UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 1996
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 001-11621
F O O D B R A N D S A M E R I C A, I N C.
______________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-2535513
_______________________________ ___________________
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1601 NW Expressway, Suite 1700, Oklahoma City, Oklahoma 73118
_____________________________________________________ __________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (405)879-4100
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES __X__ NO _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13, or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
YES __X__ NO _____
On July 24, 1996, the number of shares outstanding of the
registrant's common stock, $.01 par value, was 12,462,255.
<PAGE>
FOODBRANDS AMERICA, INC.
_________________________
TABLE OF CONTENTS
FORM 10-Q
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet at
June 29, 1996 (Unaudited) and
December 30, 1995 . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statement of
Operations - Unaudited, Three Months and Six
Months Ended June 29, 1996 and July 1, 1995 . . . 4-5
Condensed Consolidated Statement of Cash
Flows - Unaudited, Six Months Ended
June 29, 1996 and July 1, 1995. . . . . . . . . . 6-7
Notes to the Condensed Consolidated
Financial Statements - Unaudited . . . . . . . . 8-11
Report of Independent Accountants . . . . . . . . 12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . 13-17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . 18
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . . 18
Item 5. Other Information. . . . . . . . . . . . . . . . . 19
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 19-21
Signatures . . . . . . . . . . . . . . . . . . . 22
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
FOODBRANDS AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollar amounts in thousands, except par value)
<CAPTION>
June 29, December 30,
ASSETS 1996 1995
________ ____________
<S> <C> <C>
Current assets: (Unaudited)
Cash and cash equivalents $ 7,580 $ 18,207
Receivables 40,580 46,166
Inventories 65,538 58,523
Other current assets 7,620 3,130
________ ________
Total current assets 121,318 126,026
Property, plant and equipment, net of
accumulated depreciation and amortization
of $46,950 and $38,188 139,960 139,926
Intangible assets, net of accumulated
amortization of $8,065 and $5,375 (Note 3) 188,300 195,025
Deferred charges and other assets (Note 3) 83,808 46,284
Reorganization value in excess of amounts
allocable to identifiable assets, net of
accumulated amortization of $9,641 at
December 30, 1995 (Note 3) - 25,311
________ ________
$533,386 $532,572
======== ========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt $ 14,822 $ 18,341
Accounts payable 31,607 36,961
Accrued liabilities 44,897 50,294
________ ________
Total current liabilities 91,326 105,596
Long-term debt 317,590 305,407
Other long-term liabilities 75,363 78,340
Stockholders' equity:
Preferred stock, 4,000,000 shares
authorized, none issued and outstanding - -
Common stock, $.01 par value, 20,000,000
shares authorized, 12,475,238 shares
issued and outstanding (12,467,738
shares at December 30, 1995) 125 125
Capital in excess of par value 151,348 151,248
Retained earnings (deficit) (99,425) (105,203)
Minimum pension liability adjustment (2,941) (2,941)
________ ________
Total stockholders' equity 49,107 43,229
________ ________
$533,386 $532,572
======== ========
<FN>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
FOODBRANDS AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED
(Dollar amounts in thousands, except per share figures)
<CAPTION>
Three Months Ended Six Months Ended
___________________ ___________________
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
________ ________ ________ ________
<S> <C> <C> <C> <C>
Net sales $200,710 $146,582 $386,707 $285,994
Cost of sales 160,660 113,995 307,348 222,242
________ ________ ________ ________
Gross profit 40,050 32,587 79,359 63,752
Operating expenses:
Selling 20,454 17,267 38,734 33,736
General and administrative 6,446 6,484 14,370 12,345
Amortization of intangible
assets 1,723 1,081 3,470 2,162
________ ________ ________ ________
Total 28,623 24,832 56,574 48,243
________ ________ ________ ________
Operating income 11,427 7,755 22,785 15,509
Other income (expense):
Interest and financing
costs (7,662) (4,352) (15,081) (8,707)
Other, net (214) (175) (396) (332)
________ ________ ________ ________
Total (7,876) (4,527) (15,477) (9,039)
________ ________ ________ ________
Income from continuing
operations before income
taxes 3,551 3,228 7,308 6,470
Income tax provision
(benefit) (Note 3) (5,156) 1,296 (3,521) 2,746
________ ________ ________ ________
Income from continuing
operations 8,707 1,932 10,829 3,724
Discontinued operations
(Note 4):
Income (loss) from
operations of the Retail
Division (less applicable
income tax benefit) - (1,766) - (4,121)
Loss on disposal of the
Retail Division (plus
applicable income tax
expense of $10,300) - (38,526) - (38,526)
Extraordinary loss on
early extinguishment of
debt (less applicable
income tax benefit)
(Note 6) (5,051) - (5,051) -
________ ________ ________ ________
Net income (loss) $ 3,656 $(38,360) $ 5,778 $(38,923)
======== ======== ======== ========
Continued
</TABLE>
<PAGE>
<TABLE>
FOODBRANDS AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED (continued)
(Dollar amounts in thousands, except per share figures)
<CAPTION>
Three Months Ended Six Months Ended
___________________ ___________________
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
________ _______ ________ _______
<S> <C> <C> <C> <C>
Earnings (loss) per share-
primary and fully diluted:
Income from continuing
operations $0.70 $ 0.16 $0.87 $ 0.30
Income (loss) from
discontinued operations - (0.14) - (0.33)
Loss on disposal of
discontinued operations - (3.09) - (3.09)
Extraordinary loss on early
extinguishment of debt (0.41) - (0.41) -
_____ ______ _____ ______
Net income (loss) $0.29 $(3.07) $0.46 $(3.12)
===== ====== ===== ======
Weighted average number
of common and common
equivalent shares
outstanding -
primary and fully diluted 12,471 12,448 12,470 12,448
<FN>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
FOODBRANDS AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED
Increase (Decrease) in Cash and Cash Equivalents
(Dollar amounts in thousands)
<CAPTION>
Six Months Ended
_____________________
June 29, July 1,
1996 1995
_________ _________
<S> <C> <C>
Cash flows from operating activities:
Income from continuing operations $ 10,829 $ 3,724
Adjustments to reconcile income from
continuing operations to net cash provided
(used) by continuing operating activities:
Depreciation and amortization 8,877 5,386
Amortization of intangible assets 3,470 2,162
Postretirement medical benefits 340 388
Amortization included in interest expense 931 524
Deferred income taxes (3,669) 2,385
Payments for restructuring/integration (147) (1,780)
Deferred compensation 418 -
Changes in:
Receivables 5,190 (4,559)
Inventories (7,015) (2,579)
Other current assets (4,490) 93
Deferred charges and other assets (33) (95)
Accounts payable and accrued liabilities (11,764) (53)
Other 39 (4)
________ ________
Net cash flows provided by continuing
operations 2,976 5,592
Net cash flows used by discontinued
operations including changes in working
capital (1,536) (10,474)
________ ________
Net cash provided (used) by operating
activities 1,440 (4,882)
________ ________
Cash flows from investing activities:
Purchase of property, plant and equipment (10,585) (9,367)
Acquisition of KPR Holdings, L.P. (129) -
Acquisition of TNT Crust, Inc. (91) -
Payments received on notes receivable 554 292
Proceeds from sale of property, plant and
equipment 1,312 22
Increase in notes receivable (450) -
Proceeds from sale of Retail Division - 65,786
Net investing activities of discontinued
operations - (838)
________ ________
Net cash provided (used) by investing
activities (9,389) 55,895
________ ________
Continued
</TABLE>
<PAGE>
<TABLE>
FOODBRANDS AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED (continued)
Increase (Decrease) in Cash and Cash Equivalents
(Dollar amounts in thousands)
<CAPTION>
Six Months Ended
____________________
June 29, July 1,
1996 1995
________ _______
<S> <C> <C>
Cash flows from financing activities:
Proceeds from debt obligations, net of
issuance costs $165,489 $ -
Borrowings under revolving working capital
facility 110,500 -
Payments on revolving working capital
facility (109,000) (58,023)
Payment on promissory note (50,000) -
Payments on capital lease and debt
obligations (113,425) (660)
Payment on early extinguishment of debt (6,325) -
Net financing activities of discontinued
operations - (549)
Issuance of common stock 83 -
________ ________
Net cash provided (used) by financing
activities (2,678) (59,232)
________ ________
Increase (decrease) in cash and cash
equivalents (10,627) (8,219)
Cash and cash equivalents at beginning of
period 18,207 28,777
________ ________
Cash and cash equivalents at end of period $ 7,580 $ 20,558
======== ========
Supplemental disclosure of noncash investing
and financing activities:
Capital lease obligations $ 764 $ -
Loss on early extinguishment of debt, net
of income taxes $ (1,274) $ -
<FN>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
</TABLE>
<PAGE>
FOODBRANDS AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
NOTE 1 GENERAL
The accompanying condensed consolidated financial
statements include the accounts of Foodbrands America, Inc. and
all majority-owned subsidiaries (collectively, the "Company") and
have been prepared without audit. The Balance Sheet at December
30, 1995, has been derived from financial statements which have
been audited by Coopers & Lybrand L.L.P., independent
accountants. Certain reclassifications have been made to prior
year balances to conform to the current year presentation.
In the opinion of the Company, the accompanying unaudited
condensed consolidated financial statements contain all
adjustments (adjustments are of a normal, recurring nature except
for the adjustment to the deferred tax asset valuation allowance
described in Note 3) necessary for a fair presentation of the
financial position as of June 29, 1996 and December 30, 1995, and
the results of operations for the three months and six months
ended June 29, 1996 and July 1, 1995 and cash flows for the six
months ended June 29, 1996 and July 1, 1995. Results for the
three and six months ended June 29, 1996 are not necessarily
indicative of the results which will be realized for the year
ending December 28, 1996. The financial statements should be
read in conjunction with the Company's Annual Report on Form
10-K, as amended, for the year ended December 30, 1995.
The Company has adopted the policy of netting its cash
balances within the same bank and presenting positive cash
balances as cash and negative balances as accounts payable.
