c) to be delivered with the financial
statements described in clause (i) above.
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<PAGE> 30
"Required Banks" means, at any time, Banks which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 51% of (i) the Revolving Commitments
(and Participation Interests therein), or (ii) if the Commitments have
been terminated, the outstanding Loans and Participation Interests
(including the Participation Interests of the Issuing Lender in any
Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its material property
is subject.
"Restricted Debt Payment" means any purchase, prepayment, redemption
or other acquisition or retirement for value of any Indebtedness of the
Borrower under the Senior Notes or the Senior Note Indentures.
"Restricted Equity Payment" means (i) any dividend or other payment
or distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Consolidated Party, now or hereafter outstanding
(including without limitation any payment in connection with any merger or
consolidation involving any Consolidated Party), or to the direct or
indirect holders of any shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding, in their capacity as
such (other than dividends or distributions payable in the same class of
Capital Stock of the applicable Person or to any Credit Party (directly or
indirectly through Subsidiaries), (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding, and (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of Capital Stock of
any Consolidated Party, now or hereafter outstanding.
"Restricted Payment" means a Restricted Debt Payment or a Restricted
Equity Payment.
"Restructuring Charge" means the $200 million charge ($124 million
after related income tax benefits) to WPP's operating expense recorded in
the third fiscal quarter of fiscal year 1993, which charge relates to (a)
the closing and consolidation of certain facilities, (b) the write-off of
certain equipment which will be replaced with modern and more efficient
equipment and (c) severance, outplacement and other costs associated with
plant closures and overhead reductions.
"Revolving Commitment" means, with respect to each Bank, the
commitment of such Bank in an aggregate principal amount at any time
outstanding of up to such Bank's Revolving Commitment Percentage of the
Revolving Committed Amount, (i) to make Revolving Loans in accordance with
the provisions of Section 2.1(a), (ii) to make Foreign Currency Loans in
accordance with the provisions of Section 2.3(a), (iii) to purchase
Participation Interests in Letters of Credit in accordance with the
provisions of Section
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<PAGE> 31
2.4(c), and (iv) to purchase Participation Interests in Swingline Loans in
accordance with the provisions of Section 2.5(b).
"Revolving Commitment Percentage" means, for any Bank, the
percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Revolving Committed Amount" shall have the meaning assigned to such
term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrower in favor of each of the Banks evidencing the Revolving Loans,
the Foreign Currency Loans of the Borrower and the Competitive Loans
provided pursuant to Sections 2.1(e), 2.2(i), and 2.3(e), and individually
or collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from time
to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any Property,
whether owned by such Consolidated Party as of the Closing Date or later
acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom funds
have been, or are to be, advanced by such Person on the security of such
Property.
"Senior Note Indentures" means the indentures between the Borrower
and The Bank of New York, as trustee, each dated as of June 9, 1998, and
pursuant to which the Senior Notes have been issued, as amended, modified
or supplemented from time to time, together with any refinancing or
replacement thereof.
"Senior Notes" means the senior notes due 2005 and the senior notes
due 2008 issued in registered form under the Senior Note Indentures, which
notes in the aggregate evidence approximately $1.0 billion of Indebtedness
of the Borrower as of the Closing Date, as amended, modified or
supplemented from time to time, together with any refinancing or
replacement thereof.
"Single Employer Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer
Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon
its assets and pay its debts and other
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liabilities, contingent obligations and other commitments as they mature
in the normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (iv) the fair
value of the Property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person and (v) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured. In computing the amount of contingent liabilities at any time, it
is intended that such liabilities will be computed at the amount which, in
light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
"Standby Letter of Credit Fee" shall have the meaning assigned to
such term in Section 3.5(c)(i).
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of
the directors of such corporation (irrespective of whether or not at such
time, any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at such
time owned by such Person directly or indirectly through Subsidiaries, and
(b) any partnership, association, joint venture or other entity of which
such Person directly or indirectly through Subsidiaries owns at such time
more than 50% of the Capital Stock. For purposes of this Credit Agreement,
except as otherwise specified herein, neither Finco nor WPSI Inc. shall be
treated as a Subsidiary of the Borrower.
"Subsidiary Guarantor" means each of the Domestic Subsidiaries other
than the Inactive Subsidiaries, being identified as a "Subsidiary
Guarantor" on Schedule 1.1C hereto, and each Additional Credit Party which
may hereafter execute a Joinder Agreement, together with their successors
and permitted assigns, and "Subsidiary Guarantor" means any one of them.
"Swingline Commitment" means the commitment of the Swingline Lender
to make Swingline Loans in an aggregate principal amount at any time
outstanding of up to the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning assigned to such
term in Section 2.5(a).
"Swingline Lender" means NationsBank.
"Swingline Loan" shall have the meaning assigned to such term in
Section 2.5(a).
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"Swingline Note" means the promissory note of the Borrower in favor
of the Swingline Lender evidencing the Swingline Loans provided pursuant
to Section 2.5(d), as such promissory note may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to time.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an Operating Lease.
"Taxes" shall have the meaning assigned to such term in Section
3.11.
"Trade Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(ii).
"Transferred Assets" shall have the meaning assigned to such term in
the definition of "Permitted Receivables Financing" set forth in this
Section 1.1.
"Trustee" means NationsBank, N.A., and such other trustee or
co-trustee appointed under the Collateral Trust Agreement, together with
their respective successors and assigns.
"Valley" means Valley Fashions Corp., a Delaware corporation that is
the surviving entity of the Merger and changed its name to WestPoint
Stevens Inc.
"Voting Stock" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence
of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even though the
right so to vote has been suspended by the happening of such a
contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.
"WPP" means West-Point Pepperell, Inc., a Georgia corporation that
was merged with and into the Borrower in connection with the Merger.
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Banks hereunder
shall be prepared, in accordance with GAAP applied on a consistent basis, except
for departures from GAAP (i) which are not material, (y) which will not
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cause the financial statements to fail to meet the requirements of the
Securities and Exchange Commission for financial information to be contained or
incorporated by reference in registration statements, and (iii) which do not
cause the financial statements to fail to reflect accurately in all respects the
financial condition of the Borrower and its Consolidated Subsidiaries. All
calculations made for the purposes of determining compliance with this Credit
Agreement shall (except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with the most recent annual or
quarterly financial statements delivered pursuant to Section 7.1 (or, prior to
the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at December 31, 1997); provided,
however, if (a) the Credit Parties shall object to determining such compliance
on such basis at the time of delivery of such financial statements due to any
change in GAAP or the rules promulgated with respect thereto or (b) the Agent or
the Required Banks shall so object in writing within 60 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Credit
Parties to the Banks as to which no such objection shall have been made.
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein,
each Bank severally agrees to make available to the Borrower such Bank's
Revolving Commitment Percentage (as set forth on Schedule 2.1(a)) of
revolving credit loans requested by the Borrower in Dollars ("Revolving
Loans") from time to time from the Closing Date until the Maturity Date,
or such earlier date as the Revolving Commitments shall have been
terminated as provided herein; provided, however, that the sum of the
aggregate principal amount of outstanding Revolving Loans shall not exceed
FIVE HUNDRED FIFTY MILLION DOLLARS ($550,000,000) (as such aggregate
maximum amount may be reduced from time to time as provided in Section
3.4, the "Revolving Committed Amount"); provided, further, (i) with regard
to each Bank individually, such Bank's outstanding Revolving Loans shall
not exceed such Bank's Revolving Commitment, (ii) with regard to the Banks
collectively, the aggregate principal amount of outstanding Revolving
Loans plus the aggregate principal amount of outstanding Competitive
Loans, plus the Dollar Amount of the aggregate outstanding principal
amount of Foreign Currency Loans, plus the aggregate principal amount of
outstanding Swingline Loans plus the Dollar Amount of LOC Obligations
outstanding shall not exceed the Revolving Committed Amount. Revolving
Loans may consist of Base Rate Loans or Eurocurrency Loans, or a
combination thereof, as the Borrower may request; provided, however, that
no more than eight (8) Eurocurrency Loans shall be outstanding under this
Section 2.1 at any time (it being understood that, for purposes hereof,
Eurocurrency Loans with different Interest Periods shall be considered as
separate Eurocurrency Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurocurrency Loan with a single
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Interest Period). Revolving Loans hereunder may be repaid and reborrowed
in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than 12:00
noon. (Charlotte, North Carolina time) on the Business Day prior to
the date of the requested borrowing in the case of Base Rate Loans,
and on the third Business Day prior to the date of the requested
borrowing in the case of Eurocurrency Loans. Each such request for
borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount
to be borrowed, and (D) whether the borrowing shall be comprised of
Base Rate Loans, Eurocurrency Loans or a combination thereof, and if
Eurocurrency Loans are requested, the Interest Period(s) therefor.
If the Borrower shall fail to specify in any such Notice of
Borrowing (I) an applicable Interest Period in the case of a
Eurocurrency Loan, then such notice shall be deemed to be a request
for an Interest Period of one month, or (II) the type of Revolving
Loan requested, then such notice shall be deemed to be a request for
a Base Rate Loan hereunder. The Agent shall give notice to each Bank
promptly upon receipt of each Notice of Borrowing pursuant to this
Section 2.1(b)(i), the contents thereof and each such Bank's share
of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurocurrency Loan that is a
Revolving Loan shall be in a minimum aggregate principal amount of
$5,000,000 and integral multiples of $1,000,000 in excess thereof
(or the remaining amount of the Revolving Committed Amount, if
less). Each Base Rate Loan shall be in a minimum aggregate principal
amount of $1,000,000 and integral multiples of $1,000,000 in excess
thereof (or the remaining amount of the Revolving Committed Amount,
if less).
(iii) Advances. Each Bank will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Agent
for the account of the Borrower as specified in Section 3.15, or in
such other manner as the Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Agent. Such borrowing will then be made available
to the Borrower by the Agent by crediting the account of the
Borrower on the books of such office with the aggregate of the
amounts made available to the Agent by the Banks and in like funds
as received by the Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Maturity Date, unless accelerated sooner
pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
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(i) Base Rate Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the Base
Rate.
(ii) Eurocurrency Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Eurocurrency Loans,
such Eurocurrency Loans shall bear interest at a per annum rate
equal to the Adjusted Eurocurrency Rate.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) Revolving Notes. The Revolving Loans made by each Bank shall be
evidenced by a duly executed promissory note of the Borrower to such Bank
in substantially the form of Exhibit 2.1(e).
2.2 Competitive Loan Subfacility.
(a) Competitive Loans. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth herein,
the Borrower may, from time to time from the Closing Date until the
Maturity Date, request and each Bank may, in its sole discretion, agree to
make, Competitive Loans in Dollars to the Borrower; provided, however,
that (i) the aggregate principal amount of outstanding Competitive Loans
shall not at any time exceed the lesser of (a) FIVE HUNDRED FIFTY MILLION
DOLLARS ($550,000,000) or (b) the Revolving Committed Amount (the
"Competitive Loan Maximum Amount"), and (ii) the sum of the aggregate
principal amount of outstanding Revolving Loans plus the aggregate
principal amount of outstanding Competitive Loans plus the Dollar Amount
of the aggregate principal amount of outstanding Foreign Currency Loans
plus the aggregate principal amount of outstanding Swingline Loans plus
the Dollar Amount of LOC Obligations outstanding shall not at any time
exceed the Revolving Committed Amount. Each Competitive Loan shall be not
less than $10,000,000 in the aggregate and integral multiples of
$1,000,000 in excess thereof (or the remaining portion of the Competitive
Loan Maximum Amount, if less). Each Competitive Loan shall have a maturity
of at least seven (7) days but not more than three hundred sixty (360)
days.
(b) Competitive Bid Requests. The Borrower may solicit Competitive
Bids by delivery of a Competitive Bid Request substantially in the form of
Exhibit 2.2(b)-1 to the Agent by 12:00 Noon (Charlotte, North Carolina
time) on a Business Day not less than one (1) nor more than four (4)
Business Days prior to the date of a requested Competitive Loan borrowing.
A Competitive Bid Request shall specify (i) the date of the requested
Competitive Loan borrowing (which shall be a Business Day), (ii) the
amount of the requested Competitive Loan borrowing and (iii) the
applicable Interest Periods requested and shall be accompanied by payment
of the Competitive Bid Request Fee. The Agent shall, promptly following
its receipt of a Competitive Bid Request under this subsection (b), notify
the Banks of its receipt and the contents thereof and invite the Banks to
submit Competitive Bids in response thereto. A form of such notice is
provided in Exhibit 2.2(b)-2. No more than four (4) Competitive Bid
Requests (e.g., the Borrower may request Competitive Bids for no more than
four (4) different Interest Periods at a time) shall be
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submitted at any one time and Competitive Bid Requests may be made no more
frequently than once every five (5) Business Days.
(c) Competitive Bid Procedure. Each Bank may, in its sole
discretion, make one or more Competitive Bids to the Borrower in response
to a Competitive Bid Request. Each Competitive Bid must be received by the
Agent not later than 10:00 A.M. (Charlotte, North Carolina time) on the
Business Day next succeeding the date of receipt by the Agent of the
related Competitive Bid Request. A Bank may offer to make all or part of
the requested Competitive Loan borrowing and may submit multiple
Competitive Bids in response to a Competitive Bid Request. The Competitive
Bid shall specify (i) the particular Competitive Bid Request as to which
the Competitive Bid is submitted, (ii) the minimum (which shall be not
less than $10,000,000 and integral multiples of $1,000,000 in excess
thereof) and maximum principal amounts of the requested Competitive Loan
or Loans as to which the Bank is willing to make, and (iii) the applicable
interest rate or rates and Interest Period or Periods therefor. A form of
such Competitive Bid is provided in Exhibit 2.2(c). A Competitive Bid
submitted by a Bank in accordance with the provisions hereof shall be
irrevocable. The Agent shall promptly notify the Borrower of all
Competitive Bids made and the terms thereof. The Agent shall send a copy
of each of the Competitive Bids to the Borrower for its records as soon as
practicable.
(d) Submission of Competitive Bids by Agent. If the Agent, in its
capacity as a Bank, elects to submit a Competitive Bid in response to any
Competitive Bid Request, it shall submit such Competitive Bid directly to
the Borrower one-half of an hour earlier than the latest time at which the
other Banks are required to submit their Competitive Bids to the Agent in
response to such Competitive Bid Request pursuant to subsection (c) above.
(e) Acceptance of Competitive Bids. The Borrower may, in its sole
and absolute discretion, subject only to the provisions of this subsection
(e), accept or refuse any Competitive Bid offered to it. To accept a
Competitive Bid, the Borrower shall give written notification (or
telephonic notice promptly confirmed in writing) substantially in the form
of Exhibit 2.2(e) of its acceptance of any or all such Competitive Bids to
the Agent by 11:00 A.M. (Charlotte, North Carolina time) on the date on
which notice of election to make a Competitive Bid is to be given to the
Agent by any Bank; provided, however, (i) the failure by the Borrower to
give timely notice of its acceptance of a Competitive Bid shall be deemed
to be a refusal thereof, (ii) the Borrower may accept Competitive Bids
only in ascending order of rates, (iii) the aggregate amount of
Competitive Bids accepted by the Borrower shall not exceed the principal
amount specified in the Competitive Bid Request, (iv) the Borrower may
accept a portion of a Competitive Bid in the event, and to the extent,
acceptance of the entire amount thereof would cause the Borrower to exceed
the principal amount specified in the Competitive Bid Request, subject
however to the minimum amounts provided herein (and provided that where
two or more Banks submit such a Competitive Bid at the same Competitive
Bid Rate, then pro rata between or among such Banks) and (v) no bid shall
be accepted for a Competitive Loan unless such Competitive Loan is in a
minimum principal amount of $10,000,000 and integral multiples of
$1,000,000 in excess thereof, except that where a portion of a Competitive
Bid is accepted in accordance with the provisions of subsection (iv)
hereof, then in a minimum principal amount of $5,000,000 and integral
multiples of $1,000,000 in excess thereof (but not in any
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event less than the minimum amount specified in the Competitive Bid), and
in calculating the pro rata allocation of acceptances of portions of
multiple bids at a particular Competitive Bid Rate pursuant to subsection
(iv) hereof, the amounts shall be rounded to integral multiples of
$1,000,000 in a manner which shall be in the discretion of the Borrower. A
notice of acceptance of a Competitive Bid given by the Borrower in
accordance with the provisions hereof shall be irrevocable. The Agent
shall, not later than 12:00 Noon (Charlotte, North Carolina time) on the
date of receipt by the Agent of a notification from the Borrower of its
acceptance and/or refusal of Competitive Bids, notify each affected Bank
of its receipt and the contents thereof. Upon its receipt from the Agent
of notification of the Borrower's acceptance of its Competitive Bid in
accordance with the terms of this subsection (e), each successful bidding
Bank will thereupon become bound, subject to the other applicable
conditions hereof, to make the Competitive Loan in respect of which its
bid has been accepted.
(f) Funding of Competitive Loans. Each Bank which is to make a
Competitive Loan shall make its Competitive Loan borrowing available to
the Agent for the account of the Borrower at the office of the Agent
specified in Schedule 2.1(a), or at such other office as the Agent may
designate in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
date specified in the Competitive Bid Request in Dollars and in funds
immediately available to the Agent. Such borrowing will then be made
available to the Borrower by crediting the account of the Borrower on the
books of such office with the aggregate of the amount made available to
the Agent by the applicable Competitive Loan Banks and in like funds as
received by the Agent.
(g) Maturity of Competitive Loans. Each Competitive Loan shall
mature and be due and payable in full on the last day of the Interest
Period applicable thereto, unless accelerated sooner pursuant to Section
9.2. Unless the Borrower shall give notice to the Agent otherwise, the
Borrower shall be deemed to have requested a Revolving Loan borrowing in
the amount of the maturing Competitive Loan, the proceeds of which will be
used to repay such Competitive Loan.
(h) Interest on Competitive Loans. Subject to the provisions of
Section 3.1, Competitive Loans shall bear interest in each case at the
Competitive Bid Rate applicable thereto. Interest on Competitive Loans
shall be payable in arrears on each Interest Payment Date.
(i) Competitive Loan Notes. The Competitive Loans made by each Bank
shall be evidenced by the Revolving Note of the Borrower to such Bank
substantially in the form of Exhibit 2.1(e).
2.3 Foreign Currency Loan Subfacility.
(a) Foreign Currency Commitment. Subject to the terms and conditions
hereof, each Bank severally agrees to make foreign currency revolving loans in
Available Foreign Currencies (the "Foreign Currency Loans") to the Borrower and
each Foreign Borrower from time to time in the amount of such Bank's Revolving
Commitment Percentage of such Foreign Currency Loans from time to time for the
purposes hereinafter set forth; provided, that (i) the Dollar Amount
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(determined as of the most recent Determination Date) of the sum of all Foreign
Currency Loans shall not exceed FIFTY MILLION DOLLARS ($50,000,000) at any time
(the "Foreign Currency Committed Amount"), (ii) the aggregate principal amount
of outstanding Revolving Loans plus the aggregate principal amount of
outstanding Competitive Loans plus the aggregate principal amount of outstanding
Swingline Loans plus the Dollar Amount (determined as of the most recent
Determination Date) of the aggregate outstanding principal amount Foreign
Currency Loans plus the Dollar Amount of LOC Obligations shall not exceed the
Revolving Committed Amount. Foreign Currency Loans shall consist solely of
Eurocurrency Loans and may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Foreign Currency Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a Foreign
Currency Loan borrowing on its own behalf or on behalf of a Foreign
Borrower by written notice (or telephone notice promptly confirmed in
writing) to the Agent not later than 12:00 noon (Charlotte, North Carolina
time) on the third Business Day prior to the date of the requested
borrowing. Each such request for borrowing shall be irrevocable and shall
specify (A) that a Foreign Currency Loan is requested, (B) the applicable
Borrower or Foreign Borrower of such Loan, (C) the requested Available
Foreign Currency, (D) the date of the requested borrowing (which shall be
a Business Day), (E) the aggregate principal amount to be borrowed and (F)
the Interest Period(s) therefor. If the Borrower shall fail to specify in
any such Notice of Borrowing an applicable Interest Period, then such
notice shall be deemed to be a request for an Interest Period of one
month. The Agent shall give notice to each Bank promptly upon receipt of
each Notice of Borrowing, the contents thereof and each such Bank's share
of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Foreign Currency Loan shall be in a
minimum aggregate principal amount equal to the applicable Foreign
Currency Equivalent of approximately $1,500,000 and integral multiples of
the applicable Foreign Currency Equivalent of approximately $750,000 in
excess thereof (or the remaining amount of the Foreign Currency
Commitment, if less).
(iii) Advances. Each Bank will make its Revolving Commitment
Percentage of each Foreign Currency Loan borrowing available to the Agent
by 1:00 P.M., local time in the place and account specified by the Agent,
on the date specified in the applicable Notice of Borrowing by deposit
with the Agent, of same day funds in the applicable Available Foreign
Currency. Such deposit will be made to such accounts in the primary market
for such Available Foreign Currencies as the Agent shall specify from time
to time by notice to the Banks. To the extent funds are received from the
Banks, the Agent shall promptly make such funds available by wire transfer
to such accounts as the Borrower shall have specified to the Agent.
(c) Repayment. The principal amount of all Foreign Currency Loans shall be
due and payable in full in the applicable Available Foreign Currency on the
Maturity Date, unless accelerated sooner pursuant to Section 9.2.
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(d) Interest. Subject to the provisions of Section 3.1, Foreign Currency
Loans shall bear interest at a per annum rate equal to the Adjusted Eurocurrency
Rate. Interest on Foreign Currency Loans shall be payable (in the applicable
Available Foreign Currency) in arrears on each applicable Interest Payment Date
(or at such other times as may be specified herein).
(e) Notes. The Foreign Currency Loans to the Borrower shall be evidenced
by the Revolving Note of the Borrower substantially in the form of Exhibit
2.1(e). The Foreign Currency Loans to the Foreign Borrowers shall be evidenced
by Foreign Currency Notes of each such Foreign Borrower substantially in the
form of Exhibit 2.3(e).
(f) Maximum Number of Loans. The maximum number of Loans outstanding at
any one time under this Section 2.3 shall be limited to five (5).
2.4 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender agrees
to issue, and each Bank severally agrees to participate in the issuance by
the Issuing Lender of, standby and trade Letters of Credit in Dollars and
in Available Foreign Currencies from time to time from the Closing Date
until the date five (5) Business Days prior to the Maturity Date as the
Borrower may request, in a form acceptable to the Issuing Lender;
provided, however, that (i) the aggregate Dollar Amount of LOC Obligations
outstanding shall not at any time exceed FIFTY MILLION DOLLARS
($50,000,000) (the "LOC Committed Amount") and (ii) the sum of the
aggregate principal amount of outstanding Revolving Loans plus the
aggregate principal amount of outstanding Competitive Loans plus the
aggregate principal amount of outstanding Swingline Loans plus the Dollar
Amount of the aggregate outstanding principal amount of Foreign Currency
Loans plus the Dollar Amount of LOC Obligations outstanding shall not at
any time exceed the Revolving Committed Amount. No Letter of Credit shall
(x) have an original expiry date more than one year from the date of
issuance or (y) as originally issued or as extended, have an expiry date
extending beyond the Maturity Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry dates of each
Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least
five (5) Business Days prior to the requested date of issuance. The
Issuing Lender will, at least monthly and more frequently upon request,
disseminate to each of the Banks a detailed report specifying the Letters
of Credit which are then issued and outstanding and any activity with
respect thereto which may have occurred since the date of the prior
report, and including therein, among other things, the beneficiary, the
face amount and the expiry date, as well as any payment or expirations
which may have occurred.
(c) Participation. Each Bank, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse a Participation
Interest from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating
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thereto, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective Revolving
Commitment Percentages of the Banks) and shall absolutely, unconditionally
and irrevocably assume and be obligated to pay to the Issuing Lender and
discharge when due, its pro rata share of the obligations arising under
such Letter of Credit. Without limiting the scope and nature of each
Bank's Participation Interest in any Letter of Credit, to the extent that
the Issuing Lender has not been reimbursed as required hereunder or under
any such Letter of Credit, each such Bank shall pay to the Issuing Lender
its pro rata share of such unreimbursed drawing in same day funds on the
day of notification by the Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) below. The obligation of each
Bank to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event. Any such reimbursement
shall not relieve or otherwise impair the obligation of the Borrower to
reimburse the Issuing Lender under any Letter of Credit, together with
interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower
intends to otherwise reimburse the Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Banks make a Revolving
Loan in the Dollar Amount of the drawing as provided in subsection (e)
below on the related Letter of Credit, the proceeds of which will be used
to satisfy the related reimbursement obligations. The Borrower promises to
reimburse the Issuing Lender on the day of drawing under any Letter of
Credit (either with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds. If the Borrower shall fail to reimburse the
Issuing Lender as provided hereinabove, the unreimbursed Dollar Amount of
such drawing shall bear interest at a per annum rate equal to the Base
Rate plus 2%. The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any
rights of setoff, counterclaim or defense to payment the Borrower may
claim or have against the Issuing Lender, the Agent, the Banks, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Banks of the
amount of any unreimbursed drawing and each Bank shall promptly pay to the
Agent for the account of the Issuing Lender in Dollars, and in immediately
available funds, the amount of such Bank's pro rata share of such
unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Bank from the Issuing Lender if such notice is received
at or before 2:00 P.M. (Charlotte, North Carolina time) otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina
time) on the Business Day next succeeding the day such notice is received.
If such Bank does not pay such amount to the Issuing Lender in full upon
such request, such Bank shall, on demand, pay to the Agent for the account
of the Issuing Lender interest on the unpaid Dollar Amount during the
period from the date of such drawing until such Bank pays such amount to
the Issuing Lender in full at a rate per annum equal to, if paid within
two (2) Business Days of the date that such Bank is required to make
payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Base Rate. Each Bank's
obligation to make
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such payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the
obligations of the Borrower hereunder and shall be made without any
offset, abatement, withholding or reduction whatsoever. Simultaneously
with the making of each such payment by a Bank to the Issuing Lender, such
Bank shall, automatically and without any further action on the part of
the Issuing Lender or such Bank, acquire a Participation Interest in an
amount equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest
thereon and in the related LOC Documents, and shall have a claim against
the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
advance to reimburse a drawing under a Letter of Credit, the Agent shall
give notice to the Banks that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing
under a Letter of Credit, in which case a Revolving Loan advance comprised
of Base Rate Loans (or Eurocurrency Loans to the extent the Borrower has
complied with the procedures of Section 2.1(b)(i) with respect thereto)
shall be immediately made to the Borrower by all Banks (notwithstanding
any termination of the Commitments pursuant to Section 9.2) pro rata based
on the respective Revolving Commitment Percentages of the Banks
(determined before giving effect to any termination of the Commitments
pursuant to Section 9.2) and the proceeds thereof shall be paid directly
to the Issuing Lender for application to the respective LOC Obligations.
Each such Bank hereby irrevocably agrees to make its pro rata share of
each such Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed request
for Revolving Loan to be made by the time otherwise required hereunder,
(v) whether the date of such borrowing is a date on which Revolving Loans
are otherwise permitted to be made hereunder or (vi) any termination of
the Commitments relating thereto immediately prior to or contemporaneously
with such borrowing. In the event that any Revolving Loan cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party),
then each such Bank hereby agrees that it shall forthwith purchase (as of
the date such borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and prior to
such purchase) from the Issuing Lender such Participation Interests in the
outstanding LOC Obligations as shall be necessary to cause each such Bank
to share in such LOC Obligations ratably (based upon the respective
Revolving Commitment Percentages of the Banks (determined before giving
effect to any termination of the Commitments pursuant to Section 9.2)),
provided that at the time any purchase of Participation Interests pursuant
to this sentence is actually made, the purchasing Bank shall be required
to pay to the Issuing
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Lender, to the extent not paid to the Issuing Lender by the Borrower in
accordance with the terms of subsection (d) above, interest on the Dollar
Amount of Participation Interests purchased for each day from and
including the day upon which such borrowing would otherwise have occurred
to but excluding the date of payment for such Participation Interests, at
the rate equal to, if paid within two (2) Business Days of the date of the
Revolving Loan advance, the Federal Funds Rate, and thereafter at a rate
equal to the Base Rate.