NOTE 2 INVENTORIES
Inventories at June 29, 1996 and December 30, 1995 are
summarized as follows (in thousands):
June 29, December 30,
1996 1995
________ ____________
Raw materials and supplies $20,006 $20,147
Work in process 8,010 7,365
Finished goods 37,522 31,011
_______ _______
$65,538 $58,523
======= =======
NOTE 3 INCOME TAXES
The provision (benefit) for income taxes on continuing
operations consists of the following components (in thousands):
Three Months Ended Six Months Ended
___________________ ___________________
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
________ _______ ________ _______
Current:
Federal $ 24 $ 5 $ 74 $ 36
State 24 81 74 325
_______ ______ _______ ______
48 86 148 361
_______ ______ _______ ______
Deferred:
Federal 1,232 1,289 2,495 2,276
State 265 (79) 537 109
_______ ______ _______ ______
1,497 1,210 3,032 2,385
_______ ______ _______ ______
Change in
valuation
allowance (6,701) - (6,701) -
_______ ______ _______ ______
Total $(5,156) $1,296 $(3,521) $2,746
======= ====== ======= ======
The effective tax rate differs from the statutory rate due
primarily to amortization of certain intangible assets which are
not deductible for tax purposes. The effective tax rate was
calculated based on the projected taxable income for the full
fiscal year and the anticipated changes in the deferred tax
assets and related valuation allowance and the deferred tax
liabilities.
In 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes." At December 30, 1995, the Company had a deferred tax
asset of $32.7 million which was net of a valuation allowance of
$43.3 million. In the second quarter of 1996, the deferred tax
asset was increased by $1.9 million resulting from the net tax
benefits generated from the extraordinary loss.
In the second quarter of 1996, the Company eliminated its
valuation allowance resulting in a net deferred tax asset of
$68.5 million. Two factors contributed to the elimination of the
valuation allowance. The first factor involved the acquisitions
in December 1995 of KPR Holdings, L.P. and TNT Crust, Inc. The
results of operations from these two acquisitions through the end
of the second quarter of 1996 have exceeded expectations and
enhance the Company's projections of taxable income. The other
factor involved the debt refinancing which occurred in May 1996
(see Note 6) which increased the Company's financial flexibility.
As a result of these two factors, the Company's projected taxable
income indicates that it is more likely than not that the net
deferred tax benefits will be realized in the future.
A majority of the deferred tax assets are attributable to
pre-reorganization temporary differences and NOLs, and in
accordance with Fresh Start Reporting as prescribed by Statement
of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code," the tax benefit from
utilizing the pre-reorganization temporary differences and NOLs
was recorded as a reduction of Reorganization Value and other
intangible assets arising from bankruptcy. Therefore, the
adjustment resulted in the elimination of the remaining
Reorganization Value of $23.0 million and a reduction in
intangible assets of $4.2 million. In addition, a tax
benefit of $6.7 million was recorded resulting from the
elimination of the valuation allowance associated with
post-reorganization temporary differences and NOLs.
NOTE 4 DISCONTINUED OPERATIONS
On May 30, 1995, the Company sold the assets of its Retail
Division (a separate industry segment). The sales price
approximated $65.8 million in cash payments plus the assumption
of long-term debt of approximately $6.0 million and certain
current liabilities related to the division of approximately $4.5
million. Proceeds of the sale were used to reduce the Company's
debt under its term loan by $58.0 million. The remainder of the
proceeds were used to pay expenses related to the sale. The
results of operations and cash flows attributable to the Retail
Division are reported as discontinued operations.
The results of discontinued operations are (in thousands):
Three Months Six Months
Ended Ended
July 1, July 1,
1995 1995
____________ __________
Net sales $27,558 $72,357
======= =======
Loss before taxes $(3,490) $(7,020)
Tax benefit 1,724 2,899
_______ _______
Net loss $(1,766) $(4,121)
======= =======
NOTE 5 RESTRUCTURING AND INTEGRATION
In December 1994, the Company announced a restructuring
program that resulted in a $10.6 million charge against operating
income in 1994. The restructuring program identified specific
manufacturing facilities and operations. The charge also
included costs incurred prior to year end associated with the
corporate legal restructuring to preserve the Company's income
tax NOLs and to change the Company's name to Foodbrands America,
Inc.
In the first half of 1996, the Company has continued to
consolidate certain operations. In connection with these
actions, the Company paid $0.1 million in 1996 that was charged
against the reserve. The balance of the accrued liabilities
remaining at June 29, 1996, is $1.1 million and $2.1 million
remains as a reserve against property, plant and equipment.
Management believes that the remainder of the reserve is adequate
to complete the restructuring and integration program and plans
to complete the program by the end of 1996.
NOTE 6 LONG-TERM DEBT
On May 15, 1996, the Company completed an offering of $120
million Senior Subordinated Notes due 2006 at par with an
interest rate of 10 3/4% (the "10 3/4% Notes"). The 10 3/4%
Notes are unsecured and subordinated in right of payment to all
existing and future senior indebtedness. The net proceeds from
the offering were used to consummate a tender offer to repurchase
the outstanding 9 3/4% Senior Subordinated Redeemable Notes due
2000 (the "9 3/4% Notes"). As a result of the transaction, the
Company incurred a charge of approximately $5.1 million, net of
$3.6 million income tax benefit, for the early extinguishment of
debt and payment of the tender premium.
Terms of the 10 3/4% Notes include a guarantee by
substantially all of the Company's direct and indirect
subsidiaries, all of which are wholly-owned. The guarantees are
joint and several, full, complete and unconditional. There are
no restrictions on the ability of any subsidiaries to transfer
funds to the Company in the form of cash dividends, loans or
advances. The Company is a holding company with no assets,
liabilities, or operations other than its investments in its
subsidiaries. The non-guarantors are inconsequential,
individually and in the aggregate to the consolidated financial
statements, and separate financial statements of the guarantors
are not presented because management has determined that they
would not be material to investors.
Simultaneously with the redemption of the 9 3/4% Notes, the
bank credit agreement was amended to extend the maturities of the
$145 million term loan to seven years from four and a half, thus
reducing the quarterly amortization. These recent transactions
have increased the Company's financial flexibility.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Foodbrands America, Inc.
We have reviewed the condensed consolidated balance sheet
of Foodbrands America, Inc. and subsidiaries as of June 29, 1996,
and the related condensed consolidated statements of operations
for the three month and six month periods ended June 29, 1996,
and July 1, 1995, and the condensed consolidated statements of
cash flows for the six month periods ended June 29, 1996 and July
1, 1995. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing standards, the consolidated balance sheet as of
December 30, 1995, and the related consolidated statements of
operations, stockholders' equity and cash flows for the period
ended December 30, 1995 (not presented herein), and in our report
dated February 12, 1996, except as to the information presented
in Note 13, for which the date is May 9, 1996, we expressed an
unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 30, 1995, is
fairly stated in all material respects in relation to the
consolidated balance sheet from which it has been derived.
COOPERS & LYBRAND L.L.P.
Oklahoma City, Oklahoma
July 24, 1996
<PAGE>
FOODBRANDS AMERICA, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Continuing Operations
Comparability of Periods. Due to the acquisition of KPR
Holdings, L.P. ("KPR") and TNT Crust, Inc. ("TNT") in December
1995, the financial statements for the three months and six
months ended July 1, 1995 do not reflect the operating results of
KPR and TNT. The operating results attributable to KPR and TNT
for the three months ended June 29, 1996, include net sales of
$36.6 million, gross profit of $8.0 million and operating income
of $6.0 million and for the six months ended June 29, 1996,
include net sales of $71.9 million, gross profit of $14.5 million
and operating income of $10.0 million.
On May 30, 1995, the Company sold the assets of its Retail
Division (a separate industry segment) to Thorn Apple Valley,
Inc. The results of operations and cash flows of the division
have been reported as discontinued operations. Accordingly, the
results of continuing operations for the second quarter and first
six months of 1995 do not include the operations of the Retail
Division.
Three Months Ended June 29, 1996 Compared to the Three Months
Ended July 1, 1995. The Company's net sales for the second
quarter of 1996 were $200.7 million, an increase of 36.9% over
sales of $146.6 million for the second quarter of 1995. Of the
$54.1 million increase in net sales, $36.6 million was
attributable to the addition of KPR and TNT in December 1995.
The remaining increase was due to sales volume increases
primarily in the Food Service and Deli Divisions and higher
product pricing resulting from increased raw material costs in
all divisions.
Gross profit for the second quarter of 1996 of $40.1
million increased $7.5 million, or 22.9%, over the gross profit
of $32.6 million for the second quarter of 1995. This increase
includes the gross profit for the second quarter of 1996 of KPR
and TNT of $8.0 million. The increase was partially offset by
decreases in the Food Service and Deli Divisions' gross profit
which were negatively impacted by significant increases in raw
material cost, not all of which could be recovered through
increases in selling prices.
Selling expenses of $20.5 million in the second quarter of
1996 increased $3.2 million over the 1995 period selling expenses
of $17.3 million. Of this increase, $0.8 million related to KPR
and TNT, which was not included in the second quarter of 1995.
The remaining increase was due to (i) charges incurred at the
Specialty Brands Division resulting from ineffective promotional
programs, which were eliminated by the Division's new sales
management team; (ii) increased selling and marketing
expenditures incurred in response to competition in the Specialty
Brands Division's appetizer lines; and (iii) increased sales
volumes in the Food Service and Deli Divisions.
General and administrative expenses decreased slightly from
$6.5 million to $6.4 million. General and administrative
expenses of KPR and TNT for the second quarter of 1996 were $0.5
million which was net of an accrual eliminated in the second
quarter of 1996 due to the settlement of certain patent
litigation. The increase which resulted from the addition of KPR
and TNT was offset by the reversal of accruals associated with
asset dispositions which occurred in the second quarter of 1996.
Amortization of intangible assets increased $0.6 million
due to amortization of intangibles related to the purchase of KPR
and TNT.
Interest and financing costs increased from $4.4 million to
$7.7 million primarily as a direct result of the additional
borrowings related to the purchase of KPR and TNT. The increase
is also due to the increase in outstanding indebtedness and
increase in interest rates for the Senior Subordinated Notes as a
result of the debt refinancing (see Liquidity and Capital
Resources below).
Income tax benefit from continuing operations for the
second quarter of 1996 of $5.2 million included a $6.7 million
benefit resulting from the elimination of the Company's valuation
allowance associated with its deferred tax asset. The Company
recorded income tax expense for the second quarter of 1996 of
$1.5 million based on the effective tax rate for projected income
from continuing operations for 1996. Income tax expense recorded
in the second quarter of 1995 of $1.3 million was based on
projected income for the year. The effective tax rates were
calculated based on the projected taxable income for the full
fiscal year and the anticipated changes for the year in the
deferred tax assets and related valuation allowance and the
deferred tax liabilities.
In 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes." At December 30, 1995, the Company had a deferred tax
asset of $32.7 million which was net of a valuation allowance of
$43.3 million. In the second quarter of 1996, the deferred tax
asset was increased by $1.9 million resulting from the net tax
benefits generated from the extraordinary loss.
In the second quarter of 1996, the Company eliminated its
valuation allowance resulting in a net deferred tax asset of
$68.5 million. Two factors contributed to the elimination of the
valuation allowance. The first factor involved the acquisitions
in December 1995 of KPR and TNT. The results of operations from
these two acquisitions through the end of the second quarter of
1996 have exceeded expectations and enhance the Company's
projections of taxable income. The other factor involved the
debt refinancing which occurred in May 1996 (see Liquidity and
Capital Resources below) which increased the Company's financial
flexibility. As a result of these two factors, the Company's
projected taxable income indicates that it is more likely than
not that the net deferred tax benefits will be realized in the
future.
A majority of the deferred tax assets are attributable to
pre-reorganization temporary differences and NOLs, and in
accordance with Fresh Start Reporting as prescribed by Statement
of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code," the tax benefit from
utilizing the pre-reorganization temporary differences and NOLs
was recorded as a reduction of Reorganization Value and other
intangible assets arising from bankruptcy. Therefore, the
adjustment resulted in the elimination of the remaining
Reorganization Value of $23.0 million and a reduction in
intangible assets of $4.2 million. In addition, a tax benefit of
$6.7 million was recorded resulting from the elimination of the
valuation allowance associated with post-reorganization temporary
differences and NOLs.
Six Months Ended June 29, 1996 Compared to the Six Months Ended
July 1, 1995. Net sales for the first half of 1996 increased
35.2% to $386.7 million compared to $286.0 million for the same
period in 1995. Of the $100.7 million increase in net sales,
$71.9 million was a result of the KPR and TNT acquisition in
December 1995. The remaining increase was due to sales volume
increases primarily in the Food Service and Deli Divisions and
higher product pricing resulting from increased raw material
costs in all divisions.
In the first half of 1996, gross profit increased $15.6
million, or 24.5%, to $79.4 million from $63.8 million in the
first half of 1995. Of this total increase, $14.5 million
related to the addition of KPR and TNT. The remaining increase
in gross profit was due to sales volume increases in the Food
Service and Deli Divisions offset in part by significant
increases in raw material cost, not all of which could be
recovered through increases in selling prices.
Selling expenses for the first six months of 1996 of $38.7
million increased $5.0 million over the same period in 1995 of
$33.7 million. The addition of KPR and TNT accounted for $2.0
million of this increase. The remaining increase was due to (i)
charges incurred at the Specialty Brands Division resulting from
ineffective promotional programs, which were eliminated by the
Division's new sales management team; (ii) increased selling and
marketing expenditures incurred in response to competition in the
Specialty Brands Division's appetizer lines; and (iii) increased
sales volumes in the Food Service and Deli Divisions.
General and administrative expenses increased $2.0 million
or 16.4%. The increase resulting from the KPR and TNT
acquisition was $1.1 million net of an accrual eliminated in the
second quarter of 1996 due to the settlement of certain patent
litigation. The remaining increase was due to non-cash expenses
for performance based employee stock options not occurring in the
previous year and normal cost increases reduced in part by the
reversal of accruals associated with asset dispositions which
occurred in the second quarter of 1996.
Amortization of intangibles increased $1.3 million due to
the amortization of intangibles related to the KPR and TNT
purchase.
Interest and financing costs increased $6.4 million as a
result of the debt associated with the KPR and TNT acquisition.
The increase is also due to the increase in outstanding
indebtedness and increase in interest rates for the Senior
Subordinated Notes as a result of the debt refinancing (see
Liquidity and Capital Resources below).
Income tax benefit from continuing operations for the first
six months of 1996 of $3.5 million included a $6.7 million
benefit resulting from the elimination of the Company's valuation
allowance associated with its deferred tax asset. The Company
recorded income tax expense for the first six months of 1996 of
$3.2 million based on the effective tax rate for projected income
from continuing operations for 1996. The effective tax rate was
calculated based on the projected taxable income for the full
fiscal year and the anticipated changes for the year in the
deferred tax assets and related valuation allowance and the
deferred tax liabilities. Income tax expense recorded in the
first six months of 1995 of $2.7 million was based on projected
income for the year.
Discontinued Operations
On May 30, 1995, the Company sold the assets of its Retail
Division (a separate industry segment). As a result of the sale,
the Company recorded a net loss of approximately $38.5 million
which included the write off of certain post-bankruptcy
intangible assets.
Discontinued operations includes the net sales and related
expenses associated with the Retail Division's operations.
Included in the second quarter of 1995 are (i) net sales of $27.6
million, (ii) gross profit of $2.9 million, (iii) a tax benefit
of $1.7 million and (iv) a net loss of $1.8 million.
Discontinued operations for the six months ended July 1,
1995, includes (i) net sales of $72.4 million, (ii) gross profit
of $9.1 million, (iii) a tax benefit of $2.9 million and (iv) a
net loss of $4.1 million.
Extraordinary Loss
During the second quarter of 1996, the Company incurred an
extraordinary loss on the early extinguishment of debt of $5.1
million, net of income tax benefit of $3.6 million. This loss
was comprised of the write off of the remaining unamortized
deferred loan costs associated with the 9 3/4% Notes (as defined
below) and premium fees paid to redeem the 9 3/4% Notes in
connection with the issuance of the 10 3/4% Notes (as defined
below).
Liquidity and Capital Resources
Management believes that cash flow from operations for the
full fiscal year combined with the borrowing capacity available
under the Company's revolving credit loan will be sufficient to
meet the Company's operating and debt service cash requirements
for the foreseeable future.
On May 15, 1996, the Company completed an offering of $120
million Senior Subordinated Notes due 2006 at par with an
interest rate of 10 3/4% (the "10 3/4% Notes"). The 10 3/4%
Notes are unsecured and subordinated in right of payment to all
existing and future senior indebtedness. The net proceeds from
the offering were used to consummate a tender offer to repurchase
the outstanding 9 3/4% Senior Subordinated Redeemable Notes due
2000 (the "9 3/4% Notes"). As a result of the transaction, the
Company incurred a charge of approximately $5.1 million, net of
$3.6 million income tax benefit, for the early extinguishment of
debt and payment of the tender premium.
Terms of the 10 3/4% Notes include a guarantee by
substantially all of the Company's direct and indirect
subsidiaries, all of which are wholly-owned. The guarantees are
joint and several, full, complete and unconditional. There are
no restrictions on the ability of any subsidiaries to transfer
funds to the Company in the form of cash dividends, loans or
advances. The Company is a holding company with no assets,
liabilities, or operations other than its investments in its
subsidiaries. The non-guarantors are inconsequential,
individually and in the aggregate to the consolidated financial
statements, and separate financial statements of the guarantors
are not presented because management has determined that they
would not be material to investors.
Simultaneously with the redemption of the 9 3/4% Notes, the
bank credit agreement was amended to extend the maturities of the
$145 million term loan to seven years from four and a half, thus
reducing the quarterly amortization. These recent transactions
have increased the Company's financial flexibility.
Cash Flows and Capital Expenditures.
First half of 1996. For the first half of 1996, net cash
provided by operating activities was $1.4 million. The increase
in cash resulted primarily from cash generated from the results
of continuing operations after adding back net noncash items of
depreciation, amortization and deferred income tax benefit
coupled with a decrease in accounts receivable. The total
increases in cash were partially offset by increases in
inventories and other current assets, a decrease in accounts
payable and a reduction in accrued liabilities resulting
primarily from payments for interest and employee benefit
programs and by payments related to discontinued operations.
Expenditures for additions to property, plant and equipment
were $11.3 million. Approximately $4.1 million of these
expenditures related to expansion of production facilities and
the remainder was for cost savings programs and for replacements
and modifications to existing facilities. The primary source of
the funds for these expenditures was from cash provided by
operations with approximately $0.8 million of the funding being
provided from capital leases. Also during the first quarter of
1996, the Company paid the $50.0 million promissory note that was
executed as part of the KPR acquisition by drawing down the
remaining balance available under its bank credit agreement term
loan.
First half of 1995. For the first half of 1995, net cash used by
operating activities was $4.9 million. Decreases in cash
resulted primarily from the use of cash in the operations of the
discontinued Retail Division. In addition, cash decreased due to
increases in receivables and inventory and payments for
restructuring/integration. Increases in cash were provided by
the results of continuing operations during the period after
adding back noncash items of depreciation, amortization, interest
and the provision for postretirement medical benefits and
deferred income taxes.
Expenditures for additions to property, plant and equipment
were $10.2 million, of which $.8 million related to discontinued
operations. Approximately $2.1 million of these expenditures
related to increased capacity, $2.8 million related to new
equipment and fixtures to accommodate the transfer of production
to other facilities resulting from the integration and
restructuring program and the sale of the Retail Division and the
remainder was for replacements and modifications to existing
facilities. The source of the funds for these expenditures was
from cash provided by operations.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
C&F Packing Company, Inc. v. KPR, Inc., d/b/a Rosani Foods,
and Pizza Hut, Inc., United States District Court for the
Northern District of Texas, Fort Worth Division, Case No.
4:93-CV-525-Y, filed April 13, 1993. Prior to Foodbrands America
acquiring KPR, C&F Packing Company, Inc. ("C&F") had instituted a
civil action against KPR alleging that KPR, using equipment and a
process to make a particular sausage product, infringed the C&F
patents. KPR denied these allegations and contended that C&F's
patents were invalid and that, even if valid, the process and
equipment used by KPR did not infringe the patents. C&F also
alleged misappropriation of trade secrets and proprietary
information, as well as other claims, all of which KPR denied.
Also, the predecessor of Foodbrands America had previously
entered into certain consent decrees with C&F regarding the
same patents.
Effective July 3, 1996, based on a settlement agreement
finalized in June 1996, the Company resolved the foregoing
litigation. Under the terms of the settlement agreement, none of
the parties admit infringement, validity or enforceability of
C&F's patents. The settlement involves a one time payment by
Foodbrands America and KPR to C&F. The amount to be paid was
within the amount reserved by the Company in its financial
statements for the litigation at the time of the acquisition of
KPR. As a result, the settlement payment will not reduce the
earnings of the Company. Pursuant to the terms of the settlement
agreement, the litigation was dismissed with prejudice and KPR
and Foodbrands America will be entitled to continue to use their
existing process and equipment to manufacture and sell the
product to their existing customers without the payment of
royalties.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders (the "Annual Meeting")
was held on May 21, 1996. At the Annual Meeting the stockholders
voted on the following items:
1. A proposal to elect three (3) directors each to serve
for a term of three years. The directors elected were
(1) Richard T. Berg with 10,159,920 affirmative votes
and 53,834 votes withheld; (2) Peter A. Joseph with
10,160,215 affirmative votes and 53,539 votes withheld;
and (3) Paul W. Marshall with 10,160,319 affirmative
votes and 53,435 votes withheld. The directors whose
term of office continued after the Annual Meeting are:
Theodore Ammon, Dort A. Cameron III, R. Randolph
Devening, Terry M. Grimm, Paul S. Levy, and Angus C.