(f) Designation of Consolidated Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.4(a), a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Consolidated Party other than the
Borrower, provided that notwithstanding such statement, the Borrower shall
be the actual account party for all purposes of this Credit Agreement for
such Letter of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as
the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may
be incorporated therein and deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section 2.4, the
Borrower hereby agrees to pay, and protect, indemnify and save each Bank
harmless from and against, any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that such Bank may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Banks (including the Issuing
Lender), the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. No Bank
(including the Issuing Lender) shall be responsible: (A) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (B) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid
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or ineffective for any reason; (C) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (D) for
any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from causes beyond
the control of such Bank, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the vesting of
the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
any Bank (including the Issuing Lender), under or in connection with any
Letter of Credit or the related certificates, if taken or omitted in good
faith, shall not put such Bank under any resulting liability to the
Borrower or any other Credit Party. It is the intention of the parties
that this Credit Agreement shall be construed and applied to protect and
indemnify each Bank (including the Issuing Lender) against any and all
risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Borrower (on behalf of itself and each of
the other Credit Parties), including, without limitation, any and all
Government Acts. No Bank (including the Issuing Lender) shall, in any way,
be liable for any failure by such Bank or anyone else to pay any drawing
under any Letter of Credit as a result of any Government Acts or any other
cause beyond the control of such Bank.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i) shall
survive the termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Banks (including the Issuing Lender) to
enforce any right, power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify any
Bank (including the Issuing Lender) in respect of any liability incurred
by such Bank (A) arising solely out of the gross negligence or willful
misconduct of such Bank, as determined by a court of competent
jurisdiction, or (B) caused by such Bank's failure to pay under any Letter
of Credit after presentation to it of a request strictly complying with
the terms and conditions of such Letter of Credit, as determined by a
court of competent jurisdiction, unless such payment is prohibited by any
law, regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Banks
are only those expressly set forth in this Credit Agreement and that the
Issuing Lender shall be entitled to assume that the conditions precedent
set forth in Section 5.2 have been satisfied unless it shall have acquired
actual knowledge that any such condition precedent has not been satisfied;
provided, however, that nothing set forth in this Section 2.4 shall be
deemed to prejudice the right of any Bank to recover from the Issuing
Lender any amounts made available by such Bank to the Issuing Lender
pursuant to this Section 2.4 in the event that it is determined by a court
of competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part of
the Issuing Lender.
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(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter
of credit application), this Credit Agreement shall control.
2.5 Swingline Loan Subfacility.
(a) Swingline Commitment. Subject to the terms and conditions hereof and
in reliance upon the representations and warranties set forth herein, the
Swingline Lender, in its individual capacity, agrees to make certain revolving
credit loans requested by the Borrower in Dollars to the Borrower (each a
"Swingline Loan" and, collectively, the "Swingline Loans") from time to time
from the Closing Date until the Maturity Date for the purposes hereinafter set
forth; provided, however, (i) the aggregate principal amount of Swingline Loans
outstanding at any time shall not exceed TWENTY-FIVE MILLION DOLLARS
($25,000,000) (the "Swingline Committed Amount"), and (ii) the aggregate
principal amount of outstanding Revolving Loans plus the aggregate principal
amount of outstanding Competitive Loans plus the Dollar Amount of the aggregate
outstanding principal amount of Foreign Currency Loans plus the aggregate
principal amount of outstanding Swingline Loans plus the Dollar Amount of LOC
Obligations outstanding shall not exceed the Revolving Committed Amount.
Swingline Loans hereunder shall be made as Base Rate Loans, and may be repaid
and reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the Borrower desires a Swingline
Loan advance hereunder it shall give written notice (or telephonic notice
promptly confirmed in writing) to the Swingline Lender not later than
12:00 noon (Charlotte, North Carolina time) on the Business Day of the
requested Swingline Loan advance. Each such notice shall be irrevocable
and shall specify (A) that a Swingline Loan advance is requested, (B) the
date of the requested Swingline Loan advance (which shall be a Business
Day) and (C) the principal amount of the Swingline Loan advance requested.
Each Swingline Loan shall be made as a Base Rate Loan and shall have as a
maturity date the earlier of (x) the second Business Day after demand by
the Swingline Lender for repayment thereof, and (y) the Maturity Date. The
Swingline Lender shall initiate the transfer of funds representing the
Swingline Loan advance to the Borrower by 4:00 P.M. (Charlotte, North
Carolina time) on the Business Day of the requested borrowing.
(ii) Minimum Amounts. Each Swingline Loan advance shall be in a
minimum principal amount of $500,000 and in integral multiples of $500,000
in excess thereof (or the remaining amount of the Swingline Committed
Amount, if less).
(iii) Repayment of Swingline Loans. The principal amount of all
Swingline Loans shall be due and payable on the earlier of (A) the second
Business Day after demand by the Swingline Lender for repayment thereof,
and (B) the Maturity Date. The Swingline Lender may, at any time, in its
sole discretion, by written notice to the Borrower and the Banks, demand
repayment of its Swingline Loans by way of a Revolving Loan advance, in
which case the Borrower shall be deemed to have requested a Revolving Loan
advance comprised solely of Base Rate Loans in the amount of such
Swingline Loans; provided,
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however, that any such demand shall be deemed to have been given one
Business Day prior to the Maturity Date and on the date of the occurrence
of any Event of Default described in Section 9.1 and upon acceleration of
the indebtedness hereunder and the exercise of remedies in accordance with
the provisions of Section 9.2. Each Bank hereby irrevocably agrees to make
its pro rata share of each such Revolving Loan in the amount, in the
manner and on the date specified in the preceding sentence notwithstanding
(I) the amount of such borrowing may not comply with the minimum amount
for advances of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 5.2 are then satisfied, (III) whether
a Default or an Event of Default then exists, (IV) failure of any such
request or deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (V) whether the date of such borrowing is a
date on which Revolving Loans are otherwise permitted to be made hereunder
or (VI) any termination of the Commitments relating thereto immediately
prior to or contemporaneously with such borrowing. In the event that any
Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower or any other Credit Party), then each Bank hereby agrees that it
shall forthwith purchase (as of the date such borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on
or after such date and prior to such purchase) from the Swingline Lender
such Participations Interest in the outstanding Swingline Loans as shall
be necessary to cause each such Bank to share in such Swingline Loans
ratably based upon its Commitment Percentage of the Revolving Committed
Amount (determined before giving effect to any termination of the
Commitments pursuant to Section 3.4), provided that (A) all interest
payable on the Swingline Loans shall be for the account of the Swingline
Lender until the date as of which the respective Participation Interest is
purchased and (B) at the time any purchase of Participation Interests
pursuant to this sentence is actually made, the purchasing Bank shall be
required to pay to the Swingline Lender, to the extent not paid to the
Swingline Lender by the Borrower in accordance with the terms of
subsection (c)(ii) below, interest on the principal amount of
Participation Interests purchased for each day from and including the day
upon which such borrowing would otherwise have occurred to but excluding
the date of payment for such Participation Interests, at the rate equal to
the Federal Funds Rate.
(c) Interest on Swingline Loans. Subject to the provisions of Section 3.1,
each Swingline Loan shall bear interest at a per annum rate (computed on the
basis of the actual number of days elapsed over a year of 365 days) equal to the
Base Rate. Interest on Swingline Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be specified
herein), unless accelerated sooner pursuant to Section 9.2.
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in an original
principal amount equal to the Swingline Committed Amount substantially in the
form of Exhibit 2.5(d).
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SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Base Rate plus 2%).
3.2 Extension and Conversion.
Subject to the terms of Section 5.2, the Borrower and each Foreign
Borrower shall have the option, on any Business Day, to extend existing Loans
into a subsequent permissible Interest Period or to convert Loans into Loans of
another interest rate type; provided, however, that (i) except as provided in
Section 3.8, Eurocurrency Loans may be converted into Base Rate Loans only on
the last day of the Interest Period applicable thereto, (ii) Eurocurrency Loans
may be extended, and Base Rate Loans may be converted into Eurocurrency Loans,
only if no Default or Event of Default is in existence on the date of extension
or conversion, (iii) Loans extended as, or converted into, Eurocurrency Loans
shall be subject to the terms of the definition of "Interest Period" set forth
in Section 1.1 and shall be in such minimum amounts as provided in Section
2.1(b)(ii) or 2.3(b)(ii) as applicable, (iv) no more than eight Eurocurrency
Loans shall be outstanding under Section 2.1 at any time and no more than five
Foreign Currency Loans shall be outstanding at any time (it being understood
that, for purposes hereof, Loans with different Interest Periods shall be
considered as separate Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Loan with a single Interest Period), (v) any request for extension or conversion
of a Eurocurrency Loan which shall fail to specify an Interest Period shall be
deemed to be a request for an Interest Period of one month and (vi) Competitive
Loans and Swingline Loans may not be extended or converted pursuant to this
Section 3.2. Each such extension or conversion shall be effected by the Borrower
(on its own behalf or on behalf of a Foreign Borrower, as applicable) by giving
a Notice of Extension/Conversion (or telephonic notice promptly confirmed in
writing) to the office of the Agent specified in specified in Schedule 2.1(a),
or at such other office as the Agent may designate in writing, prior to 12:00
noon (Charlotte, North Carolina time) on the Business Day of, in the case of the
conversion of a Eurocurrency Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the extension of a Eurocurrency Loan as,
or conversion of a Base Rate Loan into, a Eurocurrency Loan, the date of the
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods and Available Foreign Currency with respect thereto. In the
event the Borrower fails to request extension or conversion of any Eurocurrency
Loan in accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then (i) in the case of any Eurocurrency
Loan which is not a Foreign Currency Loan, such Eurocurrency Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest Period
applicable thereto, and (ii) in the case of any Foreign
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Currency Loan, such Eurocurrency Loan shall be automatically continued as a
Eurocurrency Loan in the same Available Foreign Currency for an Interest Period
of one month. The Agent shall give each Bank notice as promptly as practicable
of any such proposed extension or conversion affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower (and as applicable each Foreign
Borrower) shall have the right to prepay Loans in whole or in part from time to
time; provided, however, that each partial prepayment of Loans shall be (i) in
the case of Revolving Loans and Foreign Currency Loans, in a minimum principal
Dollar Amount of $3,000,000 and integral multiples of $1,000,000, and (ii) in
the case of Swingline Loans, in a minimum principal amount of $500,000 and
integral multiples of $500,000. Subject to the foregoing terms, amounts prepaid
under this Section 3.3(a) shall be applied as the Borrower may elect; provided
that if the Borrower fails to specify a voluntary prepayment then such
prepayment shall be applied to Revolving Loans first to Base Rate Loans, then to
Eurocurrency Loans denominated in Dollars in direct order of Interest Period
maturities, and then to Eurocurrency Loans denominated in Available Foreign
Currencies in direct order of Interest Period maturities. All prepayments under
this Section 3.3(a) shall be subject to Section 3.12, but otherwise without
premium or penalty, and be accompanied by interest on the principal amount
prepaid through the date of prepayment.
(b) Mandatory Prepayments.
(i) In Excess of Committed Amounts. If at any time, (A) the sum of
the aggregate principal amount of outstanding Revolving Loans plus the
aggregate principal amount of outstanding Competitive Loans, plus the
Dollar Amount of the aggregate principal amount of outstanding Foreign
Currency Loans plus the aggregate principal amount of outstanding
Swingline Loans, plus the Dollar Amount of LOC Obligations outstanding
shall exceed the Revolving Committed Amount, or (B) the aggregate
principal amount of outstanding Competitive Loans shall exceed the
Competitive Loan Maximum Amount, or (C) the aggregate principal amount of
outstanding Swingline Loans shall exceed the Swingline Committed Amount,
or (D) the Dollar Amount of the aggregate principal amount of outstanding
Foreign Currency Loans shall exceed the Foreign Currency Commitment, then
the Borrower immediately shall prepay the Revolving Loans (or, after all
Revolving Loans have been repaid, cash collateralize the LOC Obligations),
Competitive Loans, Foreign Currency Loans and/or the Swingline Loans (as
the case may be) in an amount sufficient to eliminate such excess.
(ii) Asset Dispositions. Immediately upon the occurrence of any
Asset Disposition (other than an Excluded Asset Disposition), the Borrower
shall prepay the Loans in an aggregate amount equal to the Net Cash
Proceeds of the related Asset Disposition.
(iii) Application of Mandatory Prepayments. All amounts required to
be paid pursuant to this Section 3.3(b) shall be applied (i) first to the
payment of Base Rate Loans and second to the payment of Eurocurrency Rate
Loans (and after all Revolving Loans have been repaid to a cash collateral
account in respect of LOC Obligations); and (ii) within
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Eurocurrency Rate Loans, first to Eurocurrency Loans denominated in
Dollars in direct order of Interest Period maturities, and then to
Eurocurrency Loans denominated in Available Foreign Currencies in direct
order of Interest Period maturities, provided that all prepayments of
Eurocurrency Rate Loans are subject to the provisions of Section 3.12. and
shall be accompanied by interest on the principal amount prepaid through
the date of prepayment.
3.4 Termination and Reduction of Revolving Committed Amount.
(a) Voluntary Reductions. The Borrower may from time to time permanently
reduce or terminate the Revolving Committed Amount in whole or in part (in
minimum aggregate amounts of $5,000,000 or in integral multiples of $1,000,000
in excess thereof (or, if less, the full remaining amount of the then applicable
Revolving Committed Amount)) upon five Business Days' prior written notice to
the Agent; provided, however, no such termination or reduction shall be made
which would cause the aggregate principal amount of outstanding Revolving Loans
plus the aggregate principal amount of outstanding Competitive Loans, plus the
Dollar Amount of the aggregate principal amount of outstanding Foreign Currency
Loans, plus the Dollar Amount of LOC Obligations outstanding, plus the aggregate
principal amount of the outstanding Swingline Loans, to exceed the Revolving
Committed Amount, unless, concurrently with such termination or reduction, the
Revolving Loans are repaid to the extent necessary to eliminate such excess. The
Agent shall promptly notify each Bank of receipt by the Agent of any notice from
the Borrower pursuant to this Section 3.4(a).
(b) Mandatory Reductions. On any date that the Loans are required to be
prepaid pursuant to the terms of Section 3.3(b)(ii), the Revolving Committed
Amount automatically shall be permanently reduced by the amount of such required
prepayment and/or reduction.
(c) Maturity Date. The Revolving Commitments of the Banks, the Foreign
Currency Commitment of the Banks, the Swingline Commitment of the Swingline
Lender and the LOC Commitment of the Issuing Lender shall automatically
terminate on the Maturity Date.
(d) General. The Borrower shall pay to the Agent for the account of the
Banks in accordance with the terms of Section 3.5(b), on the date of each
termination or reduction of the Revolving Committed Amount, the Facility Fee
accrued through the date of such termination or reduction on the amount of the
Revolving Committed Amount so terminated or reduced.
3.5 Fees.
(a) Administrative Fees. The Borrower agrees to pay to the Agent,
for its own account and NationsBanc Montgomery Securities LLC, as
applicable, the fees referred to in the Agent's Fee Letter (collectively,
the "Agent's Fees").
(b) Facility Fee. In consideration of the Revolving Commitments of
the Banks hereunder, the Borrower agrees to pay to the Agent for the
account of each Bank a fee (the "Facility Fee") on the Revolving Committed
Amount computed at a per annum rate of 0.25%. The Facility Fee shall
commence to accrue on the Closing Date and shall be due and payable in
arrears on the last Business Day of each March, June, September and
December
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(and any date that the Revolving Committed Amount is reduced as provided
in Section 3.4(a) or (b)) and the Maturity Date for the immediately
preceding quarter (or portion thereof), beginning with the first of such
dates to occur after the Closing Date.
(c) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In consideration of
the issuance of standby Letters of Credit hereunder, the Borrower
promises to pay to the Agent for the account of each Bank a fee (the
"Standby Letter of Credit Fee") on such Bank's Revolving Commitment
Percentage of the average daily maximum amount available to be drawn
under each such standby Letter of Credit computed at a per annum
rate for each day from the date of issuance to the date of
expiration equal to the Applicable Percentage. The Standby Letter of
Credit Fee will be payable quarterly in arrears on the last Business
Day of each March, June, September and December for the immediately
preceding quarter (or a portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In consideration of
the issuance of trade Letters of Credit hereunder, the Borrower
promises to pay to the Agent for the account of each Bank a fee (the
"Trade Letter of Credit Fee") on such Bank's Revolving Commitment
Percentage of the average daily maximum amount available to be drawn
under each such trade Letter of Credit computed at a per annum rate
for each day from the date of issuance to the date of expiration
equal to the Applicable Percentage. The Trade Letter of Credit Fee
will be payable quarterly in arrears on the last Business Day of
each March, June, September and December for the immediately
preceding quarter (or portion thereof).
(iii) Issuing Lender Fees. In addition to the Standby Letter
of Credit Fee payable pursuant to clause (i) above and the Trade
Letter of Credit Fee payable pursuant to clause (ii) above, the
Borrower promises to pay to the Issuing Lender for its own account
without sharing by the other Banks the letter of credit fronting fee
of 0.125% of the face amount of each Letter of Credit, together with
standard negotiation fees and other customary charges from time to
time of the Issuing Lender with respect to the issuance, amendment,
transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the "Issuing
Lender Fees").
(d) Competitive Bid Request Fee. The Borrower shall make payment to
the Agent for each Competitive Bid Request of a Competitive Bid
administration fee (the "Competitive Bid Request Fee" of $2,500.00
concurrently with delivery of any Competitive Bid Request (whether or not
any Competitive Bid is offered by a Bank or accepted by the Borrower and
whether or nor any Competitive Loan is extended by any Bank in connection
with such Competitive Bid Request).
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3.6 Capital Adequacy.
If any Bank has determined that the adoption or the becoming effective of,
or any change in, or any change by any Governmental Authority, central Bank or
comparable agency charged with the interpretation or administration thereof in
the interpretation or administration of, any applicable law, rule or regulation
regarding capital adequacy, in each case after the Closing Date, or compliance
by such Bank with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central Bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Bank could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy), then, upon
notice from such Bank to the Borrower, the Borrower shall be obligated to pay to
such Bank such additional amount or amounts as will compensate such Bank for
such reduction. Each determination by any such Bank of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto.
3.7 Unavailability.
In the event, and on each occasion, that on the day two (2) Business Days
prior to the commencement of any Interest Period for a Eurocurrency Loan of any
amount, Interest Period or Available Foreign Currency, the Agent shall have
determined or shall have been notified by the Required Banks (a) that deposits
in the relevant amount in the relevant Available Foreign Currency and for the
relevant Interest Period are not available in the relevant market to the
Required Banks, or that reasonable means do not exist for ascertaining the
Eurocurrency Rate for any such Loan, or that Loans cannot be made in a
particular Available Foreign Currency, or (b) that the rates at which such
deposits are being offered will not adequately and fairly reflect the cost to
the Required Banks of making or maintaining its Eurocurrency Loan during such
Interest Period, the Agent shall promptly give written or telecopy notice of
such determination to the Borrower and the Banks. In the event of any such
determination, until the Agent shall have advised the Borrower and the Banks
that the circumstances giving rise to such notice no longer exist, any request
by the Borrower for a Eurocurrency Loan of the affected amount, Interest Period
or Available Foreign Currency, or a conversion to or continuation of a
Eurocurrency Loan of the affected amount, Interest Period or Available Foreign
Currency, shall be deemed rescinded. Each determination by the Agent hereunder
shall be conclusive absent manifest error.
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Bank or its Applicable Lending Office to make,
maintain, or fund any Eurocurrency Loans hereunder, then such Bank shall
promptly notify the Borrower thereof and such Bank's obligation to make or
Continue Eurocurrency Loans (or Foreign Currency Loans in any affected Available
Foreign Currency, as applicable) and to Convert Base Rate Loans into
Eurocurrency Loans shall be suspended until such time as such Bank may again
make, maintain, and fund Eurocurrency Loans (or Foreign Currency Loans in the
affected Available Foreign Currency, as applicable), in which case the
provisions of Section 3.10 shall be applicable.
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3.9 Requirements of Law.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central Bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central Bank, or comparable agency:
(i) shall subject such Bank (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurocurrency Loans,
Foreign Currency Loans, its Notes, or its obligation to make Eurocurrency
Loans or Foreign Currency Loans, or change the basis of taxation of any
amounts payable to such Bank (or its Applicable Lending Office) under this
Credit Agreement or its Notes in respect of any Eurocurrency Loans or
Foreign Currency Loans (other than taxes imposed on the overall net income
of such Bank by the jurisdiction in which such Bank has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurocurrency
Reserve Requirement utilized in the determination of the Adjusted
Eurocurrency Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such Bank
(or its Applicable Lending Office), including the Commitment of such Bank
hereunder; or
(iii) shall impose on such Bank (or its Applicable Lending Office)
or the London interbank market any other condition affecting this Credit
Agreement or its Notes or any of such extensions of credit or liabilities
or commitments;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurocurrency Loans or making, continuing or maintaining any
Foreign Currency Loans, or to reduce any sum received or receivable by such Bank
(or its Applicable Lending Office) under this Credit Agreement or its Notes with
respect to any Eurocurrency Loans or Foreign Currency Loans, then the Borrower
shall pay to such Bank on demand such amount or amounts as will compensate such
Bank for such increased cost or reduction. If any Bank requests compensation by
the Borrower under this Section 3.9, the Borrower may, by notice to such Bank
(with a copy to the Agent), suspend the obligation of such Bank to make or
Continue Eurocurrency Loans, or to Convert Base Rate Loans into Eurocurrency
Loans or to make or continue Foreign Currency Loans, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 3.10 shall be applicable); provided that such suspension
shall not affect the right of such Bank to receive the compensation so
requested. Each Bank shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to it. Any Bank claiming
compensation under this Section 3.9 shall furnish to the Borrower and the Agent
a statement setting
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forth the additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
3.10 Treatment of Affected Loans.
(a) If the obligation of any Bank to make or continue any Foreign Currency
Loans shall be suspended pursuant to Section 3.8 or 3.9 hereof, such Bank's
Foreign Currency Loans in the affected Available Foreign Currency shall be
automatically converted into Eurocurrency Loans denominated in Dollars on the
last day(s) of the then current Interest Period(s) for such Foreign Currency
Loans (or, in the case of a conversion required by Section 3.8 hereof, on such
earlier date as such Bank may specify to the Borrower with a copy to the Agent),
and unless and until such Bank gives notice to the Borrower that the
circumstances specified in Section 3.8 or 3.9 no longer exist, all Foreign
Currency Loans in the affected Available Foreign Currency that would otherwise
be made or continued by such Bank shall be made as Eurocurrency Loans
denominated in Dollars, and all requests for a Foreign Currency Loan in the
affected Available Foreign Currency from such Bank shall be deemed to be a
request for a Eurocurrency Loan denominated in Dollars.
(b) Except as provided in preceding subsection (a), if the obligation of
any Bank to make any Eurocurrency Loan or to Continue, or to Convert Base Rate
Loans into, Eurocurrency Loans shall be suspended pursuant to Section 3.8 or 3.9
hereof, such Bank's Eurocurrency Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest Period(s) for
such Eurocurrency Loans (or, in the case of a Conversion required by Section 3.8
hereof, on such earlier date as such Bank may specify to the Borrower with a
copy to the Agent) and, unless and until such Bank gives notice as provided
below that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such Bank's Eurocurrency Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Bank's Eurocurrency Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Bank
as Eurocurrency Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Bank that would otherwise be
Converted into Eurocurrency Loans shall remain as Base Rate Loans.
If such Bank gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
conversion of such Bank's Loans pursuant to this Section 3.10 no longer exist
(which such Bank agrees to do promptly upon such circumstances ceasing to exist)
at a time when Foreign Currency Loans of the affected Available Foreign Currency
or Eurocurrency Loans (as applicable) made by other Banks are outstanding, such
Bank's affected Loans shall be automatically re-converted, on the first day(s)
of the next succeeding Interest Period(s) for such outstanding Foreign Currency
Loans or Eurocurrency Loans (as applicable), to the extent necessary so that,
after giving effect thereto, all Loans held by the Banks are held pro rata (as
to principal amounts, interest rate basis, Available Foreign Currencies and
Interest Periods) in accordance with their respective Commitments.
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3.11 Taxes.
(a) Any and all payments by any Credit Party to or for the account of any
Bank or the Agent hereunder or under any other Credit Document shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Bank and the
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank (or its Applicable Lending
Office) or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If any Credit Party shall be required by law to deduct any Taxes
from or in respect of any sum payable under this Credit Agreement or any other
Credit Document to any Bank or the Agent, (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 3.11) such Bank or the
Agent receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Credit Party shall make such deductions, (iii)
such Credit Party shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and (iv) such
Credit Party shall furnish to the Agent, at its address referred to in Section
11.1, the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Credit Agreement or
any other Credit Document or from the execution or delivery of, or otherwise
with respect to, this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Bank and the Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 3.11) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Bank that is not a United States person under Section 7701(a)(30)
of the Code, on or prior to the date of its execution and delivery of this
Credit Agreement in the case of each Bank listed on the signature pages hereof
and on or prior to the date on which it becomes a Bank in the case of each other
Bank, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Bank remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Credit Agreement is effectively connected with the
conduct of a trade or business in the United States, (ii) Internal Revenue
Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate required by
any taxing authority (including any certificate required by Sections 871(h) and
881(c) of the Internal Revenue Code), certifying that such Bank is entitled to
an exemption from or a reduced rate of tax on payments pursuant to this Credit
Agreement or any of the other Credit
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Documents. Without limiting the generality of the foregoing, each Bank (other
than any Qualifying Bank) shall, as soon as is reasonably practicable after the
Closing Date, file a form FD 13 with the United States Internal Revenue Service
in relation to payments made or to be made by the Foreign Borrowers under this
Credit Agreement and any Foreign Currency Notes. If the United States Internal
Revenue Service determines that the form FD 13 filed by such Bank does not
establish that the Bank is entitled to receive payments made by the Borrowers
under this Credit Agreement and the Foreign Currency Notes as at the date of
delivery thereof without deduction or withholding of United Kingdom withholding
taxes, such Bank shall, within forty-five (45) days after a written request from
the Foreign Borrowers, offer such reasonable assistance as the Foreign Borrowers
may request in order to establish such Bank's entitlement (if any) to receive
payments made by the Foreign Borrowers under this Credit Agreement and any
Foreign Currency Notes without deduction or withholding of United Kingdom
withholding taxes. No Foreign Borrower shall be required to pay any amounts to
any Bank in respect of any deduction or withholding of United Kingdom
withholding taxes otherwise payable under this Section 3.11 (and a Foreign
Borrower, if required by law to do so, shall be entitled to withhold such
amounts and pay such amounts to the government of the United Kingdom) if the
obligation to pay such additional amounts would not have arisen but for a
failure by such Bank to provide the Foreign Borrowers with the requested forms
or other reasonable assistance. Each Person that shall become a Bank or a
participant of a Bank pursuant to Section 11.3(b) shall, upon the effectiveness
of the related transfer, be required to provide all of the forms,
certifications, and statements required pursuant to this section, provided that
in the case of a participant of a Bank the obligations of such participant
pursuant to this subsection (d) shall be determined as if the participant were a
Bank, except that such participant shall furnish all such required forms,
certifications and statements to the Bank from which the related participation
shall have been purchased.
(e) For any period with respect to which a Bank has failed to provide the
Borrower and the Agent with the appropriate form pursuant to Section 3.11(d)
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Bank shall not be entitled to indemnification under Section 3.11(a) or
3.11(b) with respect to Taxes imposed by the United States.
(f) If any Credit Party is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 3.11, then such Bank will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Bank, is not otherwise
disadvantageous to such Bank.
(g) Within thirty (30) days after the date of any payment of Taxes, the
applicable Credit Party shall furnish to the Agent the original or a certified
copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the Credit
Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
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3.12 Compensation.
Upon the request of any Bank, the Borrower shall pay to such Bank such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost, or expense incurred by it as a result
of:
(a) any payment, prepayment, or Conversion of a Eurocurrency Loan or
a Competitive Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9.2) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurocurrency
Loan on the date for such borrowing, Conversion, Continuation, or
prepayment specified in the relevant notice of borrowing, prepayment,
Continuation, or Conversion under this Credit Agreement.
With respect to Eurocurrency Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurocurrency Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Bank) which would have accrued to
such Bank on such amount by placing such amount on deposit for a comparable
period with leading Banks in the interbank Eurocurrency market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.13 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of Section
3.3) prepayment of principal of any Loan or reimbursement obligations arising
from drawings under Letters of Credit, each payment of interest on the Loans or
reimbursement obligations arising from drawings under Letters of Credit, each
payment of Facility Fees, each payment of the Standby Letter of Credit Fee, each
payment of the Trade Letter of Credit Fee, each reduction of the Revolving
Committed Amount and each conversion or extension of any Loan, shall be
allocated pro rata among the Banks in accordance with the respective principal
amounts of their outstanding Loans and Participation Interests.
(b) Advances. No Bank shall be responsible for the failure or delay by any
other Bank in its obligation to make its ratable share of a borrowing hereunder;
provided, however, that the failure of any Bank to fulfill its obligations
hereunder shall not relieve any other Bank of its obligations hereunder. Unless
the Agent shall have been notified by any Bank prior to the date of
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any requested borrowing that such Bank does not intend to make available to the
Agent its ratable share of such borrowing to be made on such date, the Agent may
assume that such Bank has made such amount available to the Agent on the date of
such borrowing, and the Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent, the Agent shall be able to recover such corresponding amount from
such Bank. If such Bank does not pay such corresponding amount forthwith upon
the Agent's demand therefor, the Agent will promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the Agent. The
Agent shall also be entitled to recover from the Bank or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the Agent at a
per annum rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a Bank at
the Federal Funds Rate (or, in the case of a Foreign Currency Loan, interest on
the daily Dollar Equivalent thereof).
3.14 Sharing of Payments.
The Banks agree among themselves that, in the event that any Bank shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Bank under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Bank under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, in excess of its pro rata share of such payment as provided for in
this Credit Agreement, such Bank shall promptly purchase from the other Banks a
Participation Interest in such Loans, LOC Obligations and other obligations in
such amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all Banks share such payment in accordance with their
respective ratable shares as provided for in this Credit Agreement. The Banks
further agree among themselves that if payment to a Bank obtained by such Bank
through the exercise of a right of setoff, banker's lien, counterclaim or other
event as aforesaid shall be rescinded or must otherwise be restored, each Bank
which shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Bank whose payment shall have been rescinded or otherwise restored. The
Borrower agrees that any Bank so purchasing such a Participation Interest may,
to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Bank were a holder of such Loan, LOC
Obligations or other obligation in the amount of such Participation Interest.
Except as otherwise expressly provided in this Credit Agreement, if any Bank or
the Agent shall fail to remit to the Agent or any other Bank an amount payable
by such Bank or the Agent to the Agent or such other Bank pursuant to this
Credit Agreement on the date when such amount is due, such payments shall be
made together with interest thereon for each date from the date such amount is
due until the date such amount is paid to the Agent or such other Bank at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Bank receives a secured claim in lieu of a
setoff to which this Section 3.14 applies, such Bank shall, to the extent
practicable, exercise its rights in respect of such secured
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claim in a manner consistent with the rights of the Banks under this Section
3.14 to share in the benefits of any recovery on such secured claim.
3.15 Payments, Computations, Etc.
(a) Currency of Payments. Each payment on account of an amount due from
any Credit Party hereunder or under any other Credit Document shall be made by
such Credit Party to the Agent for the pro rata account of the Banks entitled to
receive such payment as provided herein in the currency in which such amount is
denominated and in such funds as are customary at the place and time of payment
for the settlement of international payments in such currency. Without limiting
the terms of the preceding sentence, accrued interest on any Loans denominated
in an Available Foreign Currency shall be payable in the same Available Foreign
Currency as such Loan. Upon request, the Agent will give the Credit Parties a
statement showing the computation used in calculating such amount, which
statement shall be conclusive in the absence of manifest error. The obligation
of each Credit Party to make each payment on account of such amount in the
currency in which such amount is denominated shall not be discharged or
satisfied by any tender, or any recovery pursuant to any judgment, which is
expressed in or converted into any other currency, except to the extent such
tender or recovery shall result in the actual receipt by the Agent of the full
amount in the appropriate currency payable hereunder. Each Credit Party agrees
that its obligation to make each payment on account of such amount in the
currency in which such amount is denominated shall be enforceable as an
additional or alternative claim for recovery in such currency of the amount (if
any) by which such actual receipt shall fall short of the full amount of such
currency payable hereunder, and shall not be affected by judgment being obtained
for such amount.
(b) Procedure for Payments. All payments hereunder shall be made to the
Agent (or as applicable, the Swingline Lender) in immediately available funds,
without setoff, deduction, counterclaim or withholding of any kind, at (i) in
the case of payments in Dollars, the Agent's office specified in Schedule 2.1(a)
not later than 1:00 P.M. (Charlotte, North Carolina time) on the date when due,
and (ii) in the case of payments in Available Foreign Currencies, at such place
or places as may be designated by the Agent from time to time not later than
12:00 noon local time in the place where such payment is required. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. The Agent may (but shall not be obligated to) debit the
amount of any such payment which is not made by such time to any ordinary
deposit account of the Borrower or any other Credit Party maintained with the
Agent (with notice to the Borrower or such other Credit Party); provided,
however, that the Agent shall apply the proceeds of any deposit account of a
Foreign Borrower only to Credit Party Obligations of such Foreign Borrower. The
Borrower (or as applicable, each Foreign Borrower) shall, at the time it makes
any payment under this Credit Agreement, specify to the Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable hereunder to which such
payment is to be applied (and in the event that it fails so to specify, or if
such application would be inconsistent with the terms hereof, the Agent shall
distribute such payment to the Banks in such manner as the Agent may determine
to be appropriate in respect of obligations owing by the Credit Parties
hereunder, subject to the terms of Section 3.13(a)). The Agent will promptly
distribute in same day funds to each Bank such Bank's share, if any, of payments
received by the Agent for the account of such Bank. Whenever any payment
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day (subject
to accrual
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of interest and Fees for the period of such extension), except that in the case
of Eurocurrency Loans, if the extension would cause the payment to be made in
the next following calendar month, then such payment shall instead be made on
the next preceding Business Day. Except as expressly provided otherwise herein,
all computations of interest and fees shall be made on the basis of actual
number of days elapsed over a year of 365 or 366 days, as appropriate, except
with respect to computation of interest on Eurocurrency Loans which shall be
calculated based on a year of 360 days (unless in the case of any Foreign
Currency Loans interest may be calculated with respect to the applicable
Available Foreign Currency on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as applicable). Interest shall accrue from and
include the date of borrowing, but exclude the date of payment.
(c) Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received by the Agent or any Bank on account of the Credit Party Obligations or
any other amounts outstanding under any of the Credit Documents or in respect of
the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent and/or the Trustee in connection with enforcing the rights of the
Banks under the Credit Documents and any protective advances made by the
Trustee with respect to the Collateral under or pursuant to the terms of
the Collateral Documents;
SECOND, to payment of any fees owed to the Agent or the Trustee;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Banks in connection with enforcing its rights under the Credit
Documents or otherwise with respect to the Credit Party Obligations owing
to such Bank;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations (including all
obligations arising under Hedging Agreements) and other obligations which
shall have become due and payable under the Credit Documents or otherwise
and not repaid pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the
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Banks shall receive an amount equal to its pro rata share (based on the
proportion that the then outstanding Loans and LOC Obligations held by such Bank
bears to the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and
"SIXTH" above; and (iii) to the extent that any amounts available for
distribution pursuant to clause "FIFTH" above are attributable to the issued but
undrawn amount of outstanding Letters of Credit, such amounts shall be held by
the Agent in a cash collateral account and applied (A) first, to reimburse the
Issuing Lender from time to time for any drawings under such Letters of Credit
and (B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "FIFTH" and "SIXTH" above in the
manner provided in this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Bank shall maintain an account or accounts evidencing each Loan
made by such Bank to the Borrower and the Foreign Borrowers from time to time,
including the amounts of principal and interest payable and paid to such Bank
from time to time under this Credit Agreement. Each Bank will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section 11.3(c), and
a subaccount for each Bank, in which Register and subaccounts (taken together)
shall be recorded (i) the amount, type and Interest Period of each such Loan
hereunder, (ii) the amount of any principal or interest due and payable or to
become due and payable to each Bank hereunder from the Borrower and each Foreign
Borrower and (iii) the amount of any sum received by the Agent hereunder from or
for the account of any Credit Party and each Bank's share thereof. The Agent
will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to subsection (b) of this Section 3.16 (and, if consistent with the
entries of the Agent, subsection (a)) shall be prima facie evidence of the
existence and amounts of the obligations of the Credit Parties therein recorded;
provided, however, that the failure of any Bank or the Agent to maintain any
such account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Credit Parties to
repay the Credit Party obligations owing to such Bank.
3.17 Additional Foreign Borrowers.
(a) The Borrower may request designation of any of its Foreign
Subsidiaries (an "Applicant Borrower") as a Foreign Borrower hereunder by
delivery of such a request to the Agent together with an executed copy of a
joinder agreement in form and content satisfactory to the Agent. Inclusion of
any such Foreign Subsidiary as a Foreign Borrower is subject to the prior
consent of the Required Banks in their reasonable discretion. The Agent will
promptly notify the Banks of any such request and provide an executed copy of
such Applicant Borrower's joinder agreement and the Borrower's request for
consent to such joinder. The joinder of each Applicant Borrower as a Foreign
Borrower will be subject to delivery of executed promissory notes, if any,
required in connection therewith, and supporting resolutions, articles of
incorporation, bylaws,
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incumbency certificates, opinions of counsel and such other items as the
Required Banks may reasonably request. Any such addition of a new Foreign
Borrower shall be effective ten Business Days after consent by the Required
Banks and receipt by the Agent of the items required by the Required Banks in
connection therewith. Such Applicant Borrower shall thereupon become a party
hereto and a Foreign Borrower hereunder.
(b) The Borrower may request that any of its Foreign Subsidiaries which is
a Foreign Borrower hereunder cease to be a Foreign Borrower by delivering to the
Agent (which shall promptly deliver copies thereof to each Bank) a written
notice to such effect. Such Foreign Subsidiary shall cease to be a Foreign
Borrower hereunder on the later to occur of (i) the date the Agent receives such
request and (ii) the date such Foreign Subsidiary has paid all of its Foreign
Currency Loans and all accrued and unpaid interest, fees and other obligations
hereunder or in connection herewith.
3.18 Several Liability of Foreign Borrowers.
The obligations of the Foreign Borrowers as borrowers hereunder are
several, and not joint, obligations. Each Foreign Borrower shall be liable only
with respect to Foreign Currency Loans which it has borrowed under the terms
hereof, together with all accrued interest, fees and other charges arising in
connection with such specific Foreign Currency Loans.
3.19 European Common Currency.
(a) If, as result of the implementation of the European economic and
monetary union ("EMU"), (i) any Available Foreign Currency ceases to be lawful
currency of the nation issuing the same and is replaced by a European common
currency (the "Euro") or (ii) any Available Foreign Currency and the Euro are at
the same time recognized by any governmental authority of the nation issuing
such Available Foreign Currency as lawful currency of such nation, then any
amount payable hereunder by the Borrower or any Foreign Borrower in such
Available Foreign Currency shall instead be payable in the Euro and the amount
so payable shall be determined by translating the amount so payable in such
other Available Foreign Currency to the Euro at the exchange rate recognized by
the European central bank (or such other governmental or regulatory authority
designated by the EMU for establishing such exchange rate) for the purpose of
implementing the EMU. Prior to the occurrence of the event or events described
in clause (i) or (ii) of the preceding sentence, each amount payable hereunder
in any Available Foreign Currency will, except as otherwise provided herein,
continue to be payable only in that Available Foreign Currency.
(b) The terms and provisions of this Agreement will be subject to such
reasonable changes of construction as determined by the Agent (acting reasonably
and in consultation with the Borrower and the Banks) to reflect such
implementation of the Euro and to put the Banks and the Borrower in the same
position, so far as possible, that they would have been if such implementation
had not occurred. Except as provided in the foregoing provisions of this
Section, no such implementation nor any economic consequences resulting
therefrom shall give rise to any right to terminate, contest, cancel, modify or
renegotiate the provisions of this Agreement.
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SECTION 4
GUARANTY OF FOREIGN BORROWER OBLIGATIONS
4.1 Guaranty.
The Borrower hereby guarantees to each Bank and the Agent as hereinafter
provided the prompt payment of each Foreign Currency Loan made to the Foreign
Borrowers (hereinafter, the "Foreign Borrower Obligations") in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise) strictly in accordance with the
terms hereof. The Borrower hereby further agrees that if any of the Foreign
Borrower Obligations are not paid in full when due (whether at stated maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Borrower will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Foreign Borrower Obligations, the
same will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
4.2 Obligations Unconditional.
The obligations of the Borrower under this Section are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents, or any other agreement or
instrument referred to therein, or any substitution, release, impairment or
exchange of any other guarantee of or security for any of the Foreign Borrower
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section that the obligations of the Borrower
hereunder shall be absolute and unconditional under any and all circumstances.
The Borrower agrees that it shall have no right of subrogation, indemnity,
reimbursement or contribution against any Foreign Borrower of the Foreign
Borrower Obligations for amounts paid under this Section until such time as the
Banks have been paid in full, all Commitments under this Credit Agreement have
been terminated and no Person or Governmental Authority shall have any right to
request any return or reimbursement of funds from the Banks in connection with
monies received under the Credit Documents. Without limiting the generality of
the foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of the Borrower hereunder which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice to the
Borrower, the time for any performance of or compliance with any of the
Foreign Borrower Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) the maturity of any of the Foreign Borrower Obligations shall
be accelerated, or any of the Foreign Borrower Obligations shall be
modified, supplemented or amended in any respect, or any right under any
of the Credit Documents or any other agreement or instrument referred to
therein shall be waived or any other guarantee of any
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of the Foreign Borrower Obligations or any security therefor shall be
released, impaired or exchanged in whole or in part or otherwise dealt
with; or
(iii) any of the Foreign Borrower Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of any
creditor of the Foreign Borrowers) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of the Foreign
Borrowers).
With respect to its obligations hereunder this Section, the Borrower hereby
expressly waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Agent or any Bank exhaust any
right, power or remedy or proceed against any Person under any of the Credit
Documents or any other agreement or instrument referred to therein, or against
any other Person under any other guarantee of, or security for, any of the
Foreign Borrower Obligations.
4.3 Reinstatement.
The obligations of the Borrower under this Section shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Foreign Borrower Obligations is rescinded or
must be otherwise restored by any holder of any of the Foreign Borrower
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Borrower agrees that it will indemnify the
Agent and each Bank on demand for all reasonable costs and expenses (including,
without limitation, fees and expenses of counsel) incurred by the Agent or such
Bank in connection with such rescission or restoration, including any such costs
and expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
4.4 Remedies.
The Borrower agrees that, to the fullest extent permitted by law, as
between the Borrower, on the one hand, and the Agent and the Banks, on the other
hand, the Foreign Borrower Obligations may be declared to be forthwith due and
payable for purposes of this Section notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Foreign
Borrower Obligations from becoming automatically due and payable) as against any
other Person and that, in the event of such declaration (or the Foreign Borrower
Obligations being deemed to have become automatically due and payable), the
Foreign Borrower Obligations (whether or not due and payable by any other
Person) shall forthwith become due and payable by the Borrower for purposes of
this Section.
4.5 Continuing Guarantee.
The guarantee in this Section is a continuing guarantee, and shall apply
to all Foreign Borrower Obligations whenever arising.
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SECTION 5
CONDITIONS
5.1 Closing Conditions.
The obligation of the Banks to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit hereunder, whichever shall occur first, shall be subject to satisfaction
of the following conditions (in form and substance acceptable to the Banks):
(a) Executed Credit Documents. Receipt by the Agent of duly executed
copies of: (i) this Credit Agreement, (ii) the Notes, (iii) the Collateral
Documents and (iv) all other Credit Documents, each in form and substance
acceptable to the Agent in its sole discretion.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or other charter documents of each Credit Party
certified to be true and complete as of a recent date by the
appropriate Governmental Authority of the state or other
jurisdiction of its incorporation and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as
of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by
a secretary or assistant secretary of such Credit Party to be true
and correct and in force and effect as of the Closing Date.
(iv) Good Standing. Copies of (A) certificates of good
standing, existence or its equivalent with respect to each Credit
Party certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be in
good standing could have a Material Adverse Effect and (B) to the
extent available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
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(c) Financial Statements. Receipt by the Agent and the Banks of (i)
the consolidated financial statements of the Borrower and its
Subsidiaries, including balance sheets and income and cash flow statements
for the fiscal quarter ended March 31, 1998, and (ii) such other
information relating to the Borrower and its Subsidiaries as the Agent may
reasonably require in connection with the structuring and syndication of
credit facilities of the type described herein.
(d) Opinions of Counsel. The Agent shall have received, in each case
dated as of the Closing Date:
(i) a legal opinion of Weil, Gotshal & Manges LLP, special
counsel for the Credit Parties, substantially in the form of
Schedule 5.1(d)(i);
(ii) a legal opinion of special local counsel for the Credit
Parties for each State in which any Mortgaged Properties are
located, substantially in the form of Schedule 5.1(d)(ii); and
(iii) a legal opinion of special foreign counsel for the
Foreign Borrowers satisfactory in form and content to the Agent.
(e) Personal Property Collateral. The Agent shall have received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Trustee's security
interest in the Collateral, copies of the financing statements on
file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Trustee's sole
discretion, to perfect the Trustee's security interest in the
Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Trustee in order to perfect the
Trustee's security interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock
pledged to the Trustee pursuant to the Pledge Agreements, together
with duly executed undated stock powers attached thereto (unless,
with respect to the pledged Capital Stock of any Foreign Subsidiary,
such stock powers are deemed unnecessary by the Trustee in its
reasonable discretion under the law of the jurisdiction of
incorporation of such Person);
(v) such patent/trademark/copyright filings as requested by
the Trustee in order to perfect the Trustee's security interest in
the Collateral;
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(vi) all instruments and chattel paper in the possession of
any of the Credit Parties, together with allonges or assignments as
may be necessary or appropriate to perfect the Trustee's security
interest in the Collateral;
(vii) duly executed consents as are necessary, in the
Trustee's sole discretion, to perfect the Trustee's security
interest in the Collateral; and
(viii) in the case of any personal property Collateral located
at a premises leased by a Credit Party, such estoppel letters,
consents and waivers from the landlords on such real property as may
be required by the Agent.
(f) Real Property Collateral. The Trustee shall have received, in
form and substance reasonably satisfactory to the Trustee:
(i) fully executed and notarized mortgages, deeds of trust or
deeds to secure debt, or, as applicable, modifications and
amendments of existing mortgages, deeds of trust or deeds to secure
debt (each, as the same may be amended, modified, restated or
supplemented from time to time, a "Mortgage Instrument" and
collectively the "Mortgage Instruments") encumbering the fee
interest and/or leasehold interest of any Credit Party in each real
property asset designated in Schedule 6.20(a) (each a "Mortgaged
Property" and collectively the "Mortgaged Properties");
(ii) ALTA mortgagee title insurance policies (or endorsements
and update of existing policies in favor of the Trustee) issued by
title companies applicable to the Trustee (the "Mortgage Policies"),
in amounts not less than the respective amounts designated in
Schedule 6.20(a) with respect to any particular Mortgaged Property,
assuring the Trustee that each of the Mortgage Instruments creates a
valid and enforceable first priority mortgage lien on the applicable
Mortgaged Property, free and clear of all defects and encumbrances
except Permitted Liens, which Mortgage Policies shall be in form and
substance reasonably satisfactory to the Trustee and shall provide
for affirmative insurance and such reinsurance as the Trustee may
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Trustee;
(g) Priority of Liens. The Trustee shall have received satisfactory
evidence that (i) the Trustee, on behalf of the Banks, holds a perfected,
first priority Lien on all Collateral and (ii) none of the Collateral is
subject to any other Liens other than Permitted Liens.
(h) Availability. After giving effect to the initial Loans made and
Letters of Credit outstanding hereunder on the Closing Date, there shall
be at least $100,000,000 of availability existing under the Revolving
Committed Amount.
(i) Evidence of Insurance. Receipt by the Trustee of copies of
insurance policies or certificates of insurance of the Consolidated
Parties evidencing liability and
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casualty insurance meeting the requirements set forth in the Credit
Documents, including, but not limited to, naming the Trustee as loss payee
on behalf of the Banks.
(j) Senior Debt. (i) The Borrower shall have entered into the Senior
Note Indentures, (ii) the Borrower shall have executed the Senior Notes,
(iii) the Agent shall have received a copy, certified by an officer of the
Borrower as true and complete, of the Senior Note Indentures as originally
executed and delivered, and no amendment or modification thereof shall
have been entered into on or prior to the Closing Date which shall not
have been approved by each of the Banks and (iv) the Borrower shall have
received Net Offering Proceeds from the sale of Senior Notes in an
aggregate principal amount of at least $950,000,000.
(k) Material Adverse Effect. No material adverse change shall have
occurred since December 31, 1997 in the condition (financial or
otherwise), business, operations, or assets of the Consolidated Parties
taken as a whole.
(l) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against a Consolidated Party
that could reasonably be expected to have a Material Adverse Effect.
(m) Other Indebtedness. Receipt by the Agent of evidence that upon
the issuance of the Senior Notes, the Consolidated Parties shall have no
Funded Indebtedness other than (i) the Indebtedness under the Credit
Documents, (ii) the Senior Note Indentures and the Senior Notes, and (iii)
Indebtedness permitted by Section 8.1 hereof.
(n) Change in Market. The absence, since the date of the commitment
letter executed by and between the Agent and the Borrower with respect to
the Loans, of any material disruption of, or a material adverse change in,
financial, banking or capital market conditions.
(o) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date stating that (A) each Credit Party is in
compliance with all existing financial obligations, (B) all governmental
and third party consents and approvals, if any, with respect to the Credit
Documents and the transactions contemplated thereby have been obtained,
(C) no action, suit, investigation or proceeding is pending or threatened
in any court or before any arbitrator or governmental instrumentality that
purports to affect any Credit Party or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect, (D) the
transactions contemplated by the Senior Note Indentures have been
consummated in accordance with the terms thereof and (E) immediately after
giving effect to this Credit Agreement, the other Credit Documents and all
the transactions contemplated therein to occur on such date, (1) each of
the Credit Parties is Solvent, (2) no Default or Event of Default exists,
(3) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (4)
the Credit Parties are in compliance with each of the financial covenants
set forth in Section 7.11.
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(p) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Banks and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee Letter.
(q) Other. Receipt by the Banks of such other documents,
instruments, agreements or information as reasonably requested by any
Bank, including, but not limited to, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Consolidated Parties.
5.2 Conditions to all Extensions of Credit.
The obligations of each Bank to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any Loan,
an appropriate Notice of Borrowing or Notice of Extension/Conversion, or
(ii) in the case of any Letter of Credit, the Issuing Lender shall have
received an appropriate request for issuance in accordance with the
provisions of Section 2.4(b);
(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly relate
to an earlier date);
(c) There shall not have been commenced against any Consolidated
Party an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) No development or event which has had or could have a Material
Adverse Effect shall have occurred since December 31, 1997; and
(f) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such Letter
of Credit, as the case may be, (i) the sum of the aggregate principal
amount of outstanding Revolving Loans plus the aggregate principal amount
of outstanding Competitive Loans plus the Dollar Amount of the aggregate
principal amount of Foreign Loans plus the aggregate principal amount of
Swingline Loans plus the Dollar Amount of LOC Obligations outstanding
shall not exceed
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the Revolving Committed Amount, and (ii) the Dollar Amount of LOC
Obligations shall not exceed the LOC Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.4(b) shall
constitute a representation and warranty by the Credit Parties of the
correctness of the matters specified in subsections (b), (c), (d), (e) and (f)
above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents to the Agent and each Bank that:
6.1 Financial Condition.
The audited consolidated balance sheet and income statement of the
Consolidated Parties for the fiscal year ended December 31, 1997 have heretofore
been furnished to the Banks. Such financial statements (including the notes
thereto) (i) have been audited by Ernst & Young LLP, (ii) have been prepared in
accordance with GAAP consistently (except for departures from GAAP described in
section 1.3 hereof), applied throughout the periods covered thereby and (iii)
present fairly (on the basis disclosed in the footnotes to such financial
statements) the consolidated financial condition, results of operations and cash
flows of the Consolidated Parties as of such date and for such period. During
the period from December 31, 1997 to and including the Closing Date, there has
been no sale, transfer or other disposition by any Consolidated Party of any
material part of the business or property of the Consolidated Parties, taken as
a whole, and no purchase or other acquisition by any of them of any business or
property (including any capital stock of any other person) material in relation
to the consolidated financial condition of the Consolidated Parties, taken as a
whole, in each case, which, is not reflected in the foregoing financial
statements or in the notes thereto and has not otherwise been disclosed in
writing to the Banks on or prior to the Closing Date.
6.2 No Material Change.
Since December 31, 1997, (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could reasonably
be expected to have a Material Adverse Effect and (b) except as otherwise
permitted under this Credit Agreement, no dividends or other distributions have
been declared, paid or made upon the Capital Stock in a Consolidated Party nor
has any of the Capital Stock in a Consolidated Party been redeemed, retired,
purchased or otherwise acquired for value.
6.3 Organization and Good Standing.
Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization, (b) has the corporate or other necessary power and authority,
and the legal right, to own and operate its property, to lease
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the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing could reasonably be expected to have a Material
Adverse Effect.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for (i) consents, authorizations, notices and
filings described in Schedule 6.4, all of which have been obtained or made or
have the status described in such Schedule 6.4 and (ii) filings to perfect the
Liens created by the Collateral Documents. This Credit Agreement has been, and
each other Credit Document to which any Credit Party is a party will be, duly
executed and delivered on behalf of the Credit Parties. This Credit Agreement
constitutes, and each other Credit Document to which any Credit Party is a party
when executed and delivered will constitute, a legal, valid and binding
obligation of such Credit Party enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by any Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any Requirement of
Law or any other law, regulation (including, without limitation, Regulation U or
Regulation X), order, writ, judgment, injunction, decree or permit applicable to
it, (c) violate, contravene or conflict with contractual provisions of, or cause
an event of default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, the violation of which could reasonably be expected to
have a Material Adverse Effect, or (d) result in or require the creation of any
Lien (other than those contemplated in or created in connection with the Credit
Documents) upon or with respect to its properties.
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6.6 No Default.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Banks.
6.7 Ownership.
Each Consolidated Party is the owner of, and has good and marketable title
to, all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.
6.8 Indebtedness.
Except as otherwise permitted under Section 8.1, the Consolidated Parties
have no Indebtedness.
6.9 Litigation.
Except as disclosed in Schedule 6.9, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party which
could reasonably be expected to have a Material Adverse Effect.
6.10 Tax Returns, Payments and Examinations.
Each Consolidated Party has filed or caused to be filed all federal tax
returns and all material state and local tax returns which are required to be
filed, and has paid all material taxes shown to be due and payable on said
returns or on any assessments made against it or any of its respective
properties and all material taxes, fees and other charges imposed on it or any
of its respective properties by any governmental authority (other than those the
amount or validity of which is contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of such Consolidated Party); and no tax Liens have been
filed and no claims are being asserted with respect to any such taxes, fees or
other charges (other than such Liens or claims, the amount or validity of which
is currently being contested in good faith by appropriate proceedings and with
respect to which reserves in accordance with GAAP have been provided). Except as
set forth on Schedule 6.10 hereto, the federal income tax returns of each
Consolidated Party have been examined by the Internal Revenue Service (or closed
by applicable statues) for all tax periods, and there are no other federal
income tax examinations in progress. All deficiencies which have been asserted
against any Consolidated Party as a result of such examinations have been fully
paid or finally settled or are being contested in good faith, and no issue has
been raised in any such examinations which, by application or similar
principles, reasonably can be expected to result in assertion of a deficiency
for any other year not so examined that has not been accrued on such
Consolidated Party's audited financial statements for its most recently ended
fiscal year that would be required to be so accrued in accordance with GAAP. The
Borrower has no knowledge of any material federal income tax liability for any
Consolidated Party with respect to open taxable years in
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excess of amounts accrued on its consolidated financial statements for its most
recently ended fiscal year that would be required to be so accrued in accordance
with GAAP, nor does the Borrower anticipate any further material tax liability
with respect to such open taxable years taken as a whole in excess of such
accrued amounts.
6.11 Compliance with Law.
Each Consolidated Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not reasonably be expected to have a Material
Adverse Effect. No Requirement of Law could reasonably be expected to cause a
Material Adverse Effect.
6.12 ERISA.
Except as disclosed and described in Schedule 6.12 attached hereto:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, has occurred with respect to any Plan; (iii) each Plan
has been maintained, operated, and funded in material compliance with its own
terms and in material compliance with the provisions of ERISA, the Code, and any
other applicable federal or state laws; and (iv) no lien in favor of the PBGC or
a Plan has arisen or is reasonably likely to arise on account of any Plan.
(b) The accumulated benefit obligation (within the meaning of Financing
Accounting Standards Board Statement 87 ("FASB87") under each Single Employer
Plan utilizing the actuarial and other assumptions employed in calculating the
FASB87 disclosure in the Borrower's most recent annual financial statement did
not exceed the fair market value of the assets of such Plan as of the date of
such financial statement.
(c) Neither any Consolidated Party nor any ERISA Affiliate has incurred,
or, to the best knowledge of the Credit Parties, could be reasonably expected to
incur, any withdrawal liability under ERISA to any Multiemployer Plan or
Multiple Employer Plan. Neither any Consolidated Party nor any ERISA Affiliate
would become subject to any withdrawal liability under ERISA if any Consolidated
Party or any ERISA Affiliate were to withdraw completely from all Multiemployer
Plans and Multiple Employer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made. Neither
any Consolidated Party nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or
has been terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best knowledge of the Credit Parties, reasonably
expected to be in reorganization, insolvent, or terminated.
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(d) No prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or breach of fiduciary responsibility has occurred
with respect to a Plan which has subjected any Consolidated Party or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA
or Section 4975 of the Code, or under any agreement or other instrument pursuant
to which any Consolidated Party or any ERISA Affiliate has agreed or is required
to indemnify any Person against any such liability.
(e) Other than as reflected fairly in the Borrower's most recent
consolidated annual financial statements, neither any Consolidated Party nor any
ERISA Affiliates has any material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the Financial
Accounting Standards Board Statement 106. Each Plan which is a welfare plan (as
defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section
4980B of the Code apply has been administered in compliance in all material
respects of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor the
consummation of the financing transactions contemplated thereunder will involve
any transaction which is subject to the prohibitions of Sections 404, 406 or 407
of ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Code. The representation by the Credit Parties in the preceding
sentence is made in reliance upon and subject to the accuracy of the Banks'
representation in Section 11.16 with respect to their source of funds and is
subject, in the event that the source of the funds used by the Banks in
connection with this transaction is an insurance company's general asset
account, to the application of Prohibited Transaction Class Exemption 95-60, 60
Fed. Reg. 35,925 (1995), compliance with the regulations issued under Section
401(c)(1)(A) of ERISA, or the issuance of any other prohibited transaction
exemption or similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA of a "plan" within the meaning of
Section 4975(e)(1) of the Code.