Littlejohn, Jr.
2. A proposal to amend Sections 5.2, 5.4 and 5.7 of Article
Fifth of the Company's Amended and Restated Certificate
of Incorporation to revise the Transfer Restrictions,
was approved by 10,189,543 affirmative votes, with
10,192 negative votes and 14,019 abstaining.
3. A proposal to approve the Non-Employee Directors'
Deferred Stock Compensation Plan was approved by
10,109,099 affirmative votes, 91,101 negative votes and
13,554 abstaining.
4. A proposal to amend the Company's 1992 Stock Incentive
Plan to include a "Change of Control" provision and to
limit the number of options awarded to any one
participant during a year was approved by 9,807,400
affirmative votes, with 392,893 negative votes and
13,461 abstaining.
5. A proposal to adopt the Associate Stock Purchase Plans
for the Company's associates was approved by 10,136,638
affirmative votes, with 64,169 negative votes and 12,947
abstaining.
Item 5. Other Information
To meet growing demand for specialty ham products,
production capacity will be expanded in the third quarter of 1996
with the addition of a new facility at Concordia, Missouri. The
Concordia facility is being leased for a one year period with an
option to purchase the facility at any time during the year. The
facility will be in a startup phase during the third quarter and
in full production during the fourth quarter of 1996.
On May 29, 1996, the Company filed with the Securities &
Exchange Commission ("SEC") two registration statements on Form
S-8 covering a total of 100,000 shares of common stock to be sold
through the Company's qualified and non-qualified associate
stock purchase plan.
On May 31, 1996, the Company filed with the SEC a
registration statement on Form S-8 covering 150,000 shares of
common stock to be issued to non-employee directors in lieu of
all or a portion of the compensation they receive for membership
on the Board of Directors.
On May 31, 1996, the Company filed with the SEC a
registration statement on Form S-8 covering 25,000 shares of
common stock to be issued in connection with the 1995 Directors
Option Agreement.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (the following exhibits are listed and numbered
in accordance with Item 601 of Regulation S-K as of the
date of this filing and consistent with the numbering
used in the Company's Annual Report on Form 10-K filed
February 26, 1996)
Exhibit Number Description
3.1 Amended and Restated Certificate of
Incorporation of Foodbrands America,
Inc. as amended.
3.2 Amended and Restated Bylaws of
Foodbrands America, Inc. as amended.
4.11 Foodbrands America, Inc. 1992 Stock
Incentive Plan as amended.
4.14 Foodbrands America, Inc. Associate
Stock Purchase Plan.
4.15 Foodbrands America, Inc.
Nonqualified Associate Stock
Purchase Plan.
4.16 Indenture between Foodbrands
America, Inc. and its subsidiaries,
and The Liberty Bank and Trust
Company of Oklahoma City, N.A., as
trustee, dated as of May 15, 1996.
4.17 Form of 10 3/4% Senior Subordinated
Notes Due 2006.
4.18 Fourth Supplemental Indenture
between Foodbrands America, Inc. and
First Fidelity Bank, N.A., New York,
as trustee, dated as of May 15,
1996.
10.21 Form of Transition Employment
Agreement dated May 30, 1996,
between Foodbrands America, Inc. and
Thomas G. McCarley, Patrick A.
O'Ray, Raymond J. Haefele,
Bryant P. Bynum, William L. Brady,
David J. Clapp and Howard C. Madsen.
10.25 Form of Non-Qualified Stock Option
Agreement dated June 1, 1996,
between Foodbrands America, Inc. and
Thomas G. McCarley, Patrick A.
O'Ray, Raymond J. Haefele, Bryant P.
Bynum, William L. Brady, David J.
Clapp, Howard C. Madsen, William E.
Rosenthal and Howard S. Katz.
10.47 Foodbrands America, Inc. Associate
Stock Purchase Plan (see Exhibit
4.14 above).
10.48 Foodbrands America, Inc.
Nonqualified Associate Stock
Purchase Plan (see Exhibit 4.15
above).
10.49 Indenture between Foodbrands
America, Inc. and its subsidiaries
and The Liberty Bank and Trust
Company of Oklahoma City, N.A., as
trustee, dated as of May 15,
1996 (see Exhibit 4.16 above).
10.50 Form of 10 3/4% Senior Subordinated
Notes Due 2006 (see Exhibit 4.17
above).
10.51 Fourth Supplemental Indenture
between Foodbrands America, Inc. and
First Fidelity Bank, N.A., New York,
as trustee, dated as of May 15, 1996
(see Exhibit 4.18 above).
10.52 Amendment No. 1 to Credit Agreement
among Foodbrands America, Inc. the
Lender parties thereto, Chemical
Bank and CitiBank, N.A. dated as of
May 13, 1996.
10.53 Third Amendment to Stock Purchase
Agreement by and among the
shareholders of TNT Crust, Inc. and
Foodbrands America, Inc. dated as of
June 1, 1996.
10.54 Lease Agreement With Option to
Purchase between Thorn Apple Valley,
Inc. and Continental Deli Foods,
Inc. dated as of June 3, 1996.
10.55 Form of Transition Employment
Agreement dated on or after December
17, 1991, between Doskocil Companies
Incorporated and Horst O. Sieben
(incorporated by reference to
Exhibit 10.22 to Form 10-K,
filed on February 26, 1996, and as
amended on Form 10-K/A on February
29, 1996 and May 10, 1996)
10.56 Form of Non-Qualified Stock Option
Agreement dated September 29, 1994,
between Foodbrands America, Inc. and
Horst O. Sieben (incorporated by
reference to Exhibit 10.25 to Form
10-K, filed on February 26, 1996,
and as amended on Form 10-K/A on
February 29, 1996 and May 10, 1996).
11.1 Calculation of Earnings per Share
15.1 Letter re: Unaudited Interim
Financial Information
27.1 Financial Data Schedule
(b) Reports on Form 8-K
Current Report on Form 8-K, dated April 23, 1996, of
Foodbrands America, Inc. was filed with the SEC on April
25, 1996, with respect to the Company announcing its
earnings for the first quarter of 1996.
Current Report on Form 8-K/A, Amendment No. 3, dated
December 11, 1995, of Foodbrands America, Inc. was filed
with the SEC on April 25, 1996, with respect to the
Company amending the Form 8-K/A, Amendment No. 2 dated
December 11, 1995, which was filed with the SEC on
February 29, 1996, to amend certain information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned thereunto duly authorized.
FOODBRANDS AMERICA, INC.
Dated: July 26, 1996 By:/s/ William L. Brady
William L. Brady
Vice President and Controller
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
FOODBRANDS AMERICA, INC.
ARTICLE FIRST: NAME. The name of the Corporation is
Foodbrands America, Inc. (the "Corporation").
ARTICLE SECOND: REGISTERED OFFICE AND REGISTERED AGENT.
The registered office of the Corporation in the State of Delaware
shall be located at 1209 Orange Street, City of Wilmington,
County of New Castle. The name of the registered agent in charge
thereof is The Corporation Trust Company.
ARTICLE THIRD: PURPOSE. The purpose of the Corporation
is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the State
of Delaware (the "DGCL") as presently in effect or as it may
hereafter be amended.
ARTICLE FOURTH: AUTHORIZED CAPITAL STOCK. The total
number of shares of all classes of stock that the Corporation
shall have authority to issue is Twenty-Four Million (24,000,000)
shares, of which Twenty Million (20,000,000) shares shall be
common stock, $.01 par value per share (the "Common Stock") and
Four Million (4,000,000) shares shall be preferred stock, par
value $.01 per share (the "Preferred Stock"). Authority is
hereby expressly vested in the Board of Directors, subject to the
limitations prescribed by law, to authorize the issuance from
time to time of one or more series of Preferred Stock, and with
respect to each such series, to fix by resolution or resolutions
adopted by the affirmative vote of a majority of the Board of
Directors of the Corporation the number of shares within such
series and the powers, designations, preferences, and relative,
participating, optional or other rights thereof, if any, or the
qualifications, limitations or restrictions thereof, if any.
ARTICLE FIFTH: CERTAIN RESTRICTIONS ON THE TRANSFER OF
THE CORPORATION'S STOCK.
Section 5.1 Transfer Restrictions. In order to
preserve the net operating loss carryovers (including any "net
unrealized built-in loss," as defined under applicable law),
capital loss carryovers, general business credit carryovers,
alternative minimum tax credit carryovers and foreign tax credit
carryovers (the "Tax Benefits") to which the Corporation is
entitled pursuant to the Internal Revenue Code of 1986, as
amended, or any successor statute (collectively, the "Code") and
the Treasury Regulations promulgated thereunder (the "Treasury
Regulations"), the following restrictions shall apply until the
earlier of (x) the day after the fourteenth (14th) anniversary of
the effectiveness of the merger of Doskocil Companies
Incorporated, a Delaware corporation, with and into the
Corporation (the "Merger"), (y) the repeal of Section 382 of the
Code if the Board of Directors determines that the restrictions
are no longer necessary, and (z) the beginning of a taxable year
of the Corporation to which the Board of Directors determines
that no Tax Benefits may be carried forward, unless the Board of
Directors shall fix an earlier or later date in accordance with
Section 5.7 of this Article Fifth (such date is sometimes
referred to herein as the "Expiration Date"):
(1) For purposes of this Article Fifth, (a) a
"Prohibited Ownership Percentage" shall mean any ownership of the
Corporation's stock that would cause a Person or Public Group to
be a "5-percent shareholder" of the Corporation within the
meaning of Treasury Regulation Section 1.382-2T(g)(1); (b) a
"Public Group" shall have the meaning contained in Treasury
Regulation Section 1.383-2T(f)(13); (c) a "Person" shall mean any
individual, corporation, estate, trust, association, company,
partnership, joint venture, or similar organization (including
the Corporation); (d) "Transfer" refers to any means of conveying
legal or beneficial ownership of shares of stock of the
Corporation, whether such means are direct or indirect, voluntary
or involuntary, including, without limitation, the issuance by
the Corporation of shares of stock of the Corporation (without
regard to whether such shares are treasury shares or new shares)
and the transfer of ownership of any entity that owns shares of
stock of the Corporation; and "Transferee" means any Person to
whom stock of the Corporation is Transferred.
(2) From and after the effectiveness of the Merger, no
Person shall Transfer any shares of stock of the Corporation
(other than stock described in Section 1504(a)(4) of the Code, or
stock that is not so described solely because it is entitled to
vote as a result of dividend arrearages) to any other Person to
the extent that such Transfer, if effective, (i) would cause the
Transferee or any Person or Public Group to have a Prohibited
Ownership Percentage; (ii) would increase the ownership
percentage of any Transferee or any Person or Public Group having
a Prohibited Ownership Percentage; or (iii) would create a new
Public Group under Treasury Regulation Section 1.382-2T(j)(3)(i).