6.13 Subsidiaries.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
jurisdiction of incorporation, the number of shares of each class of Capital
Stock outstanding, the number and percentage of outstanding shares of each class
owned (directly or indirectly) by such Consolidated Party; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and all other similar rights with respect thereto. The outstanding
Capital Stock of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Consolidated Party, directly or
indirectly, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in Schedule 6.13, no Consolidated Party has outstanding any securities
convertible into or exchangeable for its Capital Stock nor does any such Person
have outstanding any rights to subscribe for or to purchase or any options for
the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its Capital Stock.
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6.14 Governmental Regulations, Etc.
(a) No part of the Letters of Credit or proceeds of the Loans will
be used, directly or indirectly, for the purpose of purchasing or carrying
any "margin stock" within the meaning of Regulation U, or for the purpose
of purchasing or carrying or trading in any securities. If requested by
any Bank or the Agent, the Borrower will furnish to the Agent and each
Bank a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in Regulation U. No indebtedness
being reduced or retired out of the proceeds of the Loans was or will be
incurred for the purpose of purchasing or carrying any margin stock within
the meaning of Regulation U or any "margin security" within the meaning of
Regulation T. "Margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the
Consolidated Parties. None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use of
the proceeds of the Loans) will violate or result in a violation of the
Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or regulations issued pursuant thereto, or Regulation T,
U or X.
(b) No Consolidated Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, no
Consolidated Party is (i) an "investment company" registered or required
to be registered under the Investment Company Act of 1940, as amended, and
is not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any
Consolidated Party is a director, executive officer or principal
shareholder of any Bank. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference
to any Bank) have the respective meanings assigned thereto in Regulation O
issued by the Board of Governors of the Federal Reserve System.
(d) Each Consolidated Party has obtained and holds in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals which are necessary for the ownership of its
respective Property and to the conduct of its respective businesses as
presently conducted.
(e) No Consolidated Party is in violation of any applicable statute,
regulation or ordinance of the United States of America, or of any state,
city, town, municipality, county or any other jurisdiction, or of any
agency thereof (including without limitation, environmental laws and
regulations), which violation could reasonably be expected to have a
Material Adverse Effect.
(f) Each Consolidated Party is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency
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and is in full compliance in all material respects with all applicable
rules and regulations of such commissions.
6.15 Purpose of Loans.
The proceeds of the Loans and the Letters of Credit shall be used solely
by the Borrower (and as applicable each Foreign Borrower) for general corporate
purposes.
6.16 Environmental Matters.
Except as disclosed and described in Schedule 6.16 attached hereto and
except as to matters which do not and could not reasonably be expected to have a
Material Adverse Effect:
(a) Each of the facilities and properties owned, leased or operated by the
Consolidated Parties (the "Properties") and all operations at the Properties are
in compliance with all applicable Environmental Laws, and there is no violation
of any Environmental Law with respect to the Properties or the businesses
operated by the Consolidated Parties (the "Businesses"), and there are no
conditions relating to the Businesses or Properties that could give rise to
liability under any applicable Environmental Laws.
(b) None of the Properties contains, or has previously contained, any
Materials of Environmental Concern at, on or under the Properties in amounts or
concentrations that constitute or constituted a violation of, or could give rise
to liability under, Environmental Laws.
(c) No Consolidated Party has received any written or verbal notice of, or
inquiry from any Governmental Authority regarding, any violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the Businesses, nor does any Consolidated Party have
knowledge or reason to believe that any such notice will be received or is being
threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, or generated, treated, stored or disposed of
at, on or under any of the Properties or any other location, in each case by or
on behalf of any Consolidated Party in violation of, or in a manner that could
give rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of the Borrower, threatened, under any
Environmental Law to which any Consolidated Party is or will be named as a
party, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Consolidated Parties, the Properties or the Businesses.
(f) There has been no release, or threat of release, of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations (including, without limitation, disposal) of any Consolidated
Party in connection with the Properties or otherwise in connection with the
Businesses, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
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6.17 Intellectual Property.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not reasonably be expected to have a Material Adverse Effect. Set
forth on Schedule 6.17 is a list of all Intellectual Property owned by each
Consolidated Party or that any Consolidated Party has the right to use,
excluding only (i) such Intellectual Property owned by any Consolidated Party
that has been abandoned by such Consolidated Party and is no longer used or
valuable to such Consolidated Party's current business operations, and (ii) any
foreign patents, trademarks or related Intellectual Property. Except as provided
on Schedule 6.17, no claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does any Credit
Party know of any such claim, and to the Credit Parties' knowledge the use of
such Intellectual Property by any Consolidated Party does not infringe on the
rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.18 Solvency.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement and the Senior Note Indentures, will be
Solvent.
6.19 Investments.
All Investments of each Consolidated Party are Permitted Investments.
6.20 Location of Collateral.
Set forth on Schedule 6.20(a) is a list of all Mortgaged Properties with
street address, county and state where located. Set forth on Schedule 6.20(b) is
a list of all locations where any tangible personal property of a Consolidated
Party is located, including county and state where located. Set forth on
Schedule 6.20(c) is the chief executive office and principal place of business
of each Consolidated Party.
6.21 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to
the Banks nor any other document, certificate or statement furnished to the
Banks by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains on the date of delivery thereof any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein or herein not misleading.
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6.22 No Burdensome Restrictions.
No Consolidated Party is a party to any agreement or instrument or subject
to any other obligation or any charter or corporate restriction or any provision
of any applicable law, rule or regulation which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
6.23 Brokers' Fees.
No Consolidated Party has any obligation to any Person in respect of any
finder's, broker's, investment banking or other similar fee in connection with
any of the transactions contemplated under the Credit Documents.
6.24 Labor Matters.
Except as disclosed on Schedule 6.24, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of a Consolidated Party
as of the Closing Date. There are no strikes, work stoppages or controversies
pending between any Credit Party and any of its employees, other than employee
grievances arising in the ordinary course of business, which in the aggregate do
not and are not reasonably expected to have a Material Adverse Effect.
6.25 Year 2000 Compliance.
The Borrower has conducted a review and assessment of its and the
Subsidiaries computer applications and made inquiry of its key suppliers,
vendors and customers with respect to the "year 2000 problem" (that is, the risk
that computer applications may not be able to properly perform date-sensitive
functions after December 31, 1999) and, based on that review and inquiry, the
Borrower believes that the year 2000 problem will not result in a Material
Adverse Effect.
SECTION 7
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 Information Covenants.
The Borrower will furnish, or cause to be furnished, to the Agent and each
of the Banks:
(a) Annual Financial Statements. As soon as available, and in any
event within 95 days after the close of each fiscal year of the
Consolidated Parties, a consolidated balance sheet and income statement of
the Consolidated Parties, as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings and
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of cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited by independent certified public accountants of recognized national
standing reasonably acceptable to the Agent and whose opinion shall be to
the effect that such financial statements have been prepared in accordance
with GAAP (except for changes with which such accountants concur or are
otherwise permitted by Section 1.3) and shall not be limited as to the
scope of the audit or qualified as to the status of the Consolidated
Parties as a going concern.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 50 days after the close of each of the first three fiscal
quarters of each fiscal year of the Consolidated Parties a consolidated
balance sheet and income statement of the Consolidated Parties, as of the
end of such fiscal quarter, together with related consolidated statements
of operations and retained earnings and of cash flows for such fiscal
quarter, in each case setting forth in comparative form consolidated
figures for the corresponding period of the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and reasonably acceptable to the Agent, and accompanied by a
certificate of an Executive Officer of the Borrower to the effect that
such quarterly financial statements fairly present in all material
respects the financial condition of the Consolidated Parties and have been
prepared in accordance with GAAP, subject to changes resulting from audit
and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of an Executive Officer of the Borrower substantially in the form of
Exhibit 7.1(c), (i) demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end of each
such fiscal period and (ii) stating that no Default or Event of Default
exists, or if any Default or Event of Default does exist, specifying the
nature and extent thereof and what action the Credit Parties propose to
take with respect thereto.
(d) Annual Business Plan and Budgets. At least 60 days after the end
of each fiscal year of the Borrower, beginning with the fiscal year ending
closest to December 31, 1998, an annual business forecast of the
Consolidated Parties containing, among other things, financial statements
for the next fiscal year and such other financial information reasonably
satisfactory to the Agent; together with appropriate supporting details as
requested by any Bank; and as soon as possible, but in no event later than
fifty (50) days after the close of each of the first three fiscal quarters
and ninety-five (95) days after the close of each fiscal year, a statement
in which the actual results of such fiscal quarter are compared with the
most recent forecasts for such fiscal quarter.
(e) Compliance With Certain Provisions of the Credit Agreement.
Within 95 days after the end of each fiscal year of the Credit Parties, or
more frequently if requested by the Agent, a certificate containing
information regarding (i) the amount of all Asset Dispositions, and (ii)
other matters reasonably requested by the Required Banks.
(f) Accountant's Certificate. As soon as available, but in any event
within 105 days after the close of each fiscal year of the Consolidated
Parties, a certificate of the
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accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default and, if
any such Default or Event of Default exists, specifying the nature and
extent thereof.
(g) Auditor's Reports. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants
to any Consolidated Party in connection with any annual, interim or
special audit of the books of such Person.
(h) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to its shareholders or to a holder of any
Indebtedness owed by any Consolidated Party in its capacity as such a
holder and (ii) upon the reasonable request of the Agent, all reports and
written information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety Administration,
or any state or local agency responsible for health and safety matters, or
any successor agencies or authorities concerning environmental, health or
safety matters.
(i) Notices. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Agent immediately of (i) the occurrence of an
event or condition consisting of a Default or Event of Default, specifying
the nature and existence thereof and what action the Credit Parties
propose to take with respect thereto, and (ii) the occurrence of any of
the following with respect to any Consolidated Party (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding
against such Person which if adversely determined is reasonably expected
to have a Material Adverse Effect, (B) the institution of any proceedings
against such Person with respect to, or the receipt of notice by such
Person of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, which if adversely
determined could reasonably be expected to have a Material Adverse Effect,
or (C) any notice or determination concerning the imposition of any
withdrawal liability by a Multiemployer Plan against such Person or any
ERISA Affiliate, the determination that a Multiemployer Plan is, or is
expected to be, in reorganization within the meaning of Title IV of ERISA
or the termination of any Plan.
(j) ERISA. Upon obtaining knowledge thereof, the Borrower will give
written notice to the Agent promptly (and in any event within five
Business Days) of: (i) of any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the
receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Credit Parties or any ERISA Affiliates, or
of a determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which any Consolidated Party or any
ERISA Affiliate is required to contribute to each Plan pursuant to its
terms and as required to meet the
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minimum funding standard set forth in ERISA and the Code with respect
thereto; or (iv) any change in the funding status of any Plan that could
reasonably be expected to have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice
and a statement by the chief financial officer of the Borrower briefly
setting forth the details regarding such event, condition, or notice, and
the action, if any, which has been or is being taken or is proposed to be
taken by the Credit Parties with respect thereto. Promptly upon request,
the Credit Parties shall furnish the Agent and the Banks with such
additional information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return (Form
5500 series), as well as all schedules and attachments thereto required to
be filed with the Department of Labor and/or the Internal Revenue Service
pursuant to ERISA and the Code, respectively, for each "plan year" (within
the meaning of Section 3(39) of ERISA).
(k) Notice of Environmental Claims. Except as previously disclosed
to the Agent, notify the Agent in writing, promptly, and in any event
within twenty (20) days after learning thereof, of any: (A) notice or
claim to the effect that it or any of its Subsidiaries is or may be liable
to any Person as a result of the Release or threatened Release of any
Material of Environmental Concern into the environment; (B) notice that it
or any of its Subsidiaries is subject to investigation by any governmental
authority evaluating whether any action is needed to respond to the
Release or threatened Release of any Material of Environmental Concern
into the environment; (C) notice that any property of it or its
Subsidiaries is subject to a Lien imposed under the Environmental Laws;
(D) notice of violation to it or any of its Subsidiaries or awareness by
it or any of its Subsidiaries of a condition which might reasonably result
in a notice of violation of any environmental, health or safety
requirement under federal, state or local laws, which could reasonably be
expected to have a Material Adverse Effect; (E) commencement or threat of
any judicial or administrative proceeding alleging a violation of any
environmental, health or safety requirement under federal, state or local
laws which could reasonably be expected to have a Material Adverse Effect;
or (F) new or proposed changes to any existing environmental, health or
safety requirement under federal, state or local laws that could
reasonably be expected to have a Material Adverse Effect on the condition
(financial or otherwise) properties, business or results of operations of
the Borrower and its Subsidiaries. With respect to clauses (A) through (F)
above, such notice shall be required only if the liability or potential
liability which is the subject matter of the notice is reasonably likely
to exceed $1,000,000, or if such liability or potential liability when
added to other liabilities of the Borrower and its Subsidiaries of the
kind referred to in any of such clauses (A) through (F) above is
reasonably likely to exceed $5,000,000.
(l) Additional Patents and Trademarks. At the time of delivery of
the financial statements and reports provided for in Section 7.1(a), a
report signed by an Executive Officer of the Borrower setting forth (i) a
list of registration numbers for all patents, trademarks, service marks,
tradenames and copyrights awarded to any Consolidated Party since the last
day of the immediately preceding fiscal year and (ii) a list of all patent
applications, trademark applications, service mark applications, trade
name applications and copyright applications submitted by any Consolidated
Party since the last day of the
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immediately preceding fiscal year and the status of each such application,
all in such form as shall be reasonably satisfactory to the Agent.
(m) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Consolidated Party as the Agent or the Required
Banks may reasonably request.
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, the
Borrower will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.
7.3 Books and Records.
The Borrower will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP, except for departures from GAAP
(i) which are not material, (y) which will not cause the financial statements to
fail to meet the requirements of the Securities and Exchange Commission for
financial information to be contained or incorporated by reference in
registration statements, and (iii) which do not cause the financial statements
to fail to reflect accurately in all respects the financial condition of the
Borrower.
7.4 Compliance with Law.
The Borrower will, and will cause each of its Subsidiaries to, comply with
all laws, rules, regulations and orders, and all applicable restrictions imposed
by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.
7.5 Payment of Taxes and Other Indebtedness.
The Borrower will, and will cause each of its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, and (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties; provided, however, that no Consolidated Party shall be
required to pay any such tax, assessment, charge, levy, or claim which is being
contested in good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with GAAP, unless the
failure to make any such payment (i) could give rise to an immediate right to
foreclose on a Lien securing such amounts or (ii) could reasonably be expected
to have a Material Adverse Effect.
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7.6 Insurance.
(a) The Borrower will, and will cause each of its Subsidiaries to, at all
times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, property insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
reasonable business practices. The Trustee shall be named as loss payee or
mortgagee, as its interest may appear, with respect to any such insurance
providing coverage in respect of any Collateral, and each provider of any such
insurance shall agree, by endorsement upon the policy or policies issued by it
or by independent instruments furnished to the Trustee, that it will give the
Trustee thirty (30) days prior written notice before the coverage of any such
policy or policies shall be materially altered or canceled, and that no act or
default of any Consolidated Party or any other Person shall affect the rights of
the Trustee or the Banks under such policy or policies. Such policies may
provide that, prior to written notification from the Agent of the incurrence of
an Event of Default, the insurer may make settlement payments in respect of such
policies directly to the Borrower notwithstanding the Trustee's status as a loss
payee, for payments aggregating less than $5 million for any single casualty,
loss or damage incurred by any of the Credit Parties and not exceeding an
aggregate of $10 million for all such payments made during any twelve month
period by such insurer or its Affiliates. The present insurance coverage of the
Consolidated Parties is outlined as to carrier, policy number, expiration date,
type and amount on Schedule 7.6.
(b) In case of any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to the Agent generally describing the
nature and extent of such damage or destruction. In case of any loss, damage to
or destruction of the Collateral of any Credit Party or any part thereof, such
Credit Party, whether or not the insurance proceeds, if any, received on account
of such damage or destruction shall be sufficient for that purpose, at such
Credit Party's cost and expense, will promptly repair or replace the Collateral
of such Credit Party so lost, damaged or destroyed; provided, however, that such
Credit Party need not repair or replace the Collateral of such Credit Party so
lost, damaged or destroyed to the extent the failure to make such repair or
replacement (i) is desirable to the proper conduct of the business of such
Credit Party in the ordinary course and otherwise in the best interest of such
Credit Party; and (ii) would not materially impair the rights and benefits of
the Agent or the Banks under the Collateral Documents, any other Credit Document
or any Hedging Agreement. Notwithstanding any provision to the contrary
contained in this Credit Agreement, none of the Credit Parties shall undertake
replacement or restoration of any lost, damaged or destroyed Collateral of such
Credit Party with insurance proceeds in respect thereof unless the Agent has
received evidence reasonably satisfactory to it that the Collateral lost,
damaged or destroyed has been or will be replaced or restored to its condition
immediately prior to the loss, destruction or other event giving rise to the
payment of such insurance proceeds.
7.7 Maintenance of Property.
The Borrower will, and will cause each of its Subsidiaries to, maintain
and preserve its properties and equipment material to the conduct of its
business in good repair, working order and condition, normal wear and tear and
casualty and condemnation excepted, and will make, or cause to be made, in such
properties and equipment from time to time all repairs, renewals, replacements,
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extensions, additions, betterments and improvements thereto as may be needed or
proper, to the extent and in the manner customary for companies in similar
businesses.
7.8 Performance of Obligations.
The Borrower will, and will cause each of its Subsidiaries to, perform in
all respects all of its obligations under the terms of all agreements,
indentures, mortgages, security agreements or other debt instruments to which it
is a party or by which it is bound, except in any instance where the failure to
perform such obligations does not have and could not reasonably be expected to
have a Material Adverse Effect.
7.9 Use of Proceeds.
The Borrower will use the proceeds of the Loans solely for the purposes
set forth in Section 6.15.
7.10 Audits/Inspections.
Upon reasonable notice and during normal business hours, the Borrower
will, and will cause each of its Subsidiaries to, permit each Bank and
representatives appointed by the Agent, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit each Bank and the Agent or its
representatives to investigate and verify the accuracy of information provided
to the Banks and to discuss all such matters with the officers, employees and
representatives of such Person. The Borrower agrees that the Agent, and its
representatives, may conduct an annual audit of the Collateral, at the expense
of the Credit Parties.
7.11 Financial Covenants. The Borrower shall:
(a) Minimum Consolidated Net Worth. Have a Consolidated Net Worth as of
the last day of each fiscal quarter of not less than $255,000,000, increased on
a cumulative basis as of the end of each fiscal quarter of the Consolidated
Parties, commencing with the fiscal quarter ending June 30, 1998, by an amount
equal to forty percent (40%) of Consolidated Net Income (to the extent positive)
for the fiscal quarter then ended.
(b) Minimum Current Ratio. Have at all times a Current Ratio of not less
than 1.4 to 1.
(c) Interest Coverage Ratio. Have at the end of each fiscal quarter an
Interest Coverage Ratio which is not less than 1.75 to 1.0.
7.12 Additional Credit Parties.
As soon as practicable and in any event within 30 days after any Person
becomes a Subsidiary of any Credit Party, the Borrower shall provide the Trustee
with written notice thereof
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setting forth information in reasonable detail describing all of the assets of
such Person and shall (a) if such Person is a Domestic Subsidiary of a Credit
Party, cause such Person to execute a Joinder Agreement in substantially the
same form as Exhibit 7.12 and a guaranty agreement substantially in the form of
Exhibit A to the Collateral Trust Agreement, (b) cause 100% (if such Person is a
Domestic Subsidiary of a Credit Party) or 65% (if such Person is a direct
Foreign Subsidiary of a Credit Party) of the Capital Stock of such Person to be
delivered to the Trustee together with undated stock powers signed in blank
(unless, with respect to a Foreign Subsidiary, such stock powers are deemed
unnecessary by the Trustee in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person) and pledged to the Trustee
pursuant to an appropriate pledge agreement(s) in substantially the form of the
Pledge Agreement and otherwise in form acceptable to the Trustee and (c) cause
such Person to (i) if such Person owns or leases any real property located in
the United States of America, deliver to the Trustee with respect to such real
property documents, instruments and other items of the types required to be
delivered pursuant to Section 5.1(f) all in form, content and scope reasonably
satisfactory to the Trustee and (ii) deliver such other documentation as the
Trustee may reasonably request in connection with the foregoing, including,
without limitation, appropriate UCC-1 financing statements, real estate title
insurance policies, environmental reports, landlord's waivers, certified
resolutions and other organizational and authorizing documents of such Person,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of the Trustee's liens
thereunder) and other items of the types required to be delivered pursuant to
Section 5.1(b), (d), (e), (f) and (g), all in form, content and scope reasonably
satisfactory to the Trustee.
7.13 Real Estate Appraisals.
To the extent required by law (including pursuant to regulations
promulgated under the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended), and at the written request of the Agent, the Borrower
will obtain appraisals of the Mortgaged Properties, at the Borrower's own
expense from reputable appraisers acceptable to the Agent, and provide copies of
such appraisals to the Banks.
7.14 Environmental Assessments.
To the extent required by law or upon the reasonable written request by
the Agent or the Trustee, the Borrower will, and cause each of its Subsidiaries
to, furnish or cause to be furnished to the Agent, at the Borrower's expense, a
report of an environmental assessment of reasonable scope, form and depth,
(including, where appropriate, invasive soil or groundwater sampling) by a
consultant reasonably acceptable to the Agent as to the nature and extent of the
presence of any Materials of Environmental Concern on any Mortgaged Properties
and as to the compliance by any Consolidated Party with Environmental Laws at
such Properties. If the Credit Parties fail to deliver such an environmental
report within seventy-five (75) days after receipt of such written request then
the Agent may arrange for same, and the Consolidated Parties hereby grant to the
Agent and their representatives access to the Mortgaged Properties to reasonably
undertake such an assessment (including, where appropriate, invasive soil or
groundwater sampling). The reasonable cost of any assessment arranged for by the
Agent pursuant to this provision will be payable by the Credit Parties on demand
and added to the obligations secured by the Collateral Documents.
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7.15 Repayment of Stevens Indenture Obligations.
The Borrower will cause all of the Stevens Indenture Obligations (as
defined in the Collateral Trust Agreement) to be fully paid and satisfied, and
the Stevens Debentures (as defined in the Collateral Trust Agreement) to be
redeemed in their entirety on or before the sixtieth (60th) day after the
Closing Date.
SECTION 8
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 Indebtedness.
The Borrower will not, and will not permit any Consolidated Party to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set forth in
Schedule 8.1 (and renewals, refinancings and extensions thereof on terms
and conditions no less favorable to such Person than such existing
Indebtedness and no such Indebtedness shall be refinanced for a principal
amount in excess of the principal balance outstanding thereon at the time
of such refinancing);
(c) purchase money Indebtedness (including obligations in respect of
Capital Leases or Synthetic Leases) hereafter incurred by the Borrower or
any of its Subsidiaries to finance the purchase of fixed assets provided
that (i) the total of all such Indebtedness for all such Persons taken
together (including any such Indebtedness referred to in subsection (b)
above) shall not exceed an aggregate principal amount of $20,000,000 at
any one time outstanding; (ii) such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(d) obligations of the Borrower or any of its Subsidiaries in
respect of Hedging Agreements entered into in order to manage existing or
anticipated interest rate or exchange rate risks and not for speculative
purposes; provided that the total of such Indebtedness for all such
Persons taken together shall not exceed $10,000,000 at any time calculated
on a marked-to-market basis;
(e) intercompany Indebtedness arising out of loans and advances
permitted under Section 8.6;
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(f) obligations of the Borrower or any of its Subsidiaries in
connection with any Permitted Receivables Financing, to the extent such
obligations constitute Indebtedness;
(g) Indebtedness arising under the Senior Note Indentures and the
Senior Notes;
(h) in addition to the Indebtedness otherwise permitted by this
Section 8.1, other unsecured Indebtedness hereafter incurred by the
Borrower or any of its Subsidiaries provided that the aggregate principal
amount of such Indebtedness plus the aggregate outstanding principal
amount of Indebtedness permitted pursuant to clauses (b) and (c) above
shall not exceed $100,000,000 at any time;
(i) other unsecured Indebtedness of the Borrower or its
Subsidiaries, if at the time of and after giving pro forma effect to the
incurrence of such Indebtedness (including the application of the proceeds
thereof) and any Acquisitions and any Asset Dispositions that occurred
during the period beginning four full fiscal quarters immediately prior to
such incurrence as though such events occurred on the first day of such
period, the Interest Coverage Ratio for such four fiscal quarter period of
the Borrower is equal to or greater than 1.75 to 1.0; and
(j) Guaranty Obligations of any Credit Party with respect to any
Indebtedness of another Credit Party permitted under this Section 8.1.
8.2 Liens.
The Borrower will not, and will not permit any Consolidated Party to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property, whether now owned or after acquired, except for Permitted
Liens.
8.3 Nature of Business.
The Borrower will not, and will not permit any Consolidated Party to,
substantially alter the character or conduct of the business conducted by such
Person as of the Closing Date.
8.4 Consolidation, Merger, Dissolution, etc.
The Borrower will not, and will not permit any Consolidated Party to,
enter into any transaction of merger or consolidation or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); provided that,
notwithstanding the foregoing provisions of this Section 8.4:
(a) the Borrower may merge or consolidate with any of its
Subsidiaries provided that (i) the Borrower shall be the continuing or
surviving corporation, and (ii) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as the
Trustee may request so as to cause the Credit Parties to be in compliance
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with the terms of Sections 2.2 and 2.3 of the Collateral Trust Agreement
after giving effect to such transaction;
(b) any Credit Party other than the Borrower may merge or
consolidate with any other Credit Party other than the Borrower provided
that the Credit Parties shall cause to be executed and delivered such
documents, instruments and certificates as the Trustee may request so as
to cause the Credit Parties to be in compliance with the terms of Sections
2.2 and 2.3 of the Collateral Trust Agreement after giving effect to such
transaction;
(c) any Consolidated Party which is not a Credit Party may be merged
or consolidated with or into any Credit Party provided that (i) such
Credit Party shall be the continuing or surviving corporation and (ii) the
Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may request so as to cause the
Credit Parties to be in compliance with the terms of Sections 2.2 and 2.3
of the Collateral Trust Agreement after giving effect to such transaction;
(d) any Consolidated Party which is not a Credit Party may be merged
or consolidated with or into any other Consolidated Party which is not a
Credit Party;
(e) the Borrower or any Subsidiary of the Borrower may merge with
any Person other than a Consolidated Party in connection with an
Acquisition permitted by Section 8.6(b) if (i) the Borrower or such
Subsidiary shall be the continuing or surviving corporation, (ii) the
Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Trustee may request so as to cause the
Credit Parties to be in compliance with the terms of Sections 2.2 and 2.3
of the Collateral Trust Agreement after giving effect to such transaction
and (iii) the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect on a pro
forma basis to such transaction, no Default or Event of Default would
exist; and
(f) any Wholly-Owned Subsidiary of the Borrower may dissolve,
liquidate or wind up its affairs at any time.
8.5 Asset Dispositions.
The Borrower will not, and will not permit any Consolidated Party to, make
any Asset Disposition (including, without limitation, any Sale and Leaseback
Transaction) other than Excluded Asset Dispositions unless (a) if such
transaction is a Sale and Leaseback Transaction, such transaction is permitted
by the terms of Section 8.12, (b) such transaction does not involve the sale or
other disposition of a minority equity interest in any Consolidated Party, (c)
the Borrower shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect on a pro forma basis to such
transaction, no Default or Event of Default would exist hereunder, and (d) no
later than 10 Business Days prior to such Asset Disposition, the Agent and the
Banks shall have received a certificate of an officer of the Borrower specifying
the anticipated or actual date of such Asset Disposition, briefly describing the
assets to be sold or otherwise disposed of and setting forth the net book value
of such assets, the aggregate consideration and the Net Cash Proceeds to be
received for such assets in connection with such Asset Disposition, and
thereafter the Borrower shall (or cause its Subsidiaries to), within the period
of 10 Business Days
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following the consummation of such Asset Disposition, apply (or cause to be
applied) an amount equal to the Net Cash Proceeds of such Asset Disposition to
prepay the Loans (or cash collateralize outstanding LOC Obligations) in
accordance with the terms of Section 3.3(b)(ii).
8.6 Investments and Acquisitions.
(a) Investments and Loans. The Borrower will not, and will not permit any
Consolidated Party to, have or make any loan or advance to or investment in any
Subsidiary or other Affiliate or any other Persons except (i) Subsidiaries of
the Borrower may make any loans and/or advances to the Borrower, (ii) for
Permitted Investments, (iii) for investments that are Capital Expenditures;
provided however, that neither the Borrower nor any of its Subsidiaries shall
make such an investment in a Subsidiary other than a Credit Party except as
permitted by Section 8.6 (a)(viii) hereof, (iv) the Borrower may maintain its
Investments in, and have loans and/or advances to, its Subsidiaries existing on
the date hereof and thereafter may make loans and/or advances to the other
Credit Parties in the ordinary course of business consistent with past
practices, (v) each Subsidiary of the Borrower may maintain its Investments in,
and have loans and/or advances to, its Subsidiaries existing on the date hereof
and thereafter may make loans and/or advances to such Subsidiaries that are
Credit Parties in the ordinary course of business consistent with past
practices, (vi) the Borrower may make loans and/or advances (A) to employees of
the Borrower and its Subsidiaries, provided such loans do not exceed $500,000 to
any one such employee and $1,500,000 in the aggregate and (B) to employees of
the Borrower and its Subsidiaries to cover reasonable travel expenses incurred
in the ordinary course of business within the scope of such employee's
employment, (vii) the Borrower and its Subsidiaries may make investments (x)
permitted by Section 8.6(b) and (y) in Finco as set forth in the Permitted
Receivables Financing; provided, that any such Investments in Finco to be made
in cash shall not exceed an aggregate outstanding amount of $10,000,000 at any
one time, and, without duplication, (viii) loans, advances and Investments to
and in Foreign Subsidiaries and joint ventures of the Borrower and its
Subsidiaries in the cumulative amount of $50,000,000 from and after the Closing
Date (in addition to the Borrower's Investments in WestPoint Stevens (Europe)
Limited and WestPoint Stevens (UK) Limited existing as of the Closing Date), and
(viii) advances and royalty payments to customers and licensors in the ordinary
course of business.
(b) Acquisitions. The Borrower will not permit any Consolidated Party to
acquire any assets of another Person (including Capital Stock), except (A) each
of the Borrower and its Subsidiaries may acquire (i) inventory and other assets
in the ordinary course of business and (ii) the assets or Capital Stock of its
Subsidiaries, and (B) the Borrower and its Subsidiaries may acquire other assets
(including Capital Stock of Persons that become Subsidiaries after the Closing
Date) provided that (i) the Acquisition Consideration paid therefor is not
greater than the fair market value of the Property or Capital Stock acquired,
(ii) the aggregate Acquisition Consideration for all such acquisitions from and
after the Closing Date does not exceed $100,000,000, (iii) the Agent shall have
received all items in respect of the Capital Stock or Property acquired in such
Acquisition required to be delivered by the terms of the Collateral Trust
Agreement, (iv) the Borrower shall have delivered to the Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to such
Acquisition on a pro forma basis, the Credit Parties shall be in compliance with
all of the covenants set forth in Section 7.11, (v) after giving effect to such
Acquisition, the Revolving Committed Amount shall exceed by at least the Minimum
Available
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Amount the sum of the aggregate principal amount of the Revolving Loans
outstanding plus the aggregate principal amount of the Competitive Loans
outstanding plus the Dollar Amount of the aggregate principal amount of Foreign
Currency Loans outstanding plus the aggregate principal amount of Swingline
Loans outstanding plus the Dollar Amount of LOC Obligations outstanding, (vi) if
any Indebtedness is to be assumed or incurred by any Consolidated Party in
connection with such Acquisition, such Indebtedness is permitted to be incurred
pursuant to Section 8.1 hereof, and (vii) such Acquisition is of a business
engaged in, or of assets used in, the same or a similar business to that
currently conducted by the Borrower and its Subsidiaries.
8.7 Restricted Payments.
The Borrower will not permit any Consolidated Party to make directly or
indirectly any Restricted Payment that would cause the aggregate of all
Restricted Payments made by the Borrower during the term of this Agreement to
exceed the Maximum Restricted Payment Amount. The permitted Restricted Payments
described in this Section 8.7 may be made by the Borrower or its Subsidiaries
only if (i) no Default or Event of Default shall have occurred and be continuing
at the date of the proposed Restricted Payment (or, in the case of a dividend,
the declaration thereof) and after giving effect to such Restricted Payment, and
(ii) at the time or, or after giving effect to, such Restricted Payment, the
Borrower has an Interest Coverage Ratio that is equal to or greater than 1.75 to
1.0.
8.8 Transactions with Affiliates.
The Borrower will not permit any Consolidated Party to enter into any
transaction or any agreement with an Affiliate, including, without limitation,
the purchase, sale or exchange of property or the rendering of any service to or
by an Affiliate; provided that for purposes of the foregoing restriction, the
Borrower and its Subsidiaries and Finco shall not be considered to be Affiliates
of each other, and except that the Borrower and its Subsidiaries may enter into
transactions with Affiliates in the ordinary course of business, provided that
the terms of such transactions are no less favorable to the Borrower or the
relevant Subsidiary than those which would have obtained in a comparable
transaction with an unaffiliated third party.
8.9 Fiscal Year; Organizational Documents.
The Borrower will not (a) permit any other Consolidated Party to change
its fiscal year or amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) in a manner which could have an adverse effect on the Banks as
lenders hereunder, and (b) change its fiscal year or amend modify or change its
articles of incorporation or corporate charter except (i) to provide
indemnification for officers and directors upon customary terms as permitted by
applicable law, and (ii) to make additional amendments to the charter and bylaws
of the Borrower which could not have an adverse effect on the Banks as lenders
hereunder and which do not (A) change the authorized Capital Stock of the
Borrower, except as described in Schedule 8.9, (B) change the name of the
Borrower, or (C) add provisions concerning matters not presently addressed in
such articles of incorporation or bylaws.
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8.10 Limitation on Restricted Actions.
The Borrower will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) the documents executed in
connection with any Permitted Receivables Financing (but only to the extent that
the related encumbrance or restriction pertains to the applicable Transferred
Assets actually sold, contributed, financed or otherwise conveyed or pledged
pursuant to such Permitted Receivables Financing), (iii) applicable law, (iv)
any document or instrument governing Indebtedness incurred pursuant to Section
8.1(c), provided that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith. The Borrower
will not enter into any amendment or modification of the Senior Notes or the
Senior Indentures which (i) changes the maturity date of such Senior Notes to
occur prior to the Maturity Date or (ii) makes any affirmative or negative
covenants in such Senior Indentures to be more restrictive on the Borrower than
comparable covenants in this Agreement.
8.11 Ownership of Subsidiaries.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Borrower will not permit any Consolidated Party to (i) permit any
Person (other than the Borrower or any Wholly-Owned Subsidiary of the Borrower)
to own any Capital Stock of any Domestic Subsidiary of the Borrower, (ii) permit
any Subsidiary of the Borrower to issue Capital Stock (except to the Borrower or
to a Wholly-Owned Subsidiary of the Borrower), (iii) permit, create, incur,
assume or suffer to exist any Lien thereon, in each case except (A) to qualify
directors where required by applicable law or to satisfy other requirements of
applicable law with respect to the ownership of Capital Stock of Foreign
Subsidiaries, (B) as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5 or (C)
for Permitted Liens and (iv) notwithstanding anything to the contrary contained
in clause (ii) above, permit any Subsidiary of the Borrower to issue any shares
of preferred Capital Stock.
8.12 Sale Leasebacks.
Except as permitted by Section 8.1(c) with regard to Synthetic Leases or
Capital Leases, the Borrower will not permit any Consolidated Party to, directly
or indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether a Synthetic Lease or a Capital Lease, of any
Property (whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which such Consolidated Party has sold or transferred or is to
sell or transfer to a Person which is not a Consolidated Party or (b) which such
Consolidated Party intends to use for substantially the same purpose as any
other Property which has been sold or is to be sold or
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transferred by such Consolidated Party to another Person which is not a
Consolidated Party in connection with such lease.
8.13 No Negative Pledges.
The Borrower will not permit any Consolidated Party to enter into, assume
or become subject to any agreement prohibiting or otherwise restricting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation, except (a) pursuant
to this Credit Agreement and the other Credit Documents, (b) pursuant to the
documents executed in connection with any Permitted Receivables Financing (but
only to the extent that the related prohibitions against other encumbrances
pertain to the applicable Transferred Assets actually sold, contributed,
financed or otherwise conveyed or pledged pursuant to such Permitted Receivables
Financing), (c) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 8.1(c), provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired in
connection therewith, and (d) pursuant to any document or instrument executed
only by one or more Foreign Subsidiaries of the Borrower in connection with
their obtaining financing in foreign jurisdictions in which they conduct
business (to the extent such financing is otherwise permitted by Section 8.1
hereof), provided that any such restriction relates only to the assets owned by
such Foreign Subsidiaries and does not restrict any pledge of Capital Stock by a
direct Foreign Subsidiary of any Credit Party in favor of the Trustee for the
benefit of the Banks.
8.14 Operating Lease Obligations.
The Borrower will not permit any Consolidated Party to enter into, assume
or permit to exist any Operating Leases, except that the Borrower and its
Subsidiaries may suffer to exist (and enter into renewals of) leases to which
any of them is a party on the Closing Date and may enter into or assume new
Operating Leases in the ordinary course of its business.
8.15 Dividends and Other Distributions.
The Borrower will not permit any Consolidated Party to declare or pay any
dividend on, or purchase or redeem any shares of, any class of Capital Stock of
any Subsidiary of the Borrower (except pursuant to a merger permitted by Section
8.4), or make any other payment or distribution on or in respect of any class of
Capital Stock of any Subsidiary of the Borrower or set aside any amounts for any
such purpose, except:
(i) any wholly-owned Subsidiary of the Borrower may declare and pay
dividends to the Borrower or a wholly-owned Subsidiary of the Borrower; and
(ii) any Subsidiary of the Borrower may distribute shares of its common
stock to holders of the same or another class of its common stock as a stock
dividend or in connection with a stock split.
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8.16 Environmental Liabilities.
The Borrower will not permit any Consolidated Party to become subject to
any liabilities, obligations or costs which the Agent reasonably deems have or
are likely to have a Material Adverse Effect on the condition (financial or
otherwise), properties, business or results of operations of the Borrower and
its Subsidiaries taken as a whole arising out of or relating to (i) the Release
or threatened Release at any location of any Material of Environmental Concern
into the environment, or any remedial action in response thereto, or (ii) any
violation of any environmental, health or safety requirement under federal,
state or local laws; provided, however, that prior to the date that the Borrower
or any Subsidiary of the Borrower is required to pay such liability this
covenant shall not be violated so long as (A) the Borrower shall have notified
the Agent of the assertion of such liability or required expenditures promptly
upon obtaining knowledge of such assertion, (B) the Borrower shall have
continued to furnish the Agent with such information concerning such asserted
liability or required expenditure as the Agent shall have reasonably requested,
or as otherwise provided herein and (C) the Borrower or such Subsidiary shall,
to the extent deemed appropriate in its business judgment, be diligently
pursuing indemnification for such liability or required expenditures from any
Person which has an obligation to provide such indemnification.
8.17 Futures Contracts.
The Borrower will not permit any Consolidated Party to purchase, sell or
otherwise deal with contracts for the future delivery of goods, commodities or
services, or in commodities options, including, without limitation, cotton
futures, except for hedge transactions or hedging positions in a contract for
future delivery of goods, commodities, or services, where such transactions or
positions represent a substitute for transactions to be made or positions to be
taken at a later time and where such transactions or positions are economically
appropriate to the reduction of risks in the conduct and management of the
Consolidated Parties' respective businesses; provided, however, that Hedging
Agreements, as defined in Section 1.1 hereof, are not limited by this provision.
8.18 Inactive Subsidiaries.
The Borrower will not permit any Consolidated Party to transfer any asset
or assets (including Capital Stock) with an aggregate value in excess of $10,000
to any Inactive Subsidiary or permit any Inactive Subsidiary to engage in any
business activity unless such Inactive Subsidiary is then a Guarantor and
Grantor under the Collateral Trust Agreement.
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SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such default shall continue for two (2) or
more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings
under Letters of Credit, or of any Fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith or therewith; or
(b) Representations. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other
Credit Documents, or in any statement or certificate delivered or required
to be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was deemed to have been made;
or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.9, 7.11, or 7.12;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b) (c) or (d)
and such default shall continue unremedied for a period of at least
5 days;
(iii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1)
contained in this Credit Agreement and such default shall continue
unremedied for a period of at least 20 days after the earlier of a
responsible officer of a Credit Party becoming aware of (or should
have been aware of) such default or written or telephonic notice
(confirmed in writing) thereof by the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in
any of the other Credit
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Documents (subject to applicable grace or cure periods, if any), or (ii)
except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5,
any Credit Document shall fail to be in full force and effect or to give
the Agent, the Trustee and/or the Banks the Liens, rights, powers and
privileges purported to be created thereby, or any Credit Party shall so
state in writing; or
(e) Guaranties. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, the guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any provision thereof shall
cease to be in full force and effect, or any Guarantor (including any
Additional Credit Party) hereunder or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under
such guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect
to any Consolidated Party; or
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) in excess of $10,000,000 in the aggregate for the Consolidated
Parties taken as a whole, (A) any Consolidated Party shall (1) default in
any payment (beyond the applicable grace period with respect thereto, if
any) with respect to any such Indebtedness, or (2) the occurrence and
continuance of an event of default (and after any applicable grace period)
in the observance or performance relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or exist, the effect
of which event or condition is to cause, or permit, the holder or holders
of such Indebtedness (or trustee or agent on behalf of such holders) to
cause any such Indebtedness to become due prior to its stated maturity; or
(B) any such Indebtedness shall be declared due and payable, or required
to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be entered
against one or more of the Consolidated Parties involving a liability of
$10,000,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged coverage
and has the ability to perform) and any such judgments or decrees shall
not have been vacated, discharged or stayed or bonded pending appeal
within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event
or condition could reasonably be expected to have a Material Adverse
Effect: (i) any "accumulated funding deficiency," as such term is defined
in Section 302 of ERISA and Section 412 of the Code, whether or not
waived, shall exist with respect to any Plan, or any lien shall arise on
the assets of any Consolidated Party or any ERISA Affiliate in favor of
the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to a
Single Employer Plan, which is, in the reasonable opinion of the Agent,
likely to result in the termination of such Plan for purposes of Title IV
of ERISA; (iii) an ERISA Event shall occur with respect
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to a Multiemployer Plan or Multiple Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in (A) the termination
of such Plan for purposes of Title IV of ERISA, or (B) any Consolidated
Party or any ERISA Affiliate incurring any liability in connection with a
withdrawal from, reorganization of (within the meaning of Section 4241 of
ERISA), or insolvency or (within the meaning of Section 4245 of ERISA)
such Plan; or (iv) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject any Consolidated Party or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which any Consolidated Party or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability; or
(j) Senior Note Indentures. There shall occur and be continuing any
Event of Default under and as defined in the Senior Note Indentures; or
(k) Ownership. There shall occur a Change of Control; or
(l) Uninsured Loss. There occurs any material uninsured damage to,
or loss, theft or destruction of, or material environmental impairment to,
any material portion of the Collateral.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Banks
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Banks (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Banks, by written notice to the Credit Parties take any of the following
actions:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness
or obligations of any and every kind owing by the Credit Parties to the
Agent and/or any of the Banks hereunder to be due whereupon the same shall
be immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Credit
Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), they will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Banks, in a cash collateral account as additional
security for the LOC Obligations in respect of subsequent drawings under
all then outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
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(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur with respect to the Borrower, then the Commitments shall
automatically terminate and all Loans, all reimbursement obligations arising
from drawings under Letters of Credit, all accrued interest in respect thereof,
all accrued and unpaid Fees and other indebtedness or obligations owing to the
Agent and/or any of the Banks hereunder automatically shall immediately become
due and payable without the giving of any notice or other action by the Agent or
the Banks.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment, Powers and Immunities.
Each Bank hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Bank; (b) shall not be responsible
to the Banks for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
10.2 Reliance by Agent.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy)
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believed by it to be genuine and correct and to have been signed, sent or made
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel for any Credit Party), independent
accountants, and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until the Agent receives and accepts an Assignment and Acceptance executed
in accordance with Section 11.3(b) hereof. As to any matters not expressly
provided for by this Credit Agreement, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Banks, and such instructions
shall be binding on all of the Banks; provided, however, that the Agent shall
not be required to take any action that exposes the Agent to personal liability
or that is contrary to any Credit Document or applicable law or unless it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking any such
action.
10.3 Defaults.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Bank or the a Credit Party specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Banks. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Banks, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Banks, except to
the extent that other provisions of this Agreement expressly require that any
such action be taken only with the consent, direction or authorization of the
Banks or the Required Banks, as applicable.
10.4 Rights as a Bank.
With respect to its Commitment and the Loans made by it, NationsBank (and
any successor acting as Agent) in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may exercise the same
as though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. NationsBank (and any successor acting as Agent) and its Affiliates may
(without having to account therefor to any Bank) accept deposits from, lend
money to, make investments in, provide services to, and generally engage in any
kind of lending, trust, or other business with any Credit Party or any of its
Subsidiaries or Affiliates as if it were not acting as Agent, and NationsBank
(and any successor acting as Agent) and its Affiliates may accept fees and other
consideration from any Credit Party or any of its Subsidiaries or Affiliates for
services in connection with this Credit Agreement or otherwise without having to
account for the same to the Banks.
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10.5 Indemnification.
The Banks agree to indemnify the Agent (to the extent not reimbursed under
Section 11.5 hereof, but without limiting the obligations of the Credit Parties
under such Section) ratably in accordance with their respective Commitments, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees), or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including by any Bank) in any way relating to or
arising out of any Credit Document or the transactions contemplated thereby or
any action taken or omitted by the Agent under any Credit Document; provided
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Person to be indemnified.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or expenses payable by
the Credit Parties under Section 11.5, to the extent that the Agent is not
promptly reimbursed for such costs and expenses by the Credit Parties. The
agreements in this Section 10.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
10.6 Non-Reliance on Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance on the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Credit Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition, or business of any Credit Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 Successor Agent.
The Agent may resign at any time by giving notice thereof to the Banks and
the Credit Parties. Upon any such resignation, the Required Banks shall have the
right to appoint a successor Agent reasonably satisfactory to the Borrower. If
no successor Agent shall have been so appointed by the Required Banks and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent which shall be a commercial Bank
organized under the laws of the United States of America having combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 10 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
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10.8 Co-Agents.
The Co-Agents, in their capacity as Co-Agents, shall have no duties or
responsibilities, express or implied, under this Agreement or any other Credit
Document.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Agent, set forth below, and, in the case of the Banks, set forth on Schedule
2.1(a), or at such other address as such party may specify by written notice to
the other parties hereto:
if to any Credit Party:
WestPoint Stevens Inc.
507 W. 10th Street
West Point, Georgia 31833
Attn: Morgan Schuessler
Telephone: (706) 645-4230
Telecopy: (706) 645-4969
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services
Telephone: (704) 386-1316
Telecopy: (704) 386-9923
with a copy to:
NationsBank, N. A.
100 North Tryon Street, 8th Floor
Charlotte, North Carolina 28255
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Attn: Timothy Martin
Telephone: (704) 386-8385
Telecopy: (704) 386-1270
11.2 Right of Set-Off; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Bank (and each of its Affiliates) is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Bank (or any of
its Affiliates) to or for the credit or the account of any Credit Party against
any and all of the obligations of such Person now or hereafter existing under
this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Bank shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Bank agrees promptly to notify any affected Credit Party after any such set-off
and application made by such Bank; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section 11.2 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such Bank
may have.
11.3 Benefit of Agreement.
(a) This Credit Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and assigns of the parties
hereto; provided that none of the Credit Parties may assign or transfer any of
its interests and obligations without prior written consent of the Banks;
provided further that the rights of each Bank to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited as
set forth in this Section 11.3.
(b) Each Bank may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement (including,
without limitation, all or a portion of its Loans, its Notes, and its
Commitment); provided, however, that
(i) except in the case of an assignment to another Bank or an
assignment of all of a Bank's rights and obligations under this Credit
Agreement, any such partial assignment shall be in an amount at least
equal to $10,000,000 (or, if less, the remaining amount of the Commitment
being assigned by such Bank) or an integral multiple of $1,000,000 in
excess thereof;
(ii) after such assignment, such Bank and its Affiliates continue to
hold in the aggregate at least 51% of their aggregate initial Commitment
set forth on Schedule 2.1(a);
(iii) each such assignment by a Bank shall be of a constant, and not
varying, percentage of all of its rights and obligations under this Credit
Agreement and the Notes; and
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(iv) the parties to such assignment shall execute and deliver to the
Agent for its acceptance an Assignment and Acceptance in the form of
Exhibit 11.3(b) hereto, together with any Note subject to such assignment
and a processing fee of $2,500 (or if the Assignee is a Bank, $1,500).
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Bank hereunder and
the assigning Bank shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Credit Agreement. Upon
the consummation of any assignment pursuant to this Section 11.3(b), the
assignor, the Agent and the Borrower shall make appropriate arrangements so
that, if required, new Notes are issued to the assignor and the assignee. If the
assignee is not a United States person under Section 7701(a)(30) of the Code, it
shall deliver to the Borrower and the Agent certification as to exemption from
deduction or withholding of Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in Section 11.1 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Banks and the
Commitment of, and principal amount of the Loans owing to, each Bank from time
to time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Credit Parties, the
Agent and the Banks may treat each Person whose name is recorded in the Register
as a Bank hereunder for all purposes of this Credit Agreement. The Register
shall be available for inspection by the Credit Parties or any Bank at any
reasonable time and from time to time upon reasonable prior notice. No
assignment shall be effective unless it has been recorded on the Register as
provided herein.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit 11.3(b) hereto,
within five (5) Business Days of its receipt thereof (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the parties thereto.
(e) Each Bank may sell participations to one or more Persons in all or a
portion of its rights, obligations or rights and obligations under this Credit
Agreement (including all or a portion of its Commitment or its Loans); provided,
however, that (i) such Bank's obligations under this Credit Agreement shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participant
shall be entitled to the benefit of the yield protection provisions contained in
Sections 3.7 through 3.12, inclusive, and the right of set-off contained in
Section 11.2, and (iv) the Credit Parties shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Credit Agreement, and such Bank shall retain the sole right to
enforce the obligations of the Credit Parties relating to the Credit Party
Obligations owing to such Bank and to approve any amendment, modification, or
waiver of any provision of this Credit Agreement (other than amendments,
modifications, or waivers decreasing the amount of principal of or the rate at
which interest is payable on such Loans or Notes, extending any
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scheduled principal payment date or date fixed for the payment of interest on
such Loans or Notes reducing the principal amount of any Credit Party
Obligations or any fees owed to the Banks hereunder, or extending its
Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Bank may at any time assign and pledge all or any portion of its
Loans and its Notes to any Federal Reserve Bank as collateral security pursuant
to Regulation A and any Operating Circular issued by such Federal Reserve Bank.
No such assignment shall release the assigning Bank from its obligations
hereunder.
(g) Any Bank may furnish any information concerning the Consolidated
Parties in the possession of such Bank from time to time to assignees and
participants (including prospective assignees and participants), subject,
however, to the provisions of Section 11.15 hereof.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Bank in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Agent or any Bank and any of the Credit Parties
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Bank would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle the Credit Parties to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Agent or the Banks to any other or further action in any
circumstances without notice or demand.
11.5 Expenses; Indemnification.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the Agent
(including the cost of internal counsel) with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under the Credit
Documents. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Banks, if any (including, without limitation, reasonable
attorneys' fees and expenses and the cost of internal counsel), in connection
with the enforcement (whether through negotiations, legal proceedings, or
otherwise) of the Credit Documents and the other documents to be delivered
hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and each
Bank and each of their Affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any
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investigation, litigation, or proceeding or preparation of defense in connection
therewith) the Credit Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans, except to the extent
such claim, damage, loss, liability, cost, or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. In the
case of an investigation, litigation or other proceeding to which the indemnity
in this Section 11.5 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by any of the Credit
Parties, their respective directors, shareholders or creditors or an Indemnified
Party or any other Person or any Indemnified Party is otherwise a party thereto
and whether or not the transactions contemplated hereby are consummated. The
Borrower agrees not to assert any claim against the Agent, any Bank, any of
their Affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Credit Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Banks and the
Borrower, provided, however, that:
without the consent of each Bank affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(a) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
(c) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(d) increase the Commitment of a Bank over the amount thereof
in effect (it being understood and agreed that a waiver of any
Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Bank),
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<PAGE> 104
(e) release all or substantially all of the Collateral,
(f) except as the result of or in connection with a
dissolution, merger or disposition of a Consolidated Party permitted
under Section 8.4, release the Borrower or substantially all of the
other Credit Parties from its or their obligations under the Credit
Documents,
(g) amend, modify or waive any provision of this Section 11.6
or 9.1(a), 11.2, 11.5 or 11.9,
(h) reduce any percentage specified in, or otherwise modify,
the definition of Required Banks,
(i) consent to the assignment or transfer by the Borrower or
all or substantially all of the other Credit Parties of any of its
or their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby,
(j) without the consent of the Agent, no provision of Section
10 may be amended,
(k) without the consent of the Issuing Lender, no provision of
Section 2.4 may be amended, or
(l) without the consent of the Swingline Lender, no provision
of Section 2.5 may be amended.
Notwithstanding the fact that the consent of all the Banks is required in
certain circumstances as set forth above, (x) each Bank is entitled to
vote as such Bank sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Bank acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersede the unanimous consent
provisions set forth herein and (y) the Required Banks may consent to
allow a Credit Party to use cash collateral in the context of a Bankruptcy
or insolvency proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
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<PAGE> 105
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Survival.
All indemnities set forth herein shall survive the execution and delivery
of this Credit Agreement, the making of the Loans, the issuance of the Letters
of Credit, the repayment of the Loans, LOC Obligations and other obligations
under the Credit Documents and the termination of the Commitments hereunder, and
all representations and warranties made by the Borrower herein shall survive
delivery of the Notes and the making of the Loans hereunder.
11.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
legal action or proceeding with respect to this Credit Agreement or any
other Credit Document may be brought in the courts of the State of New
York, or of the United States for the Southern District of New York, and,
by execution and delivery of this Credit Agreement, each of the Borrower
and Foreign Borrowers hereby irrevocably accepts for itself and in respect
of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the Borrower and the Foreign
Borrowers further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to the Borrower at the address set out for notices pursuant to
Section 11.1, such service to become effective three (3) days after such
mailing. Nothing herein shall affect the right of the Agent or any Bank to
serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Credit Party in any other
jurisdiction.
(b) Each of the Borrower and the Foreign Borrowers hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Credit Agreement or any other Credit
Document brought in the courts referred to in subsection (a) above and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE BANKS,
THE ISSUING LENDER, THE SWINGLINE LENDER, THE BORROWER AND EACH FOREIGN
BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
CREDIT
100
<PAGE> 106
AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
11.11 Arbitration.
(a) Each Foreign Borrower agrees that at the Required Banks' sole election
any controversy or claim arising out of or relating to this Credit Agreement or
any of the Credit Documents, or to the breach or nonperformance thereof, may be
settled immediately by submitting the same to binding arbitration in New York,
New York (or such other place as the parties may agree) in accordance with the
Commercial Arbitration Rules then in effect of the American Arbitration
Association. Upon the request and submission of any controversy or claim for
arbitration hereunder, the Agent shall give the Borrower not less than 45 days
written notice of the request for arbitration, the nature of the controversy or
claim, and the time and place set for arbitration. Each Foreign Borrower agrees
that such notice is reasonable to enable such Foreign Borrower sufficient time
to prepare and present its case before the arbitration panel. Judgment on the
award rendered by the arbitration panel may be entered in any court in which any
action could have been brought or maintained pursuant to Section 11.10 of this
Credit Agreement, including without limitation any court of the State of New
York or any federal court sitting in New York. The expense of arbitration shall
be paid as provided by the arbitral panel.
(b) The provisions of subsection (a) hereof are intended to comply with
the requirements of the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (the "Convention"). To the extent that any provisions of
subsection (a) hereof are not consistent with or fail to conform to the
requirements set out in the Convention, subsection (a) hereof shall be deemed
amended to conform to the requirements of the Convention.
(c) Each Foreign Borrower hereby specifically consent and submits to the
jurisdiction of the courts of New York and courts of the United States located
in New York for purposes of entry of a judgment or arbitration award entered by
the arbitration panel.
11.12 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.13 Amended and Restated Agreement; Entirety.
This Agreement is an amendment, restatement and replacement of the
Original Credit Agreement and the 1994 Credit Agreement. The Loans are for the
purpose of refinancing and replacing the Indebtedness evidenced by the 1994
Credit Agreement and, originally, the Original Credit Agreement. To the extent
that the Revolving Committed Amount exceeds the sum of the Primary Revolving
Loan Commitments and the Secondary Revolving Loan Commitments, as such terms are
used in the 1994 Credit Agreement, the Loans hereunder constitute additional
Funded Indebtedness incurred by the Borrower hereunder.
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<PAGE> 107
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.14 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on or after
the Closing Date when it shall have been executed by the Borrower, the Foreign
Borrowers and the Agent, and the Agent shall have received copies hereof
(telefaxed or otherwise) which, when taken together, bear the signatures of each
Bank, and thereafter this Credit Agreement shall be binding upon and inure to
the benefit of the Borrower, each Credit Party, the Agent and each Bank and
their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding, no Letters of Credit shall be
outstanding, all of the Credit Party Obligations have been irrevocably satisfied
in full and all of the Commitments hereunder shall have expired or been
terminated.
11.15 Confidentiality.
The Agent and each Bank (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the Credit
Parties pursuant to this Credit Agreement that is marked confidential; provided
that nothing herein shall prevent any Lending Party from disclosing such
information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or Affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Credit Agreement, (g) in connection with
any litigation to which such Lending Party or any of its Affiliates may be a
party, (h) to the extent necessary in connection with the exercise of any remedy
under this Credit Agreement or any other Credit Document, and (i) subject to
provisions substantially similar to those contained in this Section 11.15, to
any actual or proposed participant or assignee.