(3) Any Transfer of shares of stock of the Corporation
that would otherwise be prohibited pursuant to the preceding
subsection, including but not limited to the issuance of stock by
the Corporation pursuant to the exercise of any warrants, options
or other rights to acquire stock in the Corporation, shall
nonetheless be permitted if information relating to a specific
proposed transaction is presented to the Board of Directors and
the Board determines that, based on the facts in existence at the
time of such determination, such transaction will not jeopardize
the Corporation's full utilization of the Tax Benefits, based
upon an opinion of legal counsel selected by the Board to that
effect. Nothing in this subsection will be construed to limit or
restrict the Board of Directors in the exercise of its fiduciary
duties under applicable law.
Section 5.2 Attempted Transfer in Violation of
Transfer Restriction. Unless approval of the Board of Directors
is obtained as provided in subsection (3) of Section 5.1 of this
Article Fifth, any attempted Transfer of shares of stock of the
Corporation in excess of the shares that could be Transferred to
the Transferee without restriction under subsection (2) of
Section 5.1 of this Article Fifth is not effective to Transfer
ownership of such excess shares (the "Prohibited Shares") to the
purported acquiror thereof (the "Purported Acquiror"), who shall
not be entitled to any rights as a Stockholder of the Corporation
with respect to the Prohibited Shares (including, without
limitation, the right to vote or to receive dividends with
respect thereto). All rights with respect to the Prohibited
Shares shall remain the property of the Person who initially
purported to Transfer the Prohibited Shares to the Purported
Acquiror (the "Initial Transferor") until such time as the
Prohibited Shares are resold as set forth in subsection (1) or
subsection (2) of this Section 5.2. The Purported Acquiror, by
acquiring ownership of shares of stock of the Corporation that
are not Prohibited Shares, shall be deemed to have consented to
all the provisions of this Article Fifth and to have agreed to
act as provided in the following subsection (1). The Corporation
and the Board of Directors shall be fully protected in relying in
good faith upon the information, opinions, reports or statements
of the chief executive officer, the chief financial officer, or
the chief accounting officer of the Corporation or of the
Corporation's legal counsel, independent auditors, transfer
agent, investment bankers, and other employees and agents in
making the determinations and findings contemplated by this
Section 5.2, and neither the Corporation nor the Board of
Directors shall be responsible for any good faith errors made in
connection therewith.
(1) Upon demand by the Corporation, the Purported
Acquiror shall transfer any certificate or other evidence of
Purported Acquiror's possession or control of the Prohibited
Shares, along with any dividends or other distributions paid by
the Corporation with respect to the Prohibited Shares that were
received by the Purported Acquiror (the "Prohibited
Distributions"), to an agent designated by the Corporation (the
"Agent"). If the Purported Acquiror has sold the Prohibited
Shares to an unrelated party in an arms-length transaction after
purportedly acquiring them, the Purported Acquiror shall be
deemed to have sold the Prohibited Shares as agent for the
Initial Transferor, and in lieu of transferring the Prohibited
Shares and Prohibited Distributions to the Agent shall transfer
to the Agent the Prohibited Distributions and the proceeds of
such sale (the "Resale Proceeds"), except to the extent that the
Agent grants written permission to the Purported Acquiror to
retain a portion of the Resale Proceeds not exceeding the amount
that would have been payable by the Agent to the Purported
Acquiror pursuant to the following subsection (2) if the
Prohibited Shares had been sold by the Agent rather than by the
Purported Acquiror. Any purported transfer of the Prohibited
Shares by the Purported Acquiror other than a transfer described
in one of the two preceding sentences shall not be effective to
transfer any ownership of the Prohibited Shares.
(2) The Agent shall sell in an arms-length transaction
(through the NASDAQ National Market System, if possible) any
Prohibited Shares transferred to the Agent by the Purported
Acquiror, and the proceeds of such sale (the "Sale Proceeds"), or
the Resale Proceeds, if applicable, shall be allocated, after
reimbursement to the Agent of its expenses, to the Purported
Acquiror up to the following amount: (i) where applicable, the
purported purchase price paid or value of consideration
surrendered by the Purported Acquiror for the Prohibited Shares,
or (ii) where the purported Transfer of the Prohibited Shares to
the Purported Acquiror was by gift, inheritance, or any similar
purported Transfer, the fair market value of the Prohibited
Shares at the time of such purported Transfer. Subject to the
succeeding provisions of this subsection, any Resale Proceeds or
Sales Proceeds in excess of the Agent's expenses and the amount
allocable to the Purported Acquiror pursuant to the preceding
sentence, together with any Prohibited Distributions, shall be
the property of the Initial Transferor. If the identity of the
Initial Transferor cannot be determined by the Agent through
inquiry made to the Purported Acquiror, the Agent or the
Corporation shall hold such amounts pending the determination of
the identity of the Initial Transferor. The Agent may also take,
but is not required to take, any reasonable actions to attempt to
identify the Initial Transferor. If after ninety (90) days
following the date the Prohibited Shares were transferred to the
Agent the Initial Transferor has not been identified, any amounts
due to the Initial Transferor pursuant to this subsection may be
paid over to a court or governmental agency, if applicable law
permits, or otherwise shall be transferred to an entity
designated by the Corporation that is described in Section
501(c)(3) of the Code. In no event shall any such amounts due to
the Initial Transferor inure to the benefit of the Corporation or
the Agent, but such amounts may be used to cover expenses
incurred by the Agent in attempting to identify the Initial
Transferor.
Section 5.3 Prompt Enforcement Against Purported
Acquiror. Within thirty (30) business days of learning of the
purported Transfer of Prohibited Shares to a Purported Acquiror,
the Corporation through its Secretary shall demand that the
Purported Acquiror surrender to the Agent the certificates
representing the Prohibited Shares, or any Resale Proceeds, and
any Prohibited Distributions, and if such surrender is not made
by the Purported Acquiror within thirty (30) business days from
the date of such demand, the Corporation shall institute legal
proceedings to compel such transfer; provided, however, that
nothing in this Section 5.3 shall preclude the Corporation in its
discretion from immediately bringing legal proceedings without a
prior demand, and provided further that failure of the
Corporation to act within the time periods set out in this
Section 5.3 shall not constitute a waiver of any right of the
Corporation to compel any transfer required by subsection (1) of
Section 5.2.
Section 5.4 Additional Actions to Prevent Violation
or Attempted Violation. Upon a determination by the Board of
Directors that there has been or is threatened a purported
Transfer of Prohibited Shares to a Purported Acquiror, the Board
of Directors may take such action in addition to any action
required by the preceding paragraph as it deems advisable to give
effect to the provisions of this Article Fifth, including,
without limitation, refusing to give effect on the books of this
Corporation to such purported Transfer or instituting proceedings
to enjoin such purported Transfer. Notwithstanding the foregoing
sentence, the Board of Directors shall take no action which would
prohibit the settlement of transactions entered into through the
NASDAQ National Market System.
Section 5.5 Obligation to Provide Information. The
Corporation may require as a condition to the registration of the
Transfer of any shares of its stock that the proposed Transferee
furnish to the Corporation all information reasonably requested
by the Corporation with respect to all the proposed Transferee's
direct or indirect ownership interest in, or options to acquire,
stock of the Corporation.
Section 5.6 Legends. All certificates evidencing
ownership of shares of stock of this Corporation that are subject
to the restrictions on Transfer contained in this Article Fifth
shall bear a conspicuous legend referencing the restrictions set
forth in this Article Fifth.
Section 5.7 Further Actions. Nothing contained in
this Article Fifth shall limit the authority of the Board of
Directors to take such other action to the extent permitted by
law as it deems necessary or advisable to protect the Corporation
and the interests of the holders of its securities in preserving
the Tax Benefits. Without limiting the generality of the
foregoing, in the event of a change in law making one or more of
the following actions necessary or desirable or in the event that
the Board of Directors believes that such actions are in the best
interest of the Corporation and its Stockholders, the Board of
Directors may (i) accelerate or extend the Expiration Date or
(ii) modify the definitions of any terms set forth in this
Article Fifth; provided that the Board of Directors shall
determine in writing that such acceleration, extension change or
modification is reasonably necessary or desirable to preserve the
Tax Benefits under the Code and the regulations thereunder or
that the continuation of these restrictions is no longer
reasonably necessary for the preservation of the Tax Benefits,
which determination shall be based upon an opinion of legal
counsel to the Corporation and which determination shall be filed
with the Secretary of the Corporation and mailed by the Secretary
to the Stockholders of this Corporation within ten days after the
date of any such determination. In addition, the Board of
Directors may, to the extent permitted by law, from time to time
establish, modify, amend or rescind Bylaws, regulations and
procedures of the Corporation not inconsistent with the express
provisions of this Article Fifth for purposes of determining
whether any acquisition of stock of the Corporation would
jeopardize the Corporation's ability to preserve and use the Tax
Benefits, and for the orderly application, administration and
implementation of the provisions of this Article Fifth. Such
procedures and regulations shall be kept on file with the
Secretary of the Corporation and with its transfer agent and
shall be made available for inspection by the public and, upon
request, shall be mailed to any holder of stock of the
Corporation.
ARTICLE SIXTH: CLASSIFICATION OF THE BOARD OF
DIRECTORS. Directors of the Corporation will be divided into
three classes, as nearly equal in number as possible, with the
initial term of office of the first class of Directors to expire
at the 1995 Annual Meeting of Stockholders of the Corporation,
the initial term of office of the second class of Directors to
expire at the 1996 Annual Meeting of Stockholders of the
Corporation, and the initial term of office of the third class of
Directors to expire at the 1997 Annual Meeting of Stockholders of
the Corporation. At each Annual Meeting of Stockholders of the
Corporation, Directors elected to succeed those Directors whose
terms have thereupon expired shall be elected for a term of
office to expire at the third succeeding Annual Meeting of
Stockholders after their election. If the number of Directors is
changed, any increase or decrease shall be apportioned among the
classes so as to maintain or attain, as nearly as possible, the
equality of the number of Directors in each class, and when the
number of Directors is increased and newly created directorships
are filled by the Board of Directors, the terms of the additional
Directors shall expire at the next election of the class for
which such Directors have been chosen. In no case will a
decrease in the number of Directors shorten the term of any
incumbent Director.
ARTICLE SEVENTH: STOCKHOLDERS.
Section 7.1 Annual Meeting. The Annual Meeting of
the Stockholders of the Corporation shall be held as provided in
the Corporation's Bylaws, as such Bylaws may be amended from time
to time.