11.16 Source of Funds.
Each of the Banks hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Bank in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Bank in which any employee benefit
plan (or its related trust) has any interest;
102
<PAGE> 108
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Bank, such Bank has
disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such account as
of the date of such purchase (and, for purposes of this subsection (b),
all employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets of
an insurance company's general account, such insurance company has
complied with all of the requirements of the regulations issued under
Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit
plans which such Bank has identified in writing to the Borrower.
As used in this Section 11.16, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.17 Judgment Currency.
(i) The Borrower's and each Foreign Borrower's obligations hereunder to
make payments in Dollars or in any Available Foreign Currency (the "Obligation
Currency") shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by the Agent or a Bank of the full amount of
the Obligation Currency expressed to be payable to the Agent or such Bank under
this Credit Agreement. If, for the purpose of obtaining or enforcing judgment
against any Credit Party in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made, at the Dollar Equivalent or the Foreign Currency Equivalent, as
applicable, determined in each case as of the Business Day immediately preceding
the day on which the judgment is given (such Business Day being hereinafter
referred to as the "Judgment Currency Conversion Date").
(ii) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, such amount payable by the Borrower shall be reduced or increased, as
applicable, such that the amount paid in the Judgment Currency, when converted
at the rate of exchange prevailing on the date of payment, will produce the
amount of the Obligation Currency which could have been purchased with the
amount of Judgment Currency stipulated in the judgment or judicial award at the
rate of exchange prevailing on the Judgment Currency Conversion Date.
11.18 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any other Credit
Document, on the other hand, this Credit Agreement shall control.
103
<PAGE> 109
[Signature Pages to Follow]
104
<PAGE> 110
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: WESTPOINT STEVENS INC.
a Delaware corporation
By: /s/ Morgan M. Schuessler
-----------------------------------------------
Name: Morgan M. Schuessler
---------------------------------------------
Title: Executive Vice President - Finance and
--------------------------------------------
Chief Financial Officer
FOREIGN BORROWERS: WESTPOINT STEVENS (UK) LIMITED
By: /s/ Morgan M. Schuessler
-----------------------------------------------
Name: Morgan M. Schuessler
---------------------------------------------
Title: Director, Vice President & Treasurer
--------------------------------------------
WESTPOINT STEVENS (EUROPE) LIMITED
By: /s/ Morgan M. Schuessler
-----------------------------------------------
Name: Morgan M. Schuessler
---------------------------------------------
Title: Director, Vice President & Treasurer
--------------------------------------------
BANKS: NATIONSBANK, N. A.,
individually in its capacity as a
Bank, as the Issuing Lender, and the Swingline
Lender and in its capacity as Agent
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 111
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: WESTPOINT STEVENS INC.
a Delaware corporation
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
FOREIGN BORROWERS: WESTPOINT STEVENS (UK) LIMITED
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
WESTPOINT STEVENS (EUROPE) LIMITED
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
BANKS: NATIONSBANK, N. A.,
individually in its capacity as a
Bank, as the Issuing Lender, and the Swingline
Lender and in its capacity as Agent
By: /s/ David H. Dinkins
-----------------------------------------------
Name: DAVID H. DINKINS
---------------------------------------------
Title: Vice President
--------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 112
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: WESTPOINT STEVENS INC.
a Delaware corporation
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
FOREIGN BORROWERS: WESTPOINT STEVENS (UK) LIMITED
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
WESTPOINT STEVENS (EUROPE) LIMITED
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
BANKS: NATIONSBANK, N. A.,
individually in its capacity as a
Bank, as the Issuing Lender, and the Swingline
Lender and in its capacity as Agent
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Judith Coniwell
-----------------------------------------------
Name:
---------------------------------------------
Title: Vice President
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 113
THE BANK OF NEW YORK
By: /s/ R R Reedy
-----------------------------------------------
Name: RONALD R. REEDY
---------------------------------------------
Title: Vice President
--------------------------------------------
SCOTIABANC INC.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
WACHOVIA BANK, N.A.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SOCIETE GENERALE
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
ABN AMRO BANK, N.V., Atlanta Agency
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SUNTRUST BANK, ATLANTA
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
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Credit Agreement
<PAGE> 114
THE BANK OF NEW YORK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SCOTIABANC INC.
By: /s/ William E. Zarrett
-----------------------------------------------
Name: William E. Zarrett
---------------------------------------------
Title: Senior Relationship Manager
--------------------------------------------
WACHOVIA BANK, N.A.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SOCIETE GENERALE
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
ABN AMRO BANK, N.V., Atlanta Agency
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SUNTRUST BANK, ATLANTA
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 115
THE BANK OF NEW YORK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SCOTIABANC INC.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
----------------------------------------------
WACHOVIA BANK, N.A.
By: /s/ Douglas W. Strickland
-----------------------------------------------
Name: Douglas W. Strickland
---------------------------------------------
Title: Vice President
--------------------------------------------
SOCIETE GENERALE
By: /s/ Ralph Saheb
-----------------------------------------------
Name: Ralph Saheb
---------------------------------------------
Title: Vice President, Southwest Operations Manager
--------------------------------------------
ABN AMRO BANK, N.V., Atlanta Agency
By: /s/ G. Mark Clegg, Jr. /s/ Linda K. Davis
-----------------------------------------------
Name: G. Mark Clegg, Jr. Linda K. Davis
---------------------------------------------
Title: Vice President Vice President
--------------------------------------------
SUNTRUST BANK, ATLANTA
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 116
THE BANK OF NEW YORK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SCOTIABANC INC.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
WACHOVIA BANK, N.A.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SOCIETE GENERALE
By: /s/ Ralph Saheb
-----------------------------------------------
Name: Ralph Saheb
---------------------------------------------
Title: Vice President Southwest Operations Manager
--------------------------------------------
ABN AMRO BANK, N.V., Atlanta Agency
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SUNTRUST BANK, ATLANTA
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 117
THE BANK OF NEW YORK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SCOTIABANC INC.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
WACHOVIA BANK, N.A.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SOCIETE GENERALE
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
ABN AMRO BANK, N.V.
By: /s/ G. Mark Clegg Jr. /s/ Linda K. Davis
-----------------------------------------------
Name: G. Mark Clegg Jr. Linda K. Davis
---------------------------------------------
Title: Vice President Vice President
--------------------------------------------
SUNTRUST BANK, ATLANTA
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 118
THE BANK OF NEW YORK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SCOTIABANC INC.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
WACHOVIA BANK, N.A.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SOCIETE GENERALE
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
ABN AMRO BANK, N.V., Atlanta Agency
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
SUNTRUST BANK, ATLANTA
By: /s/ Laura Kahn /s/ David W. Penter
-----------------------------------------------
Name: Laura Kahn David W. Penter
---------------------------------------------
Title: SVP Group Vice President
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 119
FIRST UNION NATIONAL BANK
By: /s/ Roger Pelz
-----------------------------------------------
Name: Roger Pelz
---------------------------------------------
Title: Senior Vice President
--------------------------------------------
FLEET BANK, N.A.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
AMSOUTH BANK OF ALABAMA
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
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Credit Agreement
<PAGE> 120
FIRST UNION NATIONAL BANK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
FLEET BANK, N.A.
By: /s/ Steven R. Navaro
-----------------------------------------------
Name: Steven R. Navaro
---------------------------------------------
Title: Senior Vice President
--------------------------------------------
AMSOUTH BANK OF ALABAMA
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 121
FIRST UNION NATIONAL BANK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
FLEET BANK, N.A.
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
AMSOUTH BANK
By: /s/ Alan Lott
-----------------------------------------------
Name: Alan Lott
---------------------------------------------
Title: Vice President
--------------------------------------------
[signatures continued]
Westpoint Stevens Inc.
Credit Agreement
<PAGE> 122
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A.
"Rabobank Nederland" New York Branch
By: /s/ Barbara A. Hyland
-----------------------------------------------
Name: Barbara A. Hyland
---------------------------------------------
Title: Senior Vice President
--------------------------------------------
By: /s/ Dana W. Hemenway
-----------------------------------------------
Name: DANA W. HEMENWAY
---------------------------------------------
Title: Vice President
--------------------------------------------
WestPoint Stevens Inc.
Credit Agreement
<PAGE> 123
Exhibit 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N. A.,
as Agent for the Banks
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, WESTPOINT STEVENS INC. (the "Borrower"), refers to the
Second Amended and Restated Credit Agreement dated as of June 9, 1998 (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), among inter alia the Borrower, the Banks and NationsBank, N. A., as
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives notice pursuant to Section 2.1, [2.3], [2.5] of the Credit Agreement that
it requests a Revolving Loan [Foreign Currency Loan] [Swingline Loan] advance
under the Credit Agreement, and in connection therewith sets forth below the
terms on which such Loan advance is requested to be made:
(A) Date of Borrowing (which is a Business Day) _______________________
(B) Dollar Amount of Principal Amount of Borrowing _______________________
(C) Interest rate basis _______________________**
(D) Interest Period(s) and the last day thereof _______________________
[(E) Applicable Foreign Currency _______________________]*
[(F)] Estimated Foreign Equivalent _______________________]*
[(G)] Applicable Borrower _______________________]*
[*For Foreign Currency Loans]
[**For Swingline Loans, only Base Rate Loans are available.]
1
<PAGE> 124
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
WESTPOINT STEVENS INC.
By: __________________________
Name: ________________________
Title: _______________________
2
<PAGE> 125
Exhibit 2.1(e)
FORM OF REVOLVING NOTE
[DATE]
FOR VALUE RECEIVED, WESTPOINT STEVENS INC., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of __________________________,
its successors and assigns (the "Bank"), at the office of NationsBank, N. A., as
Agent (the "Agent"), at 101 North Tryon Street, Independence Center,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the holder hereof may designate), at the times set forth in the Second
Amended and Restated Credit Agreement dated as of the date hereof among inter
alia the Borrower, the Banks and the Agent (as it may be as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement), but in no event later than the Maturity Date in
immediately available funds as provided in the Credit Agreement, the principal
amount of:
(i) in the case of Revolving Loans, such Bank's Revolving Commitment
Percentage of the Revolving Committed Amount or, if less, the aggregate
unpaid principal amount of all Revolving Loans made by such Bank to the
Borrower;
(ii) in the case of Competitive Loans, the aggregate principal
amount of all Competitive Loans made by such Bank to the Borrower; and
(iii) in the case of Foreign Currency Loans, such Bank's Revolving
Commitment Percentage of the Foreign Currency Committed Amount or, if
less, the aggregate unpaid principal amount of all Foreign Currency Loans
made by such Bank to the Borrower;
together with interest thereon at the rates and as provided in the Credit
Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information or attach such schedule shall not affect
the obligation of the Borrower to pay amounts evidenced hereby and arising under
the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Bank shall become immediately due
and payable, without presentment, demand, protest or notice of any kind, all of
which are hereby waived by the Borrower.
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<PAGE> 126
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
WESTPOINT STEVENS INC.
By: __________________________
Name: ________________________
Title: _______________________
2
<PAGE> 127
EXHIBIT 2.2(b)-1
FORM OF COMPETITIVE BID REQUEST
NationsBank, N.A.,
as Agent for the Banks
101 N. Tryon Street
Independence Center, 15th Floor
NC1-005-15-04
Charlotte, North Carolina 28255
Attn: Agency Services
Ladies and Gentlemen:
Reference is made to that Second Amended and Restated Credit Agreement
dated as of June 9, 1998 (as amended and modified, the "Credit Agreement"),
among inter alia WESTPOINT STEVENS INC., a Delaware corporation (the
"Borrower"), the Banks identified therein and NationsBank, N.A., as Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives notice pursuant to Section 2.2(a) of the Credit Agreement it requests
solicitation of Competitive Bids under the Credit Agreement, and in connection
herewith sets forth below the terms on which the related Competitive Loan
borrowing is requested to be made:
(A) Date of Competitive Loan borrowing
(which is a Business Day) __________________
(B) Principal amount of
Competitive Loan borrowing __________________
(C) Duration of Interest Period Requested
and last day thereof __________________
In accordance with the requirements of Section 5.2 of the Credit
Agreement, the Borrower hereby reaffirms the representations and warranties set
forth in the Credit Agreement as provided in subsection (b) of such Section and
confirms that the matters referenced in subsections (c), (d), (e) and (f) of
such Section are true and correct.
WESTPOINT STEVENS INC.
By: __________________________
Name: ________________________
Title: _______________________
5
<PAGE> 128
EXHIBIT 2.2(b)-2
FORM OF NOTICE OF RECEIPT OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address]
Attention:
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit Agreement
dated as of June 9, 1998 (as amended and modified, the "Credit Agreement"),
among inter alia WESTPOINT STEVENS INC.., a Delaware corporation (the
"Borrower"), the Banks, and NationsBank, N.A., as Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement. The Borrower has made a Competitive Bid Request
under the Credit Agreement on _____________, 19__, pursuant to Section 2.2(b) of
the Credit Agreement, and in that connection you are invited to submit a
Competitive Bid by 10:00 A.M. (Charlotte, North Carolina time) ______________,
19__ [date of proposed Competitive Loan borrowing]. Your Competitive Bid must
comply with Section 2.2(c) of the Credit Agreement and the terms set forth below
on which the Competitive Bid Request was made:
(A) Date of Competitive Loan Borrowing __________________
(B) Principal amount of
Competitive Borrowing __________________
(C) Duration of Interest Period Requested
and last day thereof __________________
NATIONSBANK, N.A., as Agent
By: __________________________
Name: ________________________
Title: _______________________
6
<PAGE> 129
Exhibit 2.2(c)
FORM OF COMPETITIVE BID
NationsBank, N.A.,
as Agent for the Banks
101 N. Tryon Street
Independence Center, 15th Floor
NC1-005-15-04
Charlotte, North Carolina 28255
Attn: Agency Services
Ladies and Gentlemen:
The undersigned, [Name of Bank], refers to the Second Amended and Restated
Credit Agreement dated as of [DATE] (as amended, modified, extended or restated
from time to time, the "Credit Agreement"), among inter alia WESTPOINT STEVENS
INC. (the "Borrower"), the Banks and NationsBank, N.A., as Agent. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement. The undersigned hereby makes a
Competitive Bid pursuant to Section 2.2(c) of the Credit Agreement, in response
to the Competitive Bid Request made by the Borrower on ________________, 19__,
and in that connection sets forth below the terms on which such Competitive Bid
is made:
(A) Principal Amount ____________________
(B) Competitive Bid Rate ____________________
(C) Interest Period and last day thereof ____________________
The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the Credit Agreement, to extend credit to the Borrower
upon acceptance by the Borrower of this bid in accordance with Section 2.2(e) of
the Credit Agreement.
[NAME OF BANK]
By: __________________________
Name: ________________________
Title: _______________________
7
<PAGE> 130
Exhibit 2.2(e)
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
NationsBank, N.A.,
as Agent for the Banks
101 N. Tryon Street
Independence Center, 15th Floor
NC1-005-15-04
Charlotte, North Carolina 28255
Attn: Agency Services
Ladies and Gentlemen:
The undersigned, WESTPOINT STEVENS INC. (the "Borrower"), refers to the
Second Amended and Restated Credit Agreement dated as of [DATE] (as amended,
modified, extended or restated from time to time, the "Credit Agreement"), among
inter alia the Borrower, the Banks and NationsBank, N.A., as Agent.
In accordance with Section 2.2(e) of the Credit Agreement, in connection
with our Competitive Bid Request dated ______________ and in accordance with
Section 2.2(e) of the Credit Agreement, we hereby accept the following bids for
maturity on [date]:
Principal Amount Competitive Bid Rate Bank
---------------- -------------------- ----
$ [%]
$ [%]
We hereby reject the following bids:
Principal Amount Competitive Bid Rate Bank
---------------- -------------------- ----
$ [%]
$ [%]
WESTPOINT STEVENS INC.
By: __________________________
Name: ________________________
<PAGE> 131
Exhibit 2.3(e)
FORM OF FOREIGN CURRENCY NOTE
[DATE]
FOR VALUE RECEIVED, WESTPOINT STEVENS (UK) LIMITED, a limited liability
company incorporated in England (the "Foreign Borrower"), hereby promises to pay
to the order of __________________________, its successors and assigns (the
"Bank"), at the office of NationsBank, N. A., as Agent (the "Agent"), at 101
North Tryon Street, Independence Center, NC1-001-15-04, Charlotte, North
Carolina 28255 (or at such other place or places as the holder hereof may
designate), at the times set forth in the Second Amended and Restated Credit
Agreement dated as of the date hereof among inter alia WestPoint Stevens Inc.,
the Foreign Borrower, the Banks and the Agent (as it may be as amended,
modified, restated or supplemented from time to time, the "Credit Agreement";
all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Credit Agreement), but in no event later than the Maturity Date in
immediately available funds as provided in the Credit Agreement, the principal
amount of such Bank's Revolving Commitment Percentage of the Foreign Currency
Committed Amount or, if less, the aggregate unpaid principal amount of all
Foreign Currency Loans made by such Bank to the Foreign Borrower, together with
interest thereon at the rates and as provided in the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information or attach such schedule shall not affect
the obligation of the Foreign Borrower to pay amounts evidenced hereby and
arising under the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Foreign Borrower to the Bank shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Foreign Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Foreign Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained as
provided in Section 11.3(c) of the Credit Agreement.
<PAGE> 132
IN WITNESS WHEREOF, the Foreign Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
WESTPOINT STEVENS (UK) LIMITED
By: __________________________
Name: ________________________
<PAGE> 133
EXHIBIT 2.3(e)
FORM OF FOREIGN CURRENCY NOTE
[DATE]
FOR VALUE RECEIVED, WESTPOINT STEVENS (EUROPE) LIMITED, a limited
liability company incorporated in England (the "Foreign Borrower"), hereby
promises to pay to the order of __________________________, its successors and
assigns (the "Bank"), at the office of NationsBank, N. A., as Agent (the
"Agent"), at 101 North Tryon Street, Independence Center, NC1-001-15-04,
Charlotte, North Carolina 28255 (or at such other place or places as the holder
hereof may designate), at the times set forth in the Second Amended and Restated
Credit Agreement dated as of the date hereof among inter alia WestPoint Stevens
Inc., the Foreign Borrower, the Banks and the Agent (as it may be as amended,
modified, restated or supplemented from time to time, the "Credit Agreement";
all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Credit Agreement), but in no event later than the Maturity Date in
immediately available funds as provided in the Credit Agreement, the principal
amount of such Bank's Revolving Commitment Percentage of the Foreign Currency
Committed Amount or, if less, the aggregate unpaid principal amount of all
Foreign Currency Loans made by such Bank to the Foreign Borrower, together with
interest thereon at the rates and as provided in the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
any failure to endorse such information or attach such schedule shall not affect
the obligation of the Foreign Borrower to pay amounts evidenced hereby and
arising under the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Foreign Borrower to the Bank shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Foreign Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Foreign Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained as
provided in Section 11.3(c) of the Credit Agreement.
<PAGE> 134
IN WITNESS WHEREOF, the Foreign Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
WESTPOINT STEVENS (EUROPE) LIMITED
By: __________________________
Name: ________________________
Title: _______________________
<PAGE> 135
Exhibit 2.5(d)
FORM OF SWINGLINE NOTE
$25,000,000 [DATE]
FOR VALUE RECEIVED, WESTPOINT STEVENS INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of NATIONSBANK, N.A., its
successors and assigns (the "Swingline Lender"), at the office of NationsBank,
N.A., as Agent (the "Agent"), at 101 N. Tryon Street, Independence Center,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or places
as the holder hereof may designate), at the times set forth in the Second
Amended and Restated Credit Agreement dated as of the date hereof among inter
alia the Borrower, the Swingline Lender, the Banks and the Agent (as it may be
amended, modified, extended or restated from time to time, the "Credit
Agreement"; all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event later than the
Maturity Date, in Dollars and in immediately available funds, the principal
amount of TWENTY FIVE MILLION DOLLARS ($25,000,000) or, if less than such
principal amount, the aggregate unpaid principal amount of all Swingline Loans
made by the Swingline Lender to the Borrower pursuant to the Credit Agreement,
and to pay interest from the date hereof on the unpaid principal amount hereof,
in like money, at said office, on the dates and at the rates selected in
accordance with Section 2.5(c) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Swingline Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on Schedule A attached hereto and incorporated
herein by reference, or on a continuation thereof which shall be attached hereto
and made a part hereof; provided, however, that any failure to endorse such
information on such schedule or continuation thereof shall not in any manner
affect the obligation of the Borrower to make payments of principal and interest
in accordance with the terms of this Note.
<PAGE> 136
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
WESTPOINT STEVENS INC.
By: __________________________
Name: ________________________
Title: _______________________
<PAGE> 137
SCHEDULE A TO THE
SWINGLINE NOTE
OF WESTPOINT STEVENS INC. IN FAVOR OF
NATIONSBANK, N.A.
DATED [DATE]
<TABLE>
<CAPTION>
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
- ---- ---- ------ --------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 138
Exhibit 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N. A.,
as Agent for the Banks
101 North Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, WESTPOINT STEVENS INC. (the "Borrower"), refers to the
Second Amended and Restated Credit Agreement dated as of June 9, 1998 (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"), among inter alia the Borrower, the Banks and NationsBank, N. A., as
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement. The Borrower hereby
gives notice pursuant to Section 3.2 of the Credit Agreement that it [a Foreign
Borrower] requests an extension or conversion of a [Revolving Loan][Foreign
Currency Loan] outstanding under the Credit Agreement, and in connection
therewith sets forth below the terms on which such extension or conversion is
requested to be made:
(A) Loan Type _______________________
(B) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period) _______________________
(C) Principal Amount of Extension or Conversion _______________________
(D) Interest rate basis _______________________
(E) Interest Period and the last day thereof _______________________
[(F) Estimated Foreign Currency Equivalent of
Extension or Conversion _______________________]*
[(G) Applicable Foreign Currency of Extended or
Converted Loan _______________________]*
[*For Foreign Currency Loans]
<PAGE> 139
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
WESTPOINT STEVENS INC.
By: __________________________
Name: ________________________
Title: _______________________
<PAGE> 140
Exhibit 7.1(c)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of WESTPOINT STEVENS INC. (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Second Amended and Restated Credit Agreement dated as of
[DATE] (as amended, modified, restated or supplemented from time to time, the
"Credit Agreement"; all of the defined terms in the Credit Agreement are
incorporated herein by reference) among the Borrower, the Banks and NationsBank,
N. A., as Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and have
been prepared in accordance with GAAP applied on a consistent basis,
subject to changes resulting from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar certification, or,
if none, the Closing Date) no Default or Event of Default has
occurred under the Credit Agreement; and
Delivered herewith are detailed calculations demonstrating compliance by
the Credit Parties with the financial covenants contained in Section 7.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
WESTPOINT STEVENS INC.
By: __________________________
Name: ________________________
Title: _______________________
<PAGE> 141
Exhibit 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of this ____ day of
________ by and between [Name of new subsidiary], a corporation organized and
existing under the laws of _______________ (the "Subsidiary"), and NATIONSBANK,
N.A., formerly known as NationsBank of North Carolina, N.A., in its capacity as
trustee (the "Trustee") under that certain Second Amended and Restated
Collateral Trust Agreement (as it may be amended, modified, extended or restated
from time to time, the "Collateral Trust Agreement"), dated as of June 9, 1998,
by and among inter alia WestPoint Stevens Inc. (the "Borrower"), each of the
subsidiaries of the Borrower listed on the signature pages thereto, the Trustee,
and the Banks. All of the defined terms in the Collateral Trust Agreement are
incorporated herein by reference.
The Subsidiary is an Additional Grantor, and, consequently, the Borrower
is required by Section 2.2 of the Collateral Trust Agreement to cause the
Subsidiary to become a party to the Collateral Trust Agreement as a Grantor, to
guaranty the Secured Debt on terms substantially similar to those set forth in
the Restated Guaranties, and by becoming a party to the Collateral Trust
Agreement as a Grantor, grant to the Trustee for itself and for the benefit of
the Secured Parties a continuing security interest in all Grantor Collateral
which it now owns or hereafter acquires.
Accordingly, the Subsidiary hereby agrees as follows with the Trustee, for
the benefit of the Secured Parties:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Collateral Trust Agreement and a "Grantor" for all purposes of the Collateral
Trust Agreement, and shall have all of the obligations of a Grantor thereunder
as if it had executed the Collateral Trust Agreement. The Subsidiary hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Collateral Trust Agreement, including
without limitation (i) all of the representations and warranties of the Grantors
set forth therein, (ii) all of the affirmative and negative covenants set forth
therein and (iii) all of the other undertakings and waivers by Grantors set
forth therein.
2. Without limiting the generality of the foregoing section 1, as
collateral security for the prompt and complete payment and performance when due
of all of the Secured Debt, the Subsidiary does hereby pledge, assign and
transfer unto the Trustee for itself and for the ratable benefit of the Secured
Parties, and does hereby grant to the Trustee for itself and the ratable benefit
of the Secured Parties, a continuing security interest of first priority, in all
of the right, title and interest of the Subsidiary in the Grantor Collateral,
subject as to priority only to Liens permitted by the Restated Credit Agreement
which, pursuant to applicable law, are prior in right to the Lien granted
hereby. The Subsidiary has executed contemporaneously herewith a Subsidiary
Guaranty in favor of the Trustee for the benefit of the Banks.
<PAGE> 142
3. The Subsidiary hereby represents and warrants to the Agent that:
(i) The Subsidiary's chief executive office and chief place of
business are (and for the prior four months have been) located at the
locations set forth on Schedule 1 attached hereto and the Subsidiary keeps
its books and records at such locations.
(ii) The type of Collateral owned by the Subsidiary and the location
of all Collateral owned by the Subsidiary is as shown on Schedule 2
attached hereto.
(iii) The Subsidiary's legal name is as shown in this Agreement and
the Subsidiary has not in the past four months changed its name, been
party to a merger, consolidation or other change in structure or used any
tradename except as set forth in Schedule 3 attached hereto.
(iv) The patents and trademarks listed on Schedule 4 attached hereto
constitute all of the registrations and applications for the patents and
trademarks owned by the Subsidiary.
4. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Pledge Agreement executed by the Borrower, and shall have all the obligations of
a "Pledgor" thereunder as if it had executed the Pledge Agreement. The
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all the terms, provisions and conditions contained in the Pledge Agreement.
Without limiting the generality of the foregoing terms of this paragraph 4, the
Subsidiary hereby pledges and assigns to the Agent, for the benefit of the
Banks, and grants to the Agent, for the benefit of the Banks, a continuing
security interest in any and all right, title and interest of the Subsidiary in
and to Pledged Shares (as such term is defined in Section 2 of the Pledge
Agreement) listed on Schedule 5 attached hereto and the other Pledged Collateral
(as such term is defined in Section 2 of the Pledge Agreement).
5. The address of the Subsidiary for purposes of all notices and other
communications is ____________________, ____________________________, Attention
of ______________ (Facsimile No. ____________).
6. The Subsidiary hereby waives acceptance by the Agent and the Banks of
the guaranty by the Subsidiary upon the execution of this Agreement by the
Subsidiary.
7. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
8. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
<PAGE> 143
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to be
duly executed by its authorized officers, and the Agent, for the benefit of the
Banks, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.
[SUBSIDIARY]
By: __________________________
Name: ________________________
Title: _______________________
Acknowledged and accepted:
NATIONSBANK, N. A., as Agent
By: __________________________
Name: ________________________
Title: _______________________
<PAGE> 144
Exhibit 11.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Second Amended and Restated Credit Agreement
dated as of [DATE], as amended and modified from time to time thereafter (the
"Credit Agreement") among inter alia WESTPOINT STEVENS INC., the Banks party
thereto and NationsBank, N.A., as Agent. Terms defined in the Credit Agreement
are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement and the
other Credit Documents as of the date hereof equal to the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Credit Agreement and the other Credit Documents. After giving effect to such
sale and assignment, the Assignee's Commitment and the amount of the Loans owing
to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Documents or any other instrument or document furnished
pursuant thereto; and (iv) attaches the Notes held by the Assignor and requests
that the Agent exchange such Notes for new Notes payable to the order of the
Assignee in an amount equal to the Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Commitment retained by the
Assignor, if any, as specified on Schedule 1.
<PAGE> 145
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Bank; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 3.11.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
<PAGE> 146
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
____________________, as Assignor
By: __________________________
Name: ________________________
Title: _______________________
_____________________, as Assignee
By: __________________________
Name: ________________________
Title: _______________________
Notice address of Assignee:
[Assignee]
______________________________
______________________________
Attn: ________________________
Telephone: (___) __________
Telecopy: (___) __________
CONSENTED TO:
NATIONSBANK, N.A., *
as Agent
By: __________________________
Name: ________________________
Title: _______________________
WESTPOINT STEVENS INC.
By: __________________________
Name: ________________________
Title: _______________________
- ----------
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
<PAGE> 147
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment* :
(e) Revolving Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(f) Revolving Commitment Percentage of Assignee after
giving effect to this Assignment and Acceptance as of
the Effective Date (set forth to at least 8 decimals) %
(g) Revolving Commitment Percentage of Assignor after
giving effect to this Assignment and Acceptance as of
the Effective Date (set forth to at least 8 decimals) %
(h) Revolving Committed Amount as of Effective Date $___________
(i) Dollar Amount of Assignor's Revolving Commitment
Percentage as of the Effective Date (the amount set
forth in (h) multiplied by the percentage set forth in (g)) $___________
(j) Dollar Amount of Assignee's Revolving Commitment
Percentage as of the Effective Date (the amount set
forth in (h) multiplied by the percentage set forth in (f)) $___________
- ----------
* This date should be no earlier than five Business Days after delivery of this
Assignment and Acceptance to the Agent.
<PAGE> 1
EXHIBIT 10.60
June 30, 1998
WESTPOINT STEVENS INC.
507 West Tenth Street
West Point, Georgia 31833
Attention: Mr. Morgan M. Schuessler
Re: Revision of Definition of "Maximum Restricted Payment Amount"
Dear Sirs:
Reference is made to that certain Second Amended and Restated Credit Agreement,
dated as of June 9, 1998, among WestPoint Stevens Inc. ("Borrower"), WestPoint
Stevens (UK) Limited and WestPoint Stevens (Europe) Limited (the "Foreign
Borrowers"), the various banks and lending institutions party thereto (the
"Banks"), and NationsBank, N.A. as agent (the "Agent") for the Banks (the
"Credit Agreement"). Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Credit Agreement.
By their signatures below, the Borrower, the Foreign Borrowers and the Required
Banks hereby agree that the existing definition of "Maximum Restricted Payment
Amount" in Section 1.1 of the Credit Agreement shall be amended to read in its
entirety as follows:
"Maximum Restricted Payment Amount" means the sum of (i)
$34,210,000, plus (ii) 50% of the Consolidated Net Income from and
after March 31, 1998 until any relevant measurement date, plus (iii)
the Net Cash Proceeds received by the Borrower from the exercise of
stock warrants or options by employees or former employees of the
Borrower in respect of Capital Stock of the Borrower from and after
March 31, 1998, plus (iv) the Net Cash Proceeds received by Alamac Sub
Holdings Inc. from the sale of its facility located in Whitmire, South
Carolina to the Borrower after March 31, 1998 in an amount equal to
$21,790,978.
By their signatures below, each of the Subsidiary Guarantors acknowledges and
consents to this revision in the definition of "Maximum Restricted Payment
Amount" and each Subsidiary Guarantor agrees that this revision does not operate
to reduce or discharge any of such Subsidiary's obligations under any of the
Collateral Documents.
<PAGE> 2
WestPoint Stevens Inc.
June 30, 1998
Page Two
Until this letter agreement shall have been executed by the Borrower, the
Foreign Borrowers, the Subsidiary Guarantors, and the Required Banks, it shall
not be effective in revising the definition of "Maximum Restricted Payment
Amount". Except for the revision to the definition of "Maximum Restricted
Payment Amount" effected hereby upon the execution of this letter agreement by
the Borrower, the Foreign Borrowers, the Subsidiary Guarantors, and the Required
Banks, the Credit Agreement shall remain in full force and effect.
Please execute this letter agreement and cause each of the Foreign Borrowers and
the Subsidiary Guarantors to execute this letter agreement, and return such
completed signature pages to the Agent at your earliest convenience.
Sincerely,
NATIONSBANK, N.A., in its capacity
as the Agent
By:________________________________
Title:_____________________________
ACKNOWLEDGED AND AGREED:
WESTPOINT STEVENS INC.
By:________________________________
Title:_____________________________
WESTPOINT STEVENS (UK) LIMITED
By:________________________________
Title:_____________________________
WESTPOINT STEVENS (EUROPE) LIMITED
By:________________________________
Title:_____________________________
[Signatures Continued]
2
<PAGE> 3
WestPoint Letter Agreement
June 30, 1998
WESTPOINT STEVENS STORES, INC.
By:________________________________
Title:_____________________________
J.P. STEVENS & CO., INC.
By:________________________________
Title:_____________________________
WEST POINT-PEPPERELL ENTERPRISES, INC.
By:________________________________
Title:_____________________________
J.P. STEVENS ENTERPRISES, INC.
By:________________________________
Title:_____________________________
ALAMAC HOLDINGS INC.
By:________________________________
Title:_____________________________
ALAMAC SUB HOLDINGS INC.
By:________________________________
Title:_____________________________
[Signatures Continued]
3
<PAGE> 4
WestPoint Letter Agreement
June 30, 1998
NATIONSBANK, N.A., as a Bank
By:________________________________
Title:_____________________________
THE BANK OF NEW YORK
By:________________________________
Title:_____________________________
THE FIRST NATIONAL BANK OF CHICAGO
By:________________________________
Title:_____________________________
SCOTIABANC INC.
By:________________________________
Title:_____________________________
WACHOVIA BANK, N.A.
By:________________________________
Title:_____________________________
SOCIETE GENERALE
By:________________________________
Title:_____________________________
4
<PAGE> 5
WestPoint Letter Agreement
June 30, 1998
ABN AMRO BANK, N.V.
By:________________________________
Title:_____________________________
SUNTRUST BANK, ATLANTA
By:________________________________
Title:_____________________________
By:________________________________
Title:_____________________________
FIRST UNION NATIONAL BANK
By:________________________________
Title:_____________________________
FLEET BANK, N.A.
By:________________________________
Title:_____________________________
AMSOUTH BANK
By:________________________________
Title:_____________________________
[Signatures Continued]
5
<PAGE> 6
WestPoint Letter Agreement
June 30, 1998
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By:________________________________
Title:_____________________________
By:________________________________
Title:_____________________________
6
<PAGE> 1
EXHIBIT 12.1
WESTPOINT STEVENS INC.
EXHIBIT 12-STATEMENT RE: COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three Months
Ended
March 31, Year Ended December 31,
--------------- ------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------- ------ ------ -------- ------- -------- -------
(dollars in millions, except ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated pretax income (loss) from
continuing operations.................... $18.3 $14.3 $110.2 $91.0 $(70.4) $(153.7) $(325.9)
Interest expense.............................. 25.7 23.4 102.2 94.5 93.5 94.2 90.4
Net amortization of deferred debt expense..... 1.0 1.0 3.9 3.9 3.9 13.6 28.4
Interest portion of rental expense............ 2.6 2.0 8.9 11.8 11.5 9.2 7.9
----- ----- ------ ------ ------ ------ -------
Earnings (loss).......................... $47.6 $40.7 $225.2 $201.2 $38.5 $(36.7) $(199.2)
===== ===== ====== ====== ====== ====== =======
Interest expense.............................. $25.7 $23.4 $102.2 $94.5 $93.5 $94.2 $90.4
Net amortization of deferred debt expense..... 1.0 1.0 3.9 3.9 3.9 13.6 28.4
Interest portion of rental expense............ 2.6 2.0 8.9 11.8 11.5 9.2 7.9
----- ----- ------ ------ ------ ------- -------
Fixed Charges............................ $29.3 $26.4 $115.0 $110.2 $108.9 $117.0 $126.7
===== ===== ====== ====== ====== ======= ========
Ratio of Earnings to Fixed Charges....... 1.6x 1.5X 2.0x 1.8x 0.4x -- --
===== ===== ====== ====== ====== ======= ========
Deficiency in earnings available to cover
fixed charges............................ -- -- -- -- $70.4 $153.7 $325.9
===== ===== ====== ====== ====== ======= ========
</TABLE>
<PAGE> 1
EXHIBIT 12.2
WESTPOINT STEVENS INC.
EXHIBIT 12-STATEMENT RE: PRO FORMA COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
PRO FORMA
------------------------------------
Twelve Months
Ended
March 31, 1998
(dollars in millions, except ratios)
<S> <C>
Consolidated pretax income from
continuing operations................ $122.0
Interest expense...................... 98.0
Net amortization of deferred debt
expense.............................. 2.6
Interest portion of rental expense.... 9.4
------
Earnings......................... $232.0
======
Interest expense...................... $ 98.0
Net amortization of deferred debt
expense.............................. 2.6
Interest portion of rental expense.... 9.4
------
Fixed Charges.................... $110.0
======
Ratio of Earnings to Fixed
Charges......................... 2.1x
======
Deficiency in earnings available to
cover fixed charges.................. --
======
</TABLE>
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related prospectus of WestPoint Stevens
Inc., for the registration of $525,000,000 7 7/8% Senior Notes due 2005 and
$475,000,000 7 7/8% Senior Notes due 2008 and to the inclusion of our report
dated February 5, 1998 with respect to the consolidated financial statements of
WestPoint Stevens Inc. and to the incorporation by reference therein of our
report dated February 5, 1998 with respect to the consolidated financial
statements and schedule of WestPoint Stevens Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 1997, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Columbus, Georgia
July 24, 1998
<PAGE> 1
EXHIBIT 25(a)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-----------------------
WESTPOINT STEVENS INC.
(Exact name of obligor as specified in its charter)
Delaware 36-3498354
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
507 West Tenth Street
West Point, Georgia 31833
(Address of principal executive offices) (Zip code)
-----------------------
7-7/8% Senior Notes due 2005
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 15th day of July, 1998.
THE BANK OF NEW YORK
By: /s/ MARY JANE SCHMALZEL
--------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
-4-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 15th day of July, 1998.
THE BANK OF NEW YORK
By: /s/ Mary Jane Schmalzel
--------------------------
Name: Mary Jane Schmalzel
Title: Vice President
<PAGE> 6
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1998, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances .......... 1,138,362
Securities:
Held-to-maturity securities ........ 1,062,074
Available-for-sale securities ...... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................36,538,242
LESS: Allowance for loan and
lease losses ..............631,725
LESS: Allocated transfer risk
reserve..........................0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts ...... 2,145,149
Premises and fixed assets (including
capitalized leases) ................ 663,928
Other real estate owned .............. 10,895
Investments in unconsolidated
subsidiaries and associated
companies .......................... 237,991
Customers' liability to this bank on
acceptances outstanding ............ 992,747
Intangible assets .................... 1,072,517
Other assets ......................... 1,643,173
-----------
Total assets ......................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices ................ $24,849,054
Noninterest-bearing ......10,011,422
Interest-bearing .........14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,319,002
Noninterest-bearing .........707,820
Interest-bearing .........14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase. 1,906,066
Demand notes issued to the U.S.
Treasury ........................... 215,985
Trading liabilities .................. 1,591,288
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,991,119
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding .............. 998,145
Subordinated notes and debentures .... 1,314,000
Other liabilities .................... 2,421,281
-----------
Total liabilities .................... 50,631,514
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 40,198
Cumulative foreign currency transla-
tion adjustments ................... (36,129)
-----------
Total equity capital ................. 5,198,722
-----------
Total liabilities and equity
capital ............................ $55,830,236
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi }
Alan R. Griffith } Directors
J. Carter Bacot }
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 25(b)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
-----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-----------------------
WESTPOINT STEVENS INC.
(Exact name of obligor as specified in its charter)
Delaware 36-3498354
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
507 West Tenth Street
West Point, Georgia 31833
(Address of principal executive offices) (Zip code)
-----------------------
7-7/8% Senior Notes due 2005
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 15th day of July, 1998.
THE BANK OF NEW YORK
By: /s/ MARY JANE SCHMALZEL
--------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
-4-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 15th day of July, 1998.
THE BANK OF NEW YORK
By: /s/ MARY JANE SCHMALZEL
--------------------------
Name: MARY JANE SCHMALZEL
Title: VICE PRESIDENT
-4-
<PAGE> 6
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1998, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances .......... 1,138,362
Securities:
Held-to-maturity securities ........ 1,062,074
Available-for-sale securities ...... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................36,538,242
LESS: Allowance for loan and
lease losses ..............631,725
LESS: Allocated transfer risk
reserve..........................0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts ...... 2,145,149
Premises and fixed assets (including
capitalized leases) ................ 663,928
Other real estate owned .............. 10,895
Investments in unconsolidated
subsidiaries and associated
companies .......................... 237,991
Customers' liability to this bank on
acceptances outstanding ............ 992,747
Intangible assets .................... 1,072,517
Other assets ......................... 1,643,173
-----------
Total assets ......................... $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices ................ $24,849,054
Noninterest-bearing ......10,011,422
Interest-bearing .........14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 15,319,002
Noninterest-bearing .........707,820
Interest-bearing .........14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase. 1,906,066
Demand notes issued to the U.S.
Treasury ........................... 215,985
Trading liabilities .................. 1,591,288
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,991,119
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding .............. 998,145
Subordinated notes and debentures .... 1,314,000
Other liabilities .................... 2,421,281
-----------
Total liabilities .................... 50,631,514
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 40,198
Cumulative foreign currency transla-
tion adjustments ................... ( 36,129)
------------
Total equity capital ................. 5,198,722
------------
Total liabilities and equity
capital ............................ $55,830,236
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi
Alan R. Griffith Directors
J. Carter Bacot
- --------------------------------------------------------------------------------
<PAGE> 1
LETTER OF TRANSMITTAL
WESTPOINT STEVENS INC.
TO TENDER FOR EXCHANGE 7 7/8% SENIOR NOTES DUE 2005
AND 7 7/8% SENIOR NOTES DUE 2008
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998 UNLESS EXTENDED (THE "EXPIRATION DATE").
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
IF YOU DESIRE TO ACCEPT THE EXCHANGE OFFER, THIS LETTER OF TRANSMITTAL
SHOULD BE COMPLETED, SIGNED, AND SUBMITTED TO THE EXCHANGE AGENT:
THE BANK OF NEW YORK
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery:
THE BANK OF NEW YORK THE BANK OF NEW YORK
101 Barclay Street, (7 East) 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Diana Torres Ground Level
Reorganization Section New York, New York 10286
Attention: Diana Torres
Reorganization Section
By Facsimile for Eligible Institutions:
(212) 815-6339
Confirmed by Telephone:
(212) 815-5789
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY. FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT.
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1998 (as it may be supplemented and amended from time to time, the
"Prospectus") of WestPoint Stevens Inc., a Delaware corporation ("Company"), and
this Letter of Transmittal (the "Letter of Transmittal"), that together
constitute the Company's offer (the "Exchange Offer") to exchange (i) $1,000
principal amount of its 7 7/8% Senior Notes due 2005 (the "Senior Notes due
2005"), registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Statement of which this prospectus is a part,
for each $1,000 principal amount of its outstanding 7 7/8% Senior Notes due 2005
(the "Old Senior Notes due 2005"), of which $525,000,000 principal amount is
outstanding and (ii) $1,000 principal amount of its 7 7/8% Senior Notes due 2008
(the "Senior Notes due 2008" and together with the Senior Notes due 2005, the
"Exchange Securities"), registered under the Securities Act, pursuant to a
Registration Statement of which this prospectus is a part, for each $1,000
principal amount of its outstanding 7 7/8% Senior Notes due 2008 (the "Old
Senior Notes due 2008" and together with the Old Senior Notes due 2005, the "Old
Securities"), of which $475,000,000 principal amount is outstanding,
respectively. The Old Securities and the Exchange Securities are referred to
herein collectively as the "Securities." Capitalized terms used but not defined
herein have the meanings ascribed to them in the Prospectus.
The undersigned hereby tenders the Securities described in Box 1 below (the
"Tendered Securities") pursuant to the terms and conditions described in the
Prospectus and this Letter of Transmittal. The undersigned is the registered
owner of all the Tendered Securities and the undersigned represents that it has
<PAGE> 2
received from each beneficial owner of the Tendered Securities ("Beneficial
Owners") a duly completed and executed form of "Instruction to Registered Holder
and/or Book-Entry Transfer Facility Participant from Beneficial Owner"
accompanying this Letter of Transmittal, instructing the undersigned to take the
action described in this Letter of Transmittal.
Subject to, and effective upon, the acceptance for exchange of the Tendered
Securities, the undersigned hereby exchanges, assigns and transfers to, or upon
the order of, the Company all right, title, and interest in, to and under the
Tendered Securities.
Please issue the Exchange Securities exchanged for Tendered Securities in
the name(s) of the undersigned. Similarly, unless otherwise indicated under
"SPECIAL DELIVERY INSTRUCTIONS" below (see Box 3), please send or cause to be
sent the certificates for the Exchange Securities (and accompanying documents,
as appropriate) to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned with
respect to the Tendered Securities, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver the Tendered Securities to the Company or cause ownership of the
Tendered Securities to be transferred to, or upon the order of, the Company, on
the books of the registrar for the Securities and deliver all accompanying
evidences of transfer and authenticity to, or upon the order of, the Company
upon receipt by the Exchange Agent, as the undersigned's agent, of the Exchange
Securities to which the undersigned is entitled upon acceptance by the Company
of the Tendered Securities pursuant to the Exchange Offer, and (ii) receive all
benefits and otherwise exercise all rights of beneficial ownership of the
Tendered Securities, all in accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Securities pursuant to the
procedures described under the caption "The Exchange Offer" in the Prospectus
and in the instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Exchange Offer, subject only to withdrawal of such tenders on the terms set
forth in the Prospectus under the caption "The Exchange Offer -- Withdrawal of
Tenders." All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and any Beneficial Owner(s), and
every obligation of the undersigned or any Beneficial Owner(s) hereunder shall
be binding upon the heirs, representatives, successors, and assigns of the
undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign, and transfer the Tendered
Securities and that the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances, and
adverse claims when the Tendered Securities are acquired by the Company as
contemplated herein. The undersigned and each Beneficial Owner will, upon
request, execute and deliver any additional documents reasonably requested by
the Company or the Exchange Agent as necessary or desirable to complete and give
effect to the transactions contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that (i) the Exchange Securities to be acquired by the undersigned and
any Beneficial Owner(s) in connection with the Exchange Offer are being acquired
by the undersigned and any Beneficial Owner(s) in the ordinary course of
business of the undersigned and any Beneficial Owner(s), (ii) the undersigned
and each Beneficial Owner are not participating, do not intend to participate,
and have no arrangement or understanding with any person to participate, in the
distribution of the Exchange Securities, (iii) except as otherwise disclosed in
writing herewith, neither the undersigned nor any Beneficial Owner is an
"affiliate," as defined in Rule 405 under the Securities Act, of the Company,
and (iv) the undersigned and each Beneficial Owner acknowledge and agree that
any person participating in the Exchange Offer with the intention or for the
purpose of distributing the Exchange Securities must comply with the
registration and prospectus delivery requirements of the Securities Act of 1933,
as amended (together with the rules and regulations promulgated thereunder, the
"Securities
2
<PAGE> 3
Act") in connection with a secondary resale of the Exchange Securities acquired
by such person and cannot rely on the position of the Staff of the Securities
and Exchange Commission (the "Commission") set forth in the no-action letters
that are discussed in the section of the Prospectus entitled "The Exchange
Offer." In addition, by accepting the Exchange Offer, the undersigned hereby (i)
represents and warrants that, if the undersigned or any Beneficial Owner of the
Securities is a Participating Broker-Dealer, such Participating Broker-Dealer
acquired the Securities for its own account as a result of market-making
activities or other trading activities and has not entered into any arrangement
or understanding with the Company or any "affiliate" of the Company (within the
meaning of Rule 405 under the Securities Act) to distribute the Exchange
Securities to be received in the Exchange Offer, and (ii) acknowledges that, by
receiving Exchange Securities for its own account in exchange for Old
Securities, where such Old Securities were acquired as a result of market-making
activities or other trading activities, such Participating Broker-Dealer will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities; however, by so
acknowledging and delivering a prospectus, the undersigned will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
Holders of Old Securities that are tendering by book-entry transfer to the
Exchange Agent's account at DTC can execute the tender through the DTC Automated
Tender Offer Program ("ATOP"), for which the transaction will be eligible. DTC
participants that are accepting the Exchange Offer must transmit their
acceptance to DTC, which will verify the acceptance and execute a book-entry
delivery to the Exchange Agent's DTC account. DTC will then send an Agent's
Message to the Exchange Agent for its acceptance. DTC participants may also
accept the Exchange Offer prior to the Expiration Date by submitting a Notice of
Guaranteed Delivery through ATOP.
[ ] CHECK HERE IF TENDERED SECURITIES ARE BEING DELIVERED HEREWITH.
[ ] CHECK HERE IF TENDERED SECURITIES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND
COMPLETE "USE OF GUARANTEED DELIVERY" BELOW (Box 4).
[ ] CHECK HERE IF TENDERED SECURITIES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE "USE OF BOOK-ENTRY TRANSFER"
BELOW (Box 5).
[ ] CHECK HERE IF YOU ARE A PARTICIPATING BROKER-DEALER WHO ACQUIRED THE OLD
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER
TRADING ACTIVITIES AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO (Box 7).
3
<PAGE> 4
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
BOX 1
DESCRIPTION OF SECURITIES TENDERED
(Attach additional signed pages, if necessary)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED SECURITY HOLDER(S), CERTIFICATE AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
EXACTLY AS NAME(S) APPEAR(S) ON NOTE CERTIFICATE(S) NUMBER(S) OF AMOUNT REPRESENTED AMOUNT
(PLEASE FILL IN, IF BLANK) SECURITIES* BY CERTIFICATE(S) TENDERED**
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Total
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by persons tendering by book-entry transfer.
** The minimum permitted tender is $1,000 in principal amount of Securities. All
other tenders must be in integral multiples of $1,000 of principal amount.
Unless otherwise indicated in this column, the principal amount of all
Certificates identified in this Box 1 or delivered to the Exchange Agent
herewith shall be deemed tendered. See Instruction 4.
BOX 2
BENEFICIAL OWNER(S)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
STATE OF PRINCIPAL RESIDENCE OF EACH TITLE AND PRINCIPAL AMOUNT OF TENDERED
BENEFICIAL OWNER OF TENDERED SECURITIES SECURITIES HELD FOR ACCOUNT OF BENEFICIAL OWNER
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 5
BOX 3 BOX 4
- ---------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
TO BE COMPLETED ONLY IF EXCHANGE SECURITIES EXCHANGED FOR OLD SECURITIES
AND UNTENDERED SECURITIES ARE TO BE SENT TO SOMEONE OTHER THAN THE
UNDERSIGNED, OR TO THE UNDERSIGNED AT AN ADDRESS OTHER THAN THAT SHOWN
ABOVE
Mail Exchange Securities and any untendered Old Securities to:
Name(s):
--------------------------------------------
(PLEASE PRINT)
Address:
---------------------------------------------
------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NO.
- ------------------------------------------------------
- ------------------------------------------------------
USE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF SECURITIES ARE BEING TENDERED BY MEANS OF A NOTICE
OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
--------------------------------------------
Window Ticket No. (if any):
-------------------------
Date of Execution of Notice of Guaranteed Delivery:
------------------------------------------------------
Name of Institution that Guaranteed Delivery:
------------------------------------------------------
If Delivered by Book-Entry Transfer:
Account Number with DTC:
------------------
Transaction Code Number:
--------------------
- ------------------------------------------------------
- ------------------------------------------------------
BOX 5
USE OF BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF DELIVERY OF TENDERED SECURITIES IS TO BE MADE BY
BOOK-ENTRY TRANSFER.
Name of Tendering Institution:
---------------------------------------------
Account Number:
------------------------------------------------------------
Transaction Code Number:
---------------------------------------------------
5
<PAGE> 6
BOX 6
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
X
------------------------------------------------------------------------------
X
------------------------------------------------------------------------------
(SIGNATURE OF REGISTERED HOLDER(S) OR AUTHORIZED SIGNATORY)
Note: The above lines must be signed by the registered holder(s) of Securities
as their name(s) appear(s) on the Securities or by person(s) authorized to
become registered holder(s) (evidence of such authorization must be transmitted
with this Letter of Transmittal). If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer, or other person acting in a
fiduciary or representative capacity, such person must set forth his or her full
title below. See Instruction 5.
Name(s):
------------------------------------------------------------------------
Capacity:
-----------------------------------------------------------------------
Street Address:
-----------------------------------------------------------------
-----------------------------------------------------------------
(ZIP CODE)
Area Code and Telephone Number:
-------------------------------------------------
Tax Identification or Social Security Number:
-----------------------------------
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 5)
Authorized Signature
------------------------------------------------------------
X
-------------------------------------------------------------------------------
Name:
---------------------------------------------------------------------------
(PLEASE PRINT)
Title:
--------------------------------------------------------------------------
Name of Firm:
-------------------------------------------------------------------
(MUST BE AN ELIGIBLE INSTITUTION AS DEFINED IN INSTRUCTION 2)
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
(ZIP CODE)
Area Code and Telephone Number:
-------------------------------------------------
Dated:
---------------------------
6
<PAGE> 7
BOX 7
BROKER-DEALER STATUS
[ ] Check this box if the Beneficial Owner of the Securities is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Securities
for its own account as a result of market-making activities or other trading
activities. If this box is checked, regardless of whether you are tendering
by book-entry transfer through ATOP, an executed copy of this Letter of
Transmittal must be received within three NYSE trading days after the
Expiration Date by WestPoint Stevens Inc., attention Christopher N. Zodrow,
facsimile (706) 645-4396.
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
EXCHANGE AGENT'S NAME: THE BANK OF NEW YORK
- ----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX
FORM W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING ---------------------------------
DEPARTMENT OF THE TREASURY BELOW Social Security Number
INTERNAL REVENUE SERVICE or
---------------------------------
Employer Identification Number
---------------------------------------------------------------------------------
PAYER'S REQUEST FOR PART 2 -- CERTIFICATION -- Under penalties of perjury, I certify that:
TAXPAYER IDENTIFICATION (1) The number shown on this form is my correct Taxpayer Identification Number (or
NUMBER ("TIN") I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding either because I have not been notified
by the Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of failure to report all interest or dividends, or the IRS
has notified me that I am no longer subject to backup withholding.
---------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross PART 3 --
out item (2) above if you have been notified Awaiting TIN [ ]
by the IRS that you are currently subject to
backup withholding because of underreporting
interest or dividends on your tax return.
However, if after being notified by the IRS
that you were subject to backup withholding
you received another notification from the
IRS that you are no longer subject to backup
withholding, do not cross out such item (2).
- ----------------------------------------------------------------------------------------------------------------------
Signature ________________________________________________________________________ Date ________________________
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administrative Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all reportable payments made to me will be withheld, but that such amounts
will be refunded to me if I then provide a Taxpayer Identification Number within
60 days.
__________________________________________________ ___________________, 1998
Signature Date
7
<PAGE> 8
WESTPOINT STEVENS INC.
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Securities. This Letter of
Transmittal is to be completed by registered holders of Securities if
certificates representing such Securities are to be forwarded herewith pursuant
to the procedures set forth in the Prospectus under "The Exchange
Offer -- Procedures for Tendering," unless delivery of such certificates is to
be made by book-entry transfer to the Exchange Agent's account maintained by DTC
through ATOP. For a holder to properly tender Securities pursuant to the
Exchange Offer, a properly completed and duly executed copy of this Letter of
Transmittal, including Substitute Form W-9, and any other documents required by
this Letter of Transmittal must be received by the Exchange Agent at its address
set forth herein, and either (i) certificates for Tendered Securities must be
received by the Exchange Agent at its address set forth herein, or (ii) such
Tendered Securities must be transferred pursuant to the procedures for
book-entry transfer described in the Prospectus under the caption "The Exchange
Offer -- Procedures for Tendering" (and a confirmation of such transfer received
by the Exchange Agent), in each case prior to 5:00 p.m., New York City time, on
the Expiration Date. The method of delivery of certificates for Tendered
Securities, this Letter of Transmittal and all other required documents to the
Exchange Agent is at the election and risk of the tendering holder and the
delivery will be deemed made only when actually received by the Exchange Agent.
If delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. Instead of delivery by mail, it is recommended that the
holder use an overnight or hand delivery service. In all cases, sufficient time
should be allowed to assure timely delivery. No Letter of Transmittal or
Tendered Securities should be sent to the Company. Neither the Company nor the
Exchange Agent is under any obligation to notify any tendering holder of the
Company's acceptance of Tendered Securities prior to the closing of the Exchange
Offer.
2. Guaranteed Delivery Procedures. If a registered holder desires to
tender Securities pursuant to the Exchange Offer and (a) certificates
representing such tendered Securities are not immediately available, (b) time
will not permit such holder's Letter of Transmittal, certificates representing
such Tendered Securities and all other required documents to reach the Exchange
Agent on or prior to the Expiration Date, or (c) the procedures for book-entry
transfer cannot be completed on or prior to the Expiration Date, such holder may
nevertheless tender such Tendered Securities with the effect that such tender
will be deemed to have been received on or prior to the Expiration Date if the
procedures set forth below and in the Prospectus under "The Exchange
Offer -- Guaranteed Delivery Procedures" (including the completion of Box 4
above) are followed. Pursuant to such procedures, (i) the tender must be made by
or through an Eligible Institution (as defined), (ii) a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form provided
by the Company herewith, or an Agent's Message with respect to a guaranteed
delivery that is accepted by the Company, must be received by the Exchange Agent
on or prior to the Expiration Date, and (iii) the certificates for the Tendered
Securities, in proper form for transfer (or a Book-Entry Confirmation of the
transfer of such Tendered Securities to the Exchange Agent's account at DTC as
described in the Prospectus), together with a Letter of Transmittal (or manually
signed facsimile thereof) properly completed and duly executed, with any
required signature guarantees and any other documents required by the Letter of
Transmittal or a properly transmitted Agent's Message, must be received by the
Exchange Agent within three New York Stock Exchange trading days after the date
of execution of the Notice of Guaranteed Delivery. Any holder who wishes to
tender Securities pursuant to the guaranteed delivery procedures described above
must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery
relating to such tendered Securities prior to 5:00 p.m., New York City time, on
the Expiration Date. Failure to complete the guaranteed delivery procedures
outlined above will not, of itself, affect the validity or effect a revocation
of any Letter of Transmittal form properly completed and executed by an Eligible
Holder who attempted to use the guaranteed delivery process.