Section 7.2 Special Meetings. Special Meetings of
the Stockholders of the Corporation may be called by the
Corporation upon the written request of the holders of record of
outstanding shares representing at least 25% of the voting power
of all the shares of the Corporation then entitled to vote on the
issue or issues to be presented, by the chief executive officer
of the Corporation, or by the Board of Directors pursuant to a
resolution adopted by the affirmative vote of a majority of the
entire Board of Directors.
Section 7.3 First Annual Meeting. The first Annual
Meeting of the Stockholders of the Corporation shall take place
on a date designated by the Board of Directors of the Corporation
which shall in no event be more than twelve (12) months after the
date of the first issuance of stock by the Corporation.
ARTICLE EIGHTH: BYLAWS. In furtherance and not in
limitation of the powers conferred by the laws of the State of
Delaware, the Board of Directors of the Corporation is authorized
and empowered to make, alter, amend and repeal the Bylaws of the
Corporation in any manner not inconsistent with the laws of the
State of Delaware.
ARTICLE NINTH: INDEMNIFICATION. The Corporation shall,
to the fullest extent permitted by Section 145 of the DGCL, as
presently in effect or as it may hereafter be amended, indemnify
all persons whom it may indemnify pursuant thereto and advance
expenses of litigation to Directors and Officers when so
requested.
ARTICLE TENTH: EXCULPATION. To the fullest extent
permitted by the DGCL, as presently in effect or as it may
hereafter be amended, a Director of this Corporation shall not be
liable to the Corporation or its Stockholders for monetary
damages for breach of fiduciary duty as a Director.
ARTICLE ELEVENTH: COMPROMISE OR ARRANGEMENT OF CLAIMS.
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between
this Corporation and its Stockholders or any class of them, any
court of equitable jurisdiction within the State of Delaware may,
on the application in a summary way of this Corporation or of any
creditor or Stockholder thereof or on the application of any
receiver or receivers appointed for this Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on
the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code, order a meeting of
the creditors or class of creditors, and/or of the Stockholders
or class of Stockholders of this Corporation, as the case may be,
to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the Stockholders or
class of Stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization
of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the
said application has been made, be binding on all the creditors
or class of creditors, and/or on all the Stockholders or class of
Stockholders, of this Corporation, as the case may be, and also
on this Corporation.
ARTICLE TWELFTH: AMENDMENT. The Corporation reserves
the right to amend, alter, change or repeal any provision
contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereinafter provided by
statute, and all rights conferred upon Stockholders herein are
granted subject to this reservation; provided, however, that the
affirmative vote of Seventy-Five Percent (75%) of the shares of
Common Stock entitled to vote thereon shall be required to
delete, modify, or amend any provision of Article Sixth or this
Article Twelfth of this Amended and Restated Certificate of
Incorporation.
IN WITNESS WHEREOF, the Corporation has caused this
Amended and Restated Certificate of Incorporation to be executed
by Bryant P. Bynum, its Vice President and Treasurer, and
attested by its Secretary this 16th day of May, 1995.
FOODBRANDS AMERICA, INC.
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President and Treasurer
ATTEST:
/s/ Darian B. Andersen
Name: Darian B. Andersen
Title: Secretary
<PAGE>
CERTIFICATE OF AMENDMENT OF
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF FOODBRANDS AMERICA, INC.
Foodbrands America, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of
the State of Delaware (the "DGCL"),
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of
Foodbrands America, Inc. (the "Corporation") on February 22,
1996, resolutions were duly adopted setting forth proposed
amendments of the Amended and Restated Certificate of
Incorporation of the Corporation, declaring said amendments to be
advisable and calling for such proposed amendments to be
presented at the annual meeting of the stockholders of the
Corporation to be held on May 21, 1996, for consideration
thereof. The resolution setting forth the proposed amendments is
as follows:
RESOLVED, that Sections 5.2, 5.4 and 5.7 of Article
Fifth are hereby amended, subject to stockholder approval, to
read as follows:
Section 5.2 Attempted Transfer in Violation of Transfer
Restriction. Unless approval of the Board of Directors is
obtained as provided in subsection (3) of Section 5.1 of this
Article Fifth, any attempted Transfer of shares of stock of the
Corporation in excess of the shares that could be Transferred to
the Transferee without restriction under subsection (2) of
Section 5.1 of this Article Fifth is not effective to Transfer
ownership of such excess shares (the "Prohibited Shares") to the
purposed acquiror thereof (the "Purposed Acquiror"), who shall
not be entitled to any rights as a Stockholder of the Corporation
with respect to the Prohibited Shares (including, without
limitation the right to vote or to receive dividends with respect
thereto). The transfer agent of the stock of the corporation
shall not recognize the purposed transfer of the Prohibited
Shares to the Purposed Acquiror. All rights with respect to the
Prohibited shares shall (i) be deemed to have been acquired in
equal amounts by the Charitable Organizations (as defined below)
and (ii) be transferred to a person nominated and appointed by
the Board of Directors from time to time (the "Agent") to act as
agent for the Charitable Organizations (in the absence of such
designation the Corporation shall act as Agent), until such time
as the Prohibited Shares are resold as set forth in subsection
(i) or subsection (2) of this Section 5.2. As agent, Agent shall
exercise all rights incident to ownership of the Prohibited
Shares. The Purported Acquiror, by acquiring ownership of shares
of stock of the Corporation that are not Prohibited Shares, shall
be deemed to have consented to all the provisions of this Article
Fifth and to have agreed to act as provided in the following
subsection (1). The Corporation, the Board of Directors and the
Agent shall be fully protected in relying in good faith upon the
information, opinions, reports or statements of the chief
executive officer, the chief financial officer, or the chief
accounting officer of the Corporation or of the Corporation's
legal counsel, independent auditors, transfer agent, investment
bankers, and other employees and agents in making the
determinations and findings contemplated by this Section 5.2, and
neither the Corporation, the Board of Directors nor the Agent
shall be responsible for any good faith errors made in connection
therewith.
(1) Upon demand by the Agent, the Purported Acquiror
shall transfer any certificate or other evidence of Purported
Acquiror's possession or control of the Prohibited Shares, along
with any dividends or other distributions paid by the Corporation
with respect to the Prohibited Shares that were received by the
Purported Acquiror (the "Prohibited Distributions"). If the
Purported Acquiror has sold the Prohibited Shares to an unrelated
party in an arms-length transaction after purportedly acquiring
them, the Purported Acquiror shall be deemed to have sold the
Prohibited Shares as agent for the Charitable Organizations, and
in lieu of transferring the Prohibited Shares and Prohibited
Distributions to the Agent shall transfer to the Agent the
Prohibited Distributions and the proceeds of such sale (the
"Resale Proceeds"), except to the extent that the Agent grants
written permission to the Purported Acquiror to retain a portion
of the Resale Proceeds not exceeding the amount that would have
been payable by the Agent to the Purported Acquiror pursuant to
the following subsection (2) if the Prohibited Shares had been
sold by the Agent rather than by the Purported Acquiror. Any
purported transfer of the Prohibited Shares by the Purported
Acquiror other than a transfer described in one of the two
preceding sentences shall not be effective to transfer any
ownership of the Prohibited Shares.
(2) The Agent shall sell in an arms-length transaction
(through the New York Stock Exchange, if possible) any Prohibited
Shares transferred to the Agent by the Purported Acquiror, and
the proceeds of such sale (the "Sale Proceeds"), or the Resale
Proceeds, if applicable, shall be allocated, after reimbursement
to the Agent of its expenses, to the Purported Acquiror up to the
following amount: (i) where applicable, the purported purchase
price paid or value of consideration surrendered by the Purported
Acquiror for the Prohibited Shares, or (ii) where the purported
Transfer of the Prohibited Shares to the Purported Acquiror was
by gift, inheritance, or any similar purported Transfer, the fair
market value of the Prohibited Shares at the time of such
purported Transfer. Subject to the succeeding provisions of this
subsection, any Resale Proceeds or Sales Proceeds in excess of
the Agent's expenses and the amount allocable to the Purported
Acquiror pursuant to the preceding sentence, together with any
Prohibited Distributions, shall be paid in equal shares to the
charitable organizations designated from time to time by the
Corporation that qualify as entities described in Section
501(c)(3) of the Code (the "Charitable Organizations"). In the
absence of such designation, the Agent shall designate one or
more Charitable Organizations, in its discretion, such that there
is a sufficient number of Charitable Organizations non of which
will own a Prohibited Ownership Percentage. In no event shall
any such amounts due to the Charitable Organizations inure to the
benefit of the Corporation or the Agent, but such amounts may be
used to cover expenses incurred by the Agent.
Section 5.4 Additional Actions to Prevent Violation
or Attempted Violation. Upon a determination by the Board of
Directors that there has been or is threatened a purported
Transfer of Prohibited Shares to a Purported Acquiror, the Board
of Directors may take such action in addition to any action
required by the preceding paragraph as it deems advisable to give
effect to the provisions of this Article Fifth, including,
without limitation, refusing to give effect on the books of this
Corporation to such purported Transfer or instituting proceedings
to enjoin such purported Transfer. Nothing herein shall preclude
the settlement of transactions entered into through the
facilities of the New York Stock Exchange.
Section 5.7 Further Actions. Subject to the
provisions of Section 5.4 of this Article Fifth, nothing
contained in this Article Fifth shall limit the authority of
the Board of Directors to take such other action to the extent
permitted by law as it deems necessary or advisable to protect
the corporation and the interest of the holders of its securities
in preserving the Tax Benefits. Without limiting the generality
of the foregoing, in the event of a change in law making one or
more of the following actions necessary or desirable or in the
event that the Board of Directors believes that such actions are
in the best interest of the Corporation and its Stockholders, the
Board of Directors may (i) accelerate or extend the Expiration
Date or modify the definitions of any terms set forth in this
Article Fifth; provided that the Board of Directors shall
determine in writing that such acceleration, extension change or
modification is reasonably necessary or desirable to preserve the
Tax Benefits under the Code and the regulations thereunder or
that the continuation of these restrictions is no longer
reasonably necessary for the preservation of the Tax Benefits,
which determination shall be based upon an opinion of legal
counsel to the Corporation and which determination shall be filed
with the Secretary of the Corporation and mailed by the Secretary
to the Stockholders of this Corporation within ten days after the
date of any such determination. In addition, the Board of
Directors may, to the extent permitted by law, from time to time
establish, modify, amend or rescind Bylaws, regulations and
procedures of the Corporation not inconsistent with the express
provisions of this Article Fifth for purposes of determining
whether any acquisition of stock of the Corporation would
jeopardize the Corporation's ability to preserve and use the Tax
Benefits, and for the orderly application, administration and
implementation of the provisions of this Article Fifth. Such
procedures and regulations shall be kept on file with the
Secretary of the Corporation and with its transfer agent and
shall be made available for inspection by the public and, upon
request, shall be mailed to any holder of stock of the
Corporation.
SECOND: That thereafter, pursuant to resolutions adopted by
the Corporation's Board of Directors, the annual meeting of the
stockholders of the Corporation was duly called and held,
upon notice in accordance with Section 222 of the DGCL, at which
meeting the necessary number of shares as required by statute and
in accordance with the Amended and Restated Certificate of
Incorporation were voted in favor of the amendment.
THIRD: That the amendment was duly adopted in accordance
with the provisions of Section 242 of the DGCL.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be executed by Bryant P. Bynum, its Vice
President, and attested by its Assistant Secretary, Jenna R.
Johnston, this 31st day of May, 1996.
FOODBRANDS AMERICA, INC.
By: /s/ Bryant P. Bynum
Bryant P. Bynum
Vice President
ATTEST:
/s/ Jenna R Johnston
Jenna R. Johnston
Assistant Secretary
AMENDED AND RESTATED BYLAWS
OF
FOODBRANDS AMERICA, INC.
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meeting. The Annual Meeting of
Stockholders of the Corporation shall be held at the registered
office of the Corporation in the City of Dover, State of
Delaware, or at such other place within or without the State of
Delaware, on the date and at the time fixed from time to time by
the Board of Directors and stated in the notice of meeting, for
the election of Directors and for the transaction of any other
proper business that may come before the meeting.
Section 2. Special Meetings. Special Meetings of the
Stockholders of the Corporation shall be called as provided in
the Corporation's Certificate of Incorporation, as such
Certificate may be amended from time to time.
Section 3. Notice of Meetings. Written notice of each
meeting of the Stockholders, stating the place, date and hour
thereof and, in the case of a Special Meeting, the purpose or
purposes for which it is called, shall be delivered personally or
mailed, not less then ten (10) nor more than sixty (60) days
before the date of such meeting (or at such other time as may be
required by statute), to each Stockholder of record entitled to
vote at such meeting. If mailed, such notice is deemed given
when deposited in the United States mail, postage prepaid,
directed to each Stockholder at his or her address as it appears
on the records of the Corporation.
Section 4. Waiver of Notice. Whenever notice is
required to be given of any Annual or Special Meeting of the
Stockholders, a written waiver thereof, signed by the person
entitled to notice, whether before or after the time stated in
such notice, shall be deemed equivalent to notice. Neither the
business to be transacted at, nor the purpose of, any Annual or
Special Meeting of the Stockholders need be specified in any
written waiver of notice. Attendance of a person at a meeting of
the Stockholders shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully
called or convened.
Section 5. Quorum. At any meeting of the Stockholders,
the presence, in person or by proxy, of the holders of a majority
of the issued and outstanding shares of the capital stock of the
Corporation entitled to vote at such meeting shall be necessary
in order to constitute a quorum for the transaction of any
business. If there shall not be a quorum at any meeting of the
Stockholders, the holders of a majority of the shares entitled to
vote present at such meeting, in person or by proxy, may adjourn
such meeting from time to time until holders of the amount of
shares required to constitute a quorum shall be present in person
or by proxy.
Section 6. Adjournment. When any meeting of the
Stockholders is adjourned to another time or place, notice need
not be given of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at
which the adjournment is taken. At the adjourned meeting any
business may be transacted which might have been transacted at
the original meeting. If the adjournment is for more than thirty
(30) days, or if after such adjournment the Board of Directors
shall fix a new record date for the adjourned meeting, a notice
of the adjourned meeting shall be given to each Stockholder of
record entitled to vote at such meeting.
Section 7. Voting. Each Stockholder shall be entitled
to one vote for each share of capital stock of the Corporation
held by such Stockholder. Voting shall be by written ballot
unless otherwise provided in the Certificate of Incorporation, as
such Certificate may be amended from time to time. Whenever any
corporate action is to be taken by vote of the Stockholders, it
shall, except as otherwise required by law or by the Certificate
of Incorporation, be authorized by a plurality of the votes cast
at a meeting of Stockholders at which a quorum is present by the
holders of shares entitled to vote thereon.
Section 8. Record Date.
(a) The Board of Directors may fix, in advance, a
record date, which shall not be more than sixty (60) nor less
than ten (10) days before the date of any meeting of
Stockholders, nor more than sixty (60) days prior to any other
action, as the record date for the purpose of determining the
Stockholders entitled to notice of or to vote at any meeting of
the Stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or distribution or
allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action.
(b) If no record date is fixed:
(1) The record date for determining Stockholders
entitled to notice of or to vote at a meeting of Stockholders
shall be at the close of business on the day next preceding the
day of notice, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held.
(2) The record date for determining Stockholders
for any other purpose shall be at the close of business on the
day on which the Board of Directors adopts the resolution
relating thereto.
Section 9. Proxies. Each Stockholder entitled to vote
at a meeting of Stockholders or to express consent or dissent to
corporate action in writing without a meeting may authorize
another person or persons to act for him or her by proxy, but no
such proxy shall be voted or acted upon after three (3) years
from its date, unless the proxy provides for a longer period.
ARTICLE II
DIRECTORS
Section 1. Number; Qualifications. The number of
directors which shall constitute the entire Board of Directors
shall not be less than nine (9) nor more than fifteen (15) and
shall consist of eleven (11) directors until, within the limits
specified above, a different number of directors shall be
established from time to time by resolution of the Board of
Directors, provided, that the total number of directors shall
always be an odd number and divided into classes in accordance
with the Corporation's Certificate of Incorporation.
Section 2. Term of Office. The term of office of each
Director shall be as set forth in the Corporation's Certificate
of Incorporation, as such Certificate may be amended from time
to time.
Section 3. Meetings. A meeting of the Board of
Directors shall be held for the election of Officers and for the
transaction of such other business as may come before such
meeting as soon as practicable after the Annual Meeting of the
Stockholders. Other regular meetings of the Board of Directors
may be held at such times and places as the Board of Directors
of the Corporation may from time to time determine. Special
Meetings of the Board of Directors may be called at any time by
the Chief Executive Officer or by a majority of the Directors
then in office. Meetings of the Board of Directors may be held
within or without the State of Delaware as the Board of Directors
may from time to time determine.
Section 4. Notice of Meetings; Waiver of Notice;
Adjournment. No notice need be given of the first meeting of the
Board of Directors after the Annual Meeting of Stockholders or of
any other regular meeting of the Board of Directors. Notice of a
Special Meeting of the Board of Directors, specifying the place,
date and hour thereof, shall be delivered personally, by mail, by
telegraph or telecopy, or by telephone to each Director at his or
her address as such address appears on the books of the
Corporation at least one (1) business day (Saturdays, Sundays
and legal holidays not being considered business days for the
purpose of these Bylaws) before the date of such meeting.
Whenever notice is required to be given under any provision of
the General Corporation Law of the State of Delaware or of the
Certificate of Incorporation or these Bylaws, a written waiver
thereof, signed by the person entitled to notice, whether before
or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a Director at a Special Meeting shall
constitute a waiver of notice of such meeting, except when the
Director attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any
business because the meeting was not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any
meeting of the Directors, or members of a committee of Directors,
need be specified in any written waiver of notice unless so
required by the Certificate of Incorporation or these Bylaws. A
majority of the Directors present, whether or not a quorum
is present, may adjourn any meeting to another time and place.
Notice need not be given of the adjourned meeting if the time and
place to which the meeting is adjourned are announced at the
meeting at which the adjournment is taken, and at the adjourned
meeting any business may be transacted that might have been
transacted at the original meeting.
Section 5. Quorum; Voting. A majority of the entire
Board of Directors shall constitute a quorum for the transaction
of business at a meeting of the Board of Directors. The vote of
the majority of the Directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.
The Board of Directors may select one of its number to serve as
Chairman of the Board.
Section 6. Participation by Telephone. Members of the
Board of Directors, or any committee thereof, may participate in
a meeting of the Board of Directors or such committee, as the
case may be, by means of a conference telephone call or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and
participation in a meeting by such means shall constitute
presence in person at such meeting.
Section 7. Action Without a Meeting. Any action
required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a
meeting if all members of the Board of Directors or such
committee, as the case may be, consent thereto in writing, and
such writing or writings are filed with the minutes of
proceedings of the Board of Directors or of such committee.
Section 8. Committees. The Board of Directors, by
resolution passed by a majority of the entire Board of Directors,
may designate one or more committees, each committee to consist
of one or more of the directors. At the option of the Investor
(as defined in Article II, Section 10 below), at least one (1)
Director who is an Investor Designee (as defined in the
Agreement) shall be appointed to serve on each committee of the
Board, other than committees appointed for the special purpose of
considering transactions with the Investor or any Investor
Affiliate (as defined in the Agreement). All actions taken by
the Board of Directors shall be recommendations that shall be
submitted to the full Board of Directors for approval unless,
prior to such action being taken, the Board of Directors has
adopted a resolution expressly delegating to the committee the
power to take the action in question. The Board of Directors may
designate one or more directors as alternate members of any such
committee, who may replace any absent or disqualified member at
any meeting of such committee.
Section 9. Removal; Resignation. Any Director or the
entire Board of Directors may be removed with cause by the
holders of a majority of the shares of capital stock of the
Corporation then entitled to vote at any election of Directors;
provided, however, that if any inside director who is an officer
of the Corporation at the time of his or her appointment is no
longer serving in his or her position as an officer of the
Corporation, such event shall be deemed cause for removal. Any
Director may resign at any time, upon written notice to the
Corporation.
Section 10. Vacancies. Any vacancy created by the
resignation, death or removal of a director, or by a director
declining to stand for re-election or a director not being
renominated for re-election, shall be filled by (a) the vote of a
majority of the Investor Designees (as defined in that certain
Stock Purchase Agreement (the "Agreement") dated February 16,
1993, between the Corporation and Joseph Littlejohn & Levy Fund,
L.P. (the "Investor")) then in office, if such director was an
Investor Designee, or (b) the vote of a majority of the
NonInvestor Directors (as defined in the Agreement) then in
office, if such director was a NonInvestor Director, or (c)
another Airlie Designee (as defined in that certain Stockholders
Agreement dated March 22, 1993, between the Corporation and The
Airlie Group, L.P.) who is approved by the affirmative vote of
both a majority of the Directors who are Investor Designees and a
majority of the NonInvestor Directors, if such director was an
Airlie Designee, or (d) by the affirmative vote of both a
majority of the Directors who are Investor Designees and a
majority of the NonInvestor Directors, if such director was the
Independent Director (as defined in the Agreement) other than the
Airlie Designee. A director elected to fill a vacancy shall hold
office for the unexpired term of his or her predecessor. In the
event the number of directors is increased, additional directors
shall be elected as Investor Designees and NonInvestor Directors
by the Investor Designees and NonInvestor Directors,
respectively, then in office, to fill the vacancies created by
the increase in the number of directors so that thereafter the
number of Investor Designees shall equal that number that the
Investor would otherwise have the right to nominate at such time
pursuant to the Agreement.