3. Beneficial Owner Instructions to Registered Holders. Only a holder in
whose name Tendered Securities are registered on the books of the registrar (or
the legal representative or attorney-in-fact of such
8
<PAGE> 9
registered holder) may execute and deliver this Letter of Transmittal. Any
Beneficial Owner of Tendered Securities who is not the registered holder must
arrange promptly with the registered holder to execute and deliver this Letter
of Transmittal on his or her behalf through the execution and delivery to the
registered holder of the "Instructions to Registered Holder and/or Book-Entry
Transfer Facility Participant from Beneficial Owner" form accompanying this
Letter of Transmittal.
4. Partial Tenders. Tenders of Securities will be accepted only in
integral multiples of $1,000 in principal amount. If less than the entire
principal amount of Securities held by the holder is tendered, the tendering
holder should fill in the principal amount tendered in the column labeled
"Aggregate Principal Amount Tendered" of the box entitled "Description of
Securities Tendered" (see Box 1) above. The entire principal amount of
Securities delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If the entire principal amount of all Securities
held by the holder is not tendered, then Securities for the principal amount of
Securities not tendered and Exchange Securities issued in exchange for any
Securities tendered and accepted will be sent to the holder at his or her
registered address, unless a different address is provided in the appropriate
box on this Letter of Transmittal, as soon as practicable following the
Expiration Date,
5. Signatures on the Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures. If this Letter of Transmittal is signed by the
registered holder(s) of the Tendered Securities, the signature must correspond
with the name(s) as written on the face of the Tendered Securities without
alteration, enlargement or any change whatsoever.
If any of the Tendered Securities are owned of record by two joint owners,
all such owners must sign this Letter of Transmittal. If any Tendered Securities
are held in different names, it will be necessary to complete, sign and submit
as many separate copies of the Letter of Transmittal as there are different
names in which Tendered Securities are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Securities, and Exchange Securities issued in exchange therefor are to
be issued (and any untendered principal amount of Securities is to be reissued)
in the name of the registered holder(s), then such registered holder(s) need not
and should not endorse any Tendered Securities, nor provide a separate bond
power. In any other case, such registered holder(s) must either properly endorse
the Tendered Securities or a properly completed separate bond power with this
Letter of Transmittal, with the signature(s) on the endorsement or bond power
guaranteed by a Medallion Signature Guarantor (as defined below).
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Tendered Securities, such Tendered Securities must
be endorsed or accompanied by appropriate bond powers, in each case, signed as
the name(s) of the registered holder(s) appear(s) on the Tendered Securities,
with the signature(s) on the endorsement or bond power guaranteed by a Medallion
Signature Guarantor.
If this Letter of Transmittal or any Tendered Securities or bond powers are
signed by trustees, executors, administrators, guardians, attorney-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
he submitted with this Letter of Transmittal.
Signatures on this Letter of Transmittal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program (each a "Medallion Signature Guarantor"), unless the Tendered Securities
are tendered (i) by a registered holder of Tendered Securities (or by a
participant in DTC whose name appears on a security position listing as the
owner of such Tendered Securities) who has not completed Box 3 ("Special
Delivery Instructions") on this Letter of Transmittal, or (ii) for the account
of a member firm of a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc. ("NASD") or a commercial bank
or trust company having an office or correspondent in the United States (each of
the foregoing being referred to as an "Eligible Institution"). If the Tendered
Securities are registered in the name of a person other than the signor of the
Letter of Transmittal or if Securities not
9
<PAGE> 10
tendered are to be returned to a person other than the registered holder, then
the Signature on this Letter of Transmittal accompanying the Tendered Securities
must be guaranteed by a Medallion Signature Guarantor as described above.
Beneficial owners whose Securities are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee if they desire to tender
such Notes.
6. Special Delivery Instructions. Tendering holders should indicate in
Box 3 the name and address to which the Exchange Securities and/or substitute
Securities for principal amounts not tendered or not accepted for exchange are
to be sent, if different from the name and address of the person signing this
Letter of Transmittal. In the case of issuance in a different name, the taxpayer
identification or social security number of the person must also be indicated.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Tendered Securities pursuant to the Exchange
Offer. If, however, a transfer tax is imposed for any reason other than the
transfer and exchange of Tendered Securities pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or on any other person) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with this Letter of Transmittal, the amount of such transfer taxes
will be billed directly to such tendering holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Tendered Securities listed in this
Letter of Transmittal.
8. Tax Identification Number. Federal income tax law requires that the
holder(s) of any Tendered Securities which are accepted for exchange must
provide the Exchange Agent (as payor) with its correct taxpayer identification
number ("TIN"), which, in the case of a holder who is an individual, is his or
her social security number. If the Exchange Agent is not provided with the
correct TIN, the holder may be subject to backup withholding and a $50 penalty
imposed by the Internal Revenue Service. (If withholding results in an
over-payment of taxes, a refund may be obtained.) Certain holders (including,
among others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional instructions.
To prevent backup withholding, each holder of Tendered Securities must
provide such holder's correct TIN by completing the Substitute Form W-9 set
forth herein, certifying that the TIN provided is correct (or that such holder
is awaiting a TIN), and that (i) the holder has not been notified by the
Internal Revenue Service that such holder is subject to backup withholding as a
result of failure to report all interest or dividends or (ii) if previously so
notified, the Internal Revenue Service has notified the holder that such holder
is no longer subject to backup withholding. If the Tendered Securities are
registered in more than one name or are not in the name of the actual owner,
consult the "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for information on which TIN to report.
The Company reserves the right in its sole discretion to take whatever
steps are necessary to comply with the Company's obligation regarding backup
withholding.
9. Validity of Tenders. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of Tendered
Securities will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the right to
reject any and all Securities not validly tendered or any Securities the
Company's acceptance of which would, in the opinion of the Company or its
counsel, be unlawful. The Company also reserves the right to waive any
conditions of the Exchange Offer or defects or irregularities in tenders of
Securities as to any ineligibility of any holder who seeks to tender Securities
in the Exchange Offer. The interpretation of the terms and conditions of the
Exchange Offer (including this Letter of Transmittal and the instructions
hereto) by the Company shall be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of Securities must be
cured within such time as the Company shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give notification
of defects or irregularities with respect to tenders of Securities, nor shall
any of them incur any liability for failure to give such
10
<PAGE> 11
notification. Tenders of Securities will not be deemed to have been made until
such defects or irregularities have been cured or waived. Any Securities
received by the Exchange Agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned by
the Exchange Agent to the tendering holders, unless otherwise provided in this
Letter of Transmittal, as soon as practicable following the Expiration Date.
10. Waiver of Conditions. The Company reserves the absolute right to
amend, waive or modify any of the conditions in the Exchange Offer in the case
of any Tendered Securities.
11. No Conditional Tender. No alternative, conditional, irregular, or
contingent tender of Securities or transmittal of this Letter of Transmittal
will be accepted.
12. Mutilated, Lost, Stolen or Destroyed Securities. Any tendering holder
whose Securities have been mutilated, lost, stolen or destroyed should contact
the Exchange Agent at the address indicated herein for further instructions.
13. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address
indicated herein. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
14. Acceptance of Tendered Securities and Issuance of Exchange Securities;
Return of Securities. Subject to the terms and conditions of the Exchange Offer,
the Company will accept for exchange all validly tendered Securities as soon as
practicable after the Expiration Date and will issue Exchange Securities
therefor as soon as practicable thereafter. For purposes of the Exchange Offer,
the Company shall be deemed to have accepted Tendered Securities when, as and if
the Company has given written or oral notice (immediately followed in writing)
thereof to the Exchange Agent. If any Tendered Securities are not exchanged
pursuant to the Exchange Offer for any reason, such unexchanged Securities will
be returned, without expense, to the undersigned at the address shown in Box 1
or at a different address as may be indicated herein under "Special Delivery
Instructions" (Box 3).
15. Withdrawal. Tenders may be withdrawn only pursuant to the procedures
set forth in the Prospectus under the caption "The Exchange Offer -- Withdrawal
of Tenders."
11
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
IN RESPECT OF
7 7/8% SENIOR NOTES DUE 2005
AND 7 7/8% SENIOR NOTES DUE 2008
OF
WESTPOINT STEVENS INC.
PURSUANT TO THE PROSPECTUS DATED , 1998
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED ("THE EXPIRATION DATE").
As set forth in the Prospectus dated , 1998 (as it may be
supplemented and amended from time to time, the "Prospectus") of WestPoint
Stevens Inc. (the "Company") under "The Exchange Offer -- Guaranteed Delivery
Procedures," and in the Instructions to the related Letter of Transmittal (the
"Letter of Transmittal"), this form, or one substantially equivalent hereto, or
an Agent's Message relating to the guaranteed delivery procedures, must be used
to accept the Company's offer (the "Exchange Offer") to exchange (i) any and all
of its outstanding 7 7/8% Senior Notes due 2005 (the "Old Senior Notes due 2005
Notes"), for new 7 7/8% Senior Notes due 2005 (the "New Senior Notes due 2005")
and (ii) any and all of its outstanding 7 7/8% Senior Notes due 2008 (the "Old
Senior Notes due 2008" and together with the Old Senior Notes due 2005, the "Old
Securities"), for new 7 7/8% Senior Notes due 2008 (the "New Senior Notes due
2008" and together with the New Senior Notes due 2005, the "Exchange
Securities"). The Old Securities and the Exchange Securities are referred to
herein collectively as the "Securities". If time will not permit the Letter of
Transmittal, certificates representing such Securities and other required
documents to reach the Exchange Agent, or the procedures for book-entry transfer
cannot be completed, on or prior to the Expiration Date (as defined).
This form must be delivered by an Eligible Institution (as defined herein)
by mail or hand delivery or transmitted via facsimile to the Exchange Agent as
set forth above. If a signature on the Letter of Transmittal is required to be
guaranteed by a Medallion Signature Guarantor under the instructions thereto,
such signature guarantee must appear in the applicable space provided in the
Letter of Transmittal. This form is not to be used to guarantee signatures.
Questions and requests for assistance and requests for additional copies of
the Prospectus may be directed to the Exchange Agent at the address above.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery:
THE BANK OF NEW YORK
101 Barclay Street, (7 East) THE BANK OF NEW YORK
New York, New York 10286 101 Barclay Street
Attention: Diana Torres Corporate Trust Services Window
Reorganization Section Ground Level
New York, New York 10286
Attention: Diana Torres
Reorganization Section
</TABLE>
By Facsimile for Eligible Institutions:
(212) 815-6339
Confirmed by Telephone:
(212) 815-5789
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE VALID DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tender(s) to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal (receipt of which is hereby acknowledged), the principal amount of
the Old Securities specified below pursuant to the guaranteed delivery
procedures set forth in the Prospectus under "The Exchange Offer -- Guaranteed
Delivery Procedures" and in Instruction 2 to the Letter of Transmittal. The
undersigned hereby authorizes the Exchange Agent to deliver this Notice of
Guaranteed Delivery to the Company with respect to the Old Securities tendered
pursuant to the Exchange Offer.
The undersigned understands that Old Securities will be exchanged only
after timely receipt by the Exchange Agent of (i) such Old Securities, or a
Book-Entry Confirmation, and (ii) a Letter of Transmittal (or a manually signed
facsimile thereof), including by means of an Agent's Message, of the transfer of
such Old Securities into the Exchange Agent's account at the Book-Entry Transfer
Facility, with respect to such Old Securities, properly completed and duly
executed, with any signature guarantees and any other documents required by the
Letter of Transmittal within three New York Stock Exchange, Inc. trading days
after the execution hereof. The undersigned also understands that the method of
delivery of this Notice of Guaranteed Delivery and any other required documents
to the Exchange Agent is at the election and sole risk of the holder, and the
delivery will be deemed made only when actually received by the Exchange Agent.
The undersigned understands that tenders of Old Securities will be accepted
only in principal amounts equal to $1,000 or integral multiples thereof. The
undersigned also understands that tenders of Old Securities may be withdrawn at
any time prior to the Expiration Date.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
All capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Prospectus.
2
<PAGE> 3
PLEASE SIGN AND COMPLETE
Title and Principal Amount of Securities Tendered:
----------------------------
Name(s) of Registered Holder(s):
------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Certificate No.(s) of Securities (if available):
--------------------------------
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
Area Code and Telephone No.:
----------------------------------------------------
If Securities will be delivered by book-entry transfer, provide the following
information:
Signature(s) of Registered Holder(s)
or Authorized Signatory:
--------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DTC Account No.:
----------------------------------------------------------------
Date:
---------------------------------------------------------------------------
THIS NOTICE OF GUARANTEED DELIVERY MUST BE SIGNED BY THE HOLDER(S) EXACTLY AS
THEIR NAME(S) APPEAR(S) ON CERTIFICATE(S) FOR OLD SECURITIES OR ON A SECURITY
POSITION LISTING AS THE OWNER OF OLD SECURITIES, OR BY PERSON(S) AUTHORIZED TO
BECOME HOLDER(S) BY ENDORSEMENTS AND DOCUMENTS TRANSMITTED WITH THIS NOTICE OF
GUARANTEED DELIVERY WITHOUT ALTERATION, ENLARGEMENT OR ANY CHANGE WHATSOEVER. IF
SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT,
OFFICER OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, SUCH
PERSON MUST PROVIDE THE FOLLOWING INFORMATION.
Please print name(s) and address(es)
Name(s):
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
-----------------------------------------------------------------------
Address(es):
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange,
Inc. Medallion Signature Program (each, an "Eligible Institution"), hereby (i)
represents that the above-named persons are deemed to own the Securities
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended ("Rule 14e-4"), (ii) represents that
such tender of Securities complies with Rule 14e-4 and (iii) guarantees that the
Securities tendered hereby are in proper form for transfer (pursuant to the
procedures set forth in the Prospectus under "The Exchange Offer -- Guaranteed
Delivery Procedures"), and that the Exchange Agent will receive (a) such
Securities, or a Book-Entry Confirmation of the transfer of such Securities into
the Exchange Agent's account at the Book-Entry Transfer Facility and (b) a
properly completed and duly executed Letter of Transmittal or facsimile thereof
(or Agent's message) with any required signature guarantees and any other
documents required by the Letter of Transmittal within three New York Stock
Exchange, Inc. trading days after the date of execution hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Exchange Agent and must deliver the Letter of Transmittal and
Securities to the Exchange Agent within the time period shown herein. Failure to
do so could result in a financial loss to such Eligible Institution.
Name of Firm:
-------------------------------------------------------------------
Authorized Signature:
-----------------------------------------------------------
Title:
--------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
Area Code and Telephone Number:
-------------------------------------------------
Dated:
------------------------------------ , 1998
DO NOT SEND SECURITIES WITH THIS FORM. SECURITIES SHOULD BE SENT TO THE EXCHANGE
AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL.
4
<PAGE> 1
INSTRUCTIONS TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
WESTPOINT STEVENS INC.
7 7/8% SENIOR NOTES DUE 2005
7 7/8% SENIOR NOTES DUE 2008
To Registered Holder and/or Participant of the Book-Entry Transfer
Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated
, 1998 (as the same may be amended or supplemented from time to time,
the "Prospectus") of WestPoint Stevens Inc., a Delaware corporation (the
"Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer"), Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Exchange
Offer with respect to the 7 7/8% Senior Notes due 2005 and the 7 7/8% Senior
Notes due 2008 (collectively the "Securities") held by you for the account of
the undersigned.
The aggregate face amount of the Securities held by you for the account of
the undersigned is (fill in amount):
$ of the 7 7/8% Senior Notes due 2005.
$ of the 7 7/8% Senior Notes due 2008.
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
[ ] TO TENDER the following Securities held by you for the account of the
undersigned (insert title and principal amount of Securities to be
tendered, if any): $
[ ] NOT TO TENDER any Securities held by you for the account of the
undersigned.
If the undersigned instruct you to tender the Securities held by you for
the account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature below,
hereby makes to you), the representation and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including, but not limited to, the representations that (i)
the undersigned's principal residence is in the State of (fill in
State) (ii) the undersigned is acquiring the Exchange Securities in the ordinary
course of business of the undersigned, (iii) the undersigned is not
participating, does not participate, and has no arrangement or understanding
with any person to participate in the distribution of the Exchange Securities,
(iv) the undersigned acknowledges that any person participating in the Exchange
Offer for the purpose of distributing the Exchange Securities must comply with
the registration and prospectus delivery requirements of the Securities Act of
1933, as amended (the "Act"), in connection with a secondary resale transaction
of the Exchange Securities acquired by such person and cannot rely on the
position of the Staff of the Securities and Exchange Commission set forth in
no-action letters that are discussed in the section of the Prospectus entitled
"The Exchange Offer -- Resale of the Exchange Securities," and (v) the
undersigned is not an "affiliate," as defined in Rule 405 under the Act, of the
Company; (b) to agree, on behalf of the undersigned, as set forth in the Letter
of Transmittal; and (c) to take such other action as necessary under the
Prospectus or the Letter of Transmittal to effect the valid tender of such
Securities.
- --------------------------------------------------------------------------------
<PAGE> 2
[ ] Check this box if the Beneficial Owner of the Security is a
Participating Broker-Dealer and such Participating Broker-Dealer
acquired the Securities for its own account as a result of
market-making activities or other trading activities. If this box is
checked, a copy of these Instructions must be received within three
New York Stock Exchange trading days after the Expiration Date by
WestPoint Stevens Inc., attention Christopher N. Zodrow, facsimile
(706) 645-4396.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGN HERE
Name of beneficial owner(s):
----------------------------------------------------
Signature(s):
-------------------------------------------------------------------
Name (please print):
------------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Telephone number:
---------------------------------------------------------------
Taxpayer Identification or Social Security Number:
------------------------------
Date:
---------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
<PAGE> 1
EXHIBIT 99.4
___________, 1998
EXCHANGE AGENT AGREEMENT
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street - 21st Floor
New York, New York 10286
Ladies and Gentlemen:
WestPoint Stevens Inc. (the "Company") proposes to make an offer
(the "Exchange Offer") to exchange its 7 7/8% Senior Notes due 2005 and 7 7/8%
Senior Notes due 2008 (the "Old Securities") for its 7 7/8% Senior Notes due
2005 and 7 7/8% Senior Notes due 2008 (the "New Securities"). The terms and
conditions of the Exchange Offer as currently contemplated are set forth in a
prospectus, dated ___________, 1998 (the "Prospectus"), proposed to be
distributed to all record holders of the Old Securities. The Old Securities and
the New Securities are collectively referred to herein as the "Securities".
The Company hereby appoints The Bank of New York to act as exchange
agent (the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Company on or
about _____________, 1998. The Letter of Transmittal accompanying the Prospectus
(or in the case of book entry securities, the ATOP system) is to be used by the
holders of the Old Securities to accept the Exchange Offer and contains
instructions with respect to the delivery of certificates for Old Securities
tendered in connection therewith.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
_____________, 1998 or on such later date or time to which the Company may
extend the Exchange Offer (the "Expiration Date"). Subject to the terms and
conditions set forth in the Prospectus, the Company expressly reserves the right
to extend the Exchange Offer from time to time and may extend the Exchange Offer
by giving oral (confirmed in writing) or written notice to you before 9:00 A.M.,
New York City time, on the business day following the previously scheduled
Expiration Date.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Securities not
theretofore accepted for exchange, upon the occurrence of any of the conditions
of the Exchange Offer specified in the Prospectus under the caption "The
Exchange Offer -- Certain Conditions to the Exchange
<PAGE> 2
Offer." The Company will give oral (confirmed in writing) or written notice of
any amendment, termination or nonacceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Old Securities
at The Depository Trust Company (the "Book-Entry Transfer Facility") for
purposes of the Exchange Offer within two business days after the date of the
Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of the Old
Securities by causing the Book-Entry Transfer Facility to transfer such Old
Securities into your account in accordance with the Book-Entry Transfer
Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Securities (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility) and any other documents
delivered or mailed to you by or for holders of the Old Securities to ascertain
whether: (i) the Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with instructions set forth
therein and (ii) the Old Securities have otherwise been properly tendered. In
each case where the Letter of Transmittal or any other document has been
improperly completed or executed or any of the certificates for Old Securities
are not in proper form for transfer or some other irregularity in connection
with the acceptance of the Exchange Offer exists, you will endeavor to inform
the presenters of the need for fulfillment of all requirements and to take any
other action as may be necessary or advisable to cause such irregularity to be
corrected.
4. With the approval of the President, Senior Vice President,
Executive Vice President, or any Vice President of the Company (such approval,
if given orally, to be confirmed in writing) or any other party designated by
such an officer in writing, you are authorized to waive any irregularities in
connection with any tender of Old Securities pursuant to the Exchange Offer.
5. Tenders of Old Securities may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer -- Procedures
<PAGE> 3
for Tendering Old Securities", and Old Securities shall be considered properly
tendered to you only when tendered in accordance with the procedures set forth
therein.
Notwithstanding the provisions of this paragraph 5, Old Securities
which the President, Senior Vice President, Executive Vice President, or any
Vice President of the Company shall approve as having been properly tendered
shall be considered to be properly tendered (such approval, if given orally,
shall be confirmed in writing).
6. You shall advise the Company with respect to any Old Securities
received subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Old Securities.
7. You shall accept tenders:
(a) in cases where the Old Securities are registered in two or more
names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old Securities
provided that customary transfer requirements, including any applicable transfer
taxes, are fulfilled.
You shall accept partial tenders of Old Securities where so
indicated and as permitted in the Letter of Transmittal and deliver certificates
for Old Securities to the transfer agent for split-up and return any untendered
Old Securities to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will notify you (such notice, if given orally, to be
confirmed in writing) of its acceptance, promptly after the Expiration Date, of
all Old Securities properly tendered and you, on behalf of the Company, will
exchange such Old Securities for New Securities and cause such Old Securities to
be cancelled. Delivery of New Securities will be made on behalf of the Company
by you at the rate of $1,000 principal amount of New Securities for each $1,000
principal amount of the corresponding series of Old Securities tendered promptly
after notice (such notice if given orally, to be confirmed in writing) of
acceptance of said Old Securities by the Company; provided, however, that in all
cases, Old Securities tendered pursuant to the Exchange Offer will be exchanged
only after timely receipt by you of
-3-
<PAGE> 4
certificates for such Old Securities (or confirmation of book-entry transfer
into your account at the Book-Entry Transfer Facility), a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees and any other required documents. You shall issue New
Securities only in denominations of $1,000 or any integral multiple thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and the Letter of Transmittal, Old Securities tendered pursuant to the Exchange
Offer may be withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any Old Securities
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Old Securities
tendered shall be given (and confirmed in writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept
for exchange all or part of the Old Securities tendered because of an invalid
tender, the occurrence of certain other events set forth in the Prospectus under
the caption "The Exchange Offer -- Certain Conditions to the Exchange Offer"
or otherwise, you shall as soon as practicable after the expiration or
termination of the Exchange Offer return those certificates for unaccepted Old
Securities (or effect appropriate book-entry transfer), together with any
related required documents and the Letters of Transmittal relating thereto that
are in your possession, to the persons who deposited them.
12. All certificates for reissued Old Securities, unaccepted Old
Securities or for New Securities shall be forwarded by first-class mail.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in writing by
you and the Company;
(b) will be regarded as making no representations and having
no responsibilities as to the validity, sufficiency, value or genuineness of any
of the certificates or the Old Securities represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to and
-4-
<PAGE> 5
will make no representation as to the validity, value or genuineness of the
Exchange Offer;
(c) shall not be obligated to take any legal action hereunder
which might in your reasonable judgment involve any expense or liability, unless
you shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request,
comment, agreement or other instrument whatsoever not only as to its due
execution and validity and effectiveness of its provisions, but also as to the
truth and accuracy of any information contained therein, which you shall in good
faith believe to be genuine or to have been signed or represented by a proper
person or persons;
(f) may rely on and shall be protected in acting upon written
or oral instructions from any officer of the Company;
(g) may consult with your counsel with respect to any
questions relating to your duties and responsibilities and the advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by you hereunder in
good faith and in accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Old Securities
pursuant to the Exchange Offer as to the wisdom of making such tender or as to
the market value or decline or appreciation in market value of any Old
Securities.
15. You shall take such action as may from time to time be requested
by the Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms
as may be approved from time to time by the Company, to all persons requesting
such documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate only
to the procedures for accepting (or withdrawing from) the Exchange Offer. The
Company will furnish you with copies of such documents at your request. All
other requests for information relating to the Exchange Offer shall be directed
to the Company, Attention: Christopher N. Zodrow.
-5-
<PAGE> 6
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Christopher N. Zodrow of the
Company and such other person or persons as it may request, daily (and more
frequently during the week immediately preceding the Expiration Date and if
otherwise requested) up to and including the Expiration Date, as to the number
of Old Securities which have been tendered pursuant to the Exchange Offer and
the items received by you pursuant to this Agreement, separately reporting and
giving cumulative totals as to items properly received and items improperly
received. In addition, you will also inform, and cooperate in making available
to, the Company or any such other person or persons upon oral request made from
time to time prior to the Expiration Date of such other information as it or he
or she reasonably requests. Such cooperation shall include, without limitation,
the granting by you to the Company and such person as the Company may request of
access to those persons on your staff who are responsible for receiving tenders,
in order to ensure that immediately prior to the Expiration Date the Company
shall have received information in sufficient detail to enable it to decide
whether to extend the Exchange Offer. You shall prepare a final list of all
persons whose tenders were accepted, the aggregate principal amount of Old
Securities tendered, the aggregate principal amount of Old Securities accepted
and deliver said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall
be stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Company.
18. You hereby expressly waive any lien, encumbrance or right of
set-off whatsoever that you may have with respect to funds deposited with you
for the payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus and the Letter
of Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the
-6-
<PAGE> 7
latter two documents, except with respect to the duties, liabilities and
indemnification of you as Exchange Agent, which shall be controlled by this
Agreement.
21. The Company covenants and agrees to indemnify and hold you
harmless in your capacity as Exchange Agent hereunder against any loss,
liability, cost or expense, including attorneys' fees and expenses, arising out
of or in connection with any act, omission, delay or refusal made by you in
reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably believed
by you to be valid, genuine and sufficient and in accepting any tender or
effecting any transfer of Old Securities reasonably believed by you in good
faith to be authorized, and in delaying or refusing in good faith to accept any
tenders or effect any transfer of Old Securities; provided, however, that the
Company shall not be liable for indemnification or otherwise for any loss,
liability, cost or expense to the extent arising out of your gross negligence or
willful misconduct. In no case shall the Company be liable under this indemnity
with respect to any claim against you unless the Company shall be notified by
you, by letter or by facsimile confirmed by letter, of the written assertion of
a claim against you or of any other action commenced against you, promptly after
you shall have received any such written assertion or notice of commencement of
action. The Company shall be entitled to participate at its own expense in the
defense of any such claim or other action, and, if the Company so elects, the
Company shall assume the defense of any suit brought to enforce any such claim.
In the event that the Company shall assume the defense of any such suit, the
Company shall not be liable for the fees and expenses of any additional counsel
thereafter retained by you so long as the Company shall retain counsel
satisfactory to you to defend such suit, and so long as you have not determined,
in your reasonable judgment, that a conflict of interest exists between you and
the Company.
22. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that you are required to deduct 31% on
payments to holders who have not supplied their correct Taxpayer Identification
Number or required certification. Such funds will be turned over to the Internal
Revenue Service in accordance with applicable regulations.
23. You shall deliver or cause to be delivered, in a timely manner
to each governmental authority to which any transfer taxes are payable in
respect of the exchange of Old Securities, the Company's check in the amount of
all transfer taxes so payable, and the Company shall reimburse you for the
amount of any and all transfer taxes payable in respect of the exchange
-7-
<PAGE> 8
of Old Securities; provided, however, that you shall reimburse the Company for
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
25. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
26. In case any provision of this Agreement 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.
27. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
28. Unless otherwise provided herein, all notices, requests and
other communications to any party hereunder shall be in writing (including
facsimile or similar writing) and shall be given to such party, addressed to it,
at its address or telecopy number set forth below:
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<PAGE> 9
If to the Company:
WestPoint Stevens Inc.
507 West Tenth Street
West Point Georgia 31833
Facsimile: (706) 645-4112
Attention: Christopher N. Zodrow
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
29. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 19, 21 and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any certificates for Securities, funds or property then held by you
as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as of the date
hereof.
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<PAGE> 10
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
Westpoint Stevens Inc.
By:______________________
Name:
Title:
Accepted as of the date
first above written:
THE BANK OF NEW YORK, as Exchange Agent
By:_____________________
Name:
Title:
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SCHEDULE I
FEES
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