Section 11. Compensation. The Board of Directors may
fix the compensation of Directors.
ARTICLE III
OFFICERS
Section 1. Election; Qualifications. At the first
meeting of the Board of Directors and as soon as practicable
after each Annual Meeting of Stockholders, the Board of Directors
shall elect or appoint a President, one or more Vice Presidents,
a Secretary, and a Treasurer, and may elect or appoint at such
time or from time to time such additional Officers as it deems
advisable. No Officer need be a Director of the Corporation.
Any number of offices may be held by the same person, except that
there shall always be two (2) persons who hold offices which
entitle them to sign instruments and stock certificates.
Section 2. Term of Office; Vacancies. Each Officer
shall hold office until the election and qualification of his or
her successor or until his or her earlier death, resignation or
removal. Any vacancy occurring in any office, whether because of
death, resignation or removal, with or without cause, or
otherwise, shall be filled by the Board of Directors.
Section 3. Removal; Resignation. Any Officer may be
removed from office at any time with or without cause by vote of
a majority of the Board of Directors. Any Officer may resign his
or her office at any time upon written notice to the Corporation.
Section 4. Powers and Duties of President. Unless the
Board of Directors has appointed a Chairman, the President shall
(i) be the Chief Executive Officer of the Corporation and shall
have general charge and supervision of its business, affairs,
administration and operations, (ii) from time to time make such
reports concerning the Corporation as the Board of Directors of
the Corporation may require, (iii) preside at all meetings of the
Stockholders and the Board of Directors and (iv) have such other
powers and shall perform such other duties as may from time to
time be assigned to him or her by the Board of Directors. If a
Chairman has been appointed, the President shall have such powers
and perform such duties as may from time to time be assigned to
him or her by the Board of Directors, and shall, in the absence
of the Chairman, perform the duties and exercise the powers of
the Chairman.
Section 5. Powers and Duties of Vice Presidents. Each
Vice President shall be given such titles and designations and
shall have such powers and perform such duties as may from time
to time be assigned to him or her by the Board of Directors.
Section 6. Powers and Duties of the Secretary. The
Secretary shall record and keep the minutes of all meetings of
the Stockholders and of the Board of Directors in a book to be
kept for that purpose. The Secretary shall attend to the giving
and serving of all notices by the Corporation. The Secretary
shall be the custodian of, and shall make or cause to be made the
proper entries in, the minute book of the Corporation and such
other books and records as the Board of Directors may direct.
The Secretary shall be the custodian of the corporate seal for
the Corporation and shall affix or cause to be affixed such seal
to such contracts and other instruments as the Board of Directors
may direct. The Secretary shall have such other powers and shall
perform such other duties as may from time to time be assigned to
him or her by the Board of Directors.
Section 7. Powers and Duties of the Treasurer. The
Treasurer shall be the custodian of all funds and securities of
the Corporation. Whenever required by the Board of Directors,
the Treasurer shall render a statement of the Corporation's cash
and other accounts, and shall cause to be entered regularly in
the proper books and records of the Corporation to be kept for
such purpose full and accurate accounts of the Corporation's
receipts and disbursements. The Treasurer shall at all
reasonable times exhibit the Corporation's books and accounts to
any Director of the Corporation upon application at the principal
office of the Corporation during business hours. The Treasurer
shall have such other powers and shall perform such other duties
as may from time to time be assigned to him or her by the Board
of Directors.
Section 8. Powers and Duties of Assistant Secretary and
Assistant Treasurer. The Assistant Secretary and Assistant
Treasurer (or in the event there be more than one Assistant
Secretary or Assistant Treasurer, in the order of their
seniority, designation or election) shall, in the absence or
disability of the Secretary or Treasurer, respectively, perform
the duties and exercise the powers of the Secretary or Treasurer
and shall perform such other duties as the President or the Board
of Directors shall prescribe.
Section 9. Delegation. In the event of the absence of
any Officer of the Corporation or for any other reason that the
Board of Directors may deem sufficient, the Board of Directors
may at any time or from time to time delegate all or any part of
the powers or duties of any Officer to any other Officer or
Officers or to any Director or Directors.
ARTICLE IV
STOCK
The shares of the Corporation shall be represented by
certificates in such form as the Board of Directors may from time
to time prescribe, signed by the President or Vice President
and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary. Any or all of the signatures on the
certificates may be a facsimile.
ARTICLE V
EXECUTION OF DOCUMENTS
All contracts, agreements, instruments, bills payable,
notes, checks, drafts, warrants or other obligations of the
Corporation shall be made in the name of the Corporation and
shall be signed by such Officer or Officers as the Board of
Directors may from time to time designate. In the absence of
such designation the signature of the President shall suffice.
ARTICLE VI
SEAL
The seal of the Corporation shall contain the name of
the Corporation, the words "Corporate Seal," the year of its
organization, and the word "Delaware."
ARTICLE VII
FISCAL YEAR
The fiscal year of the Corporation shall begin and end
on such days as the Board of Directors shall from time to time
determine.
ARTICLE VIII
INDEMNIFICATION
The Corporation shall indemnify all Directors, Officers,
employees, or agents to the full extent as provided in the
Corporation's Certificate of Incorporation, as such Certificate
may be amended from time to time.
ARTICLE IX
AMENDMENT OF BYLAWS
These Bylaws may be amended or repealed, and any new
Bylaws may be adopted, by the Stockholders entitled to vote or by
the Board of Directors.
6/24/96
FOODBRANDS AMERICA, INC.
(formerly known as Doskocil Companies Incorporated)
1992 STOCK INCENTIVE PLAN
As amended 5/16/96
TABLE OF CONTENTS
ARTICLE I -- PURPOSE . . . . . . . . . . . . . . . . . . . . 1
Section I.1 Purpose . . . . . . . . . . . . . . . . . 1
Section I.2 Establishment . . . . . . . . . . . . . . 1
ARTICLE II -- DEFINITIONS . . . . . . . . . . . . . . . . . 1
ARTICLE III -- ADMINISTRATION . . . . . . . . . . . . . . . 4
Section III.1 Administration by Committee . . . . . . 4
Section III.2 Committee to Make Rules and Interpret Plan 5
Section III.3 Committee Members Ineligible . . . . . . 5
ARTICLE IV -- GRANT OF AWARDS; SHARES SUBJECT
TO THE PLAN . . . . . . . . . . . . . . . . . 5
Section IV.1 Committee to Grant Awards . . . . . . . . 5
Section IV.2 Six-Month Holding Period . . . . . . . . 6
ARTICLE V -- ELIGIBILITY . . . . . . . . . . . . . . . . . . 6
Section V.1 Eligible Employees . . . . . . . . . . . . 6
ARTICLE VI -- STOCK OPTIONS . . . . . . . . . . . . . . . . 7
Section VI.1 Grant of Options . . . . . . . . . . . . 7
Section VI.2 Conditions of Options . . . . . . . . . . 7
Section VI.3 Options to Non-Employee Directors . . . . 9
ARTICLE VII -- PERFORMANCE SHARE AWARD . . . . . . . . . . . 10
Section VII.1 Grant of Performance Share Awards . . . 10
Section VII.2 Conditions of Performance Share Awards . 11
ARTICLE VIII -- RESTRICTED STOCK AWARDS . . . . . . . . . . 12
Section VIII.1 Grant of Restricted Stock Awards . . . 12
Section VIII.2 Conditions of Restricted Stock Awards . 12
ARTICLE IX -- OTHER INCENTIVE AWARDS . . . . . . . . . . . . 13
Section IX.1 Grant of Other Incentive Awards . . . . . 13
Section IX.2 Conditions of Other Incentive Awards . . 13
ARTICLE X -- STOCK ADJUSTMENTS . . . . . . . . . . . . . . . 13
Section X.1 Adjustment of Shares Available;
Recapitalization . . . . . . . . . . . . . 13
ARTICLE XI -- GENERAL . . . . . . . . . . . . . . . . . . . 14
Section XI.1 Amendment or Termination of Plan . . . . 14
Section XI.2 Dividends and Dividend Equivalents . . . 15
Section XI.3 Termination of Employment . . . . . . . 15
Section XI.4 Nonassignability . . . . . . . . . . . . 15
Section XI.5 Withholding Taxes . . . . . . . . . . . 16
Section XI.6 Forfeiture . . . . . . . . . . . . . . . 16
Section XI.7 Change of Control . . . . . . . . . . . 16
Section XI.8 Amendments to Awards . . . . . . . . . . 17
Section XI.9 Regulatory Approval and Listings . . . . 17
Section XI.10 Right to Continued Employment . . . . . 17
Section XI.11 Beneficiaries . . . . . . . . . . . . . 17
Section XI.12 Indemnification . . . . . . . . . . . . 18
Section XI.13 Reliance on Reports . . . . . . . . . . 18
Section XI.14 Relationship to Other Benefits . . . . . 18
Section XI.15 Expenses . . . . . . . . . . . . . . . . 18
Section XI.16 Construction . . . . . . . . . . . . . . 18
Section XI.17 Governing Law . . . . . . . . . . . . . 18
ARTICLE I
PURPOSE
Section I.1 Purpose. This Stock Incentive Plan is
established by Foodbrands America, Inc. (formerly known as
Doskocil Companies Incorporated) (the "Corporation") to create
incentives which are designed to motivate participants to put
forth maximum effort toward the success and growth of the
Corporation and to enable the Corporation to attract and retain
experienced individuals who by their position, ability and
diligence are able to make important contributions to the
Corporation's success. Toward these objectives, the Plan
provides for the granting of Options, Restricted Stock Awards,
Performance Share Awards and/or Other Incentive Awards to
Participants on the terms and subject to the conditions set forth
in the Plan.
Section I.2 Establishment. The Plan is effective as
of January 1, 1992 (the "Effective Date"), and subject to the
provisions of Section XI.1, Awards (as defined in Section II.1)
may be made as provided herein for a period of 10 years after
such date.
The Plan shall be approved by the holders of a majority
of the outstanding shares of Common Stock, which approval must
occur within the period ending twelve months after the date the
Plan is adopted by the Board. Pending such approval by the
shareholders, Awards under the Plan may be granted to Eligible
Employees (as defined in Section II.10), including persons who
are, or within the preceding six months have been, Insider
Participants (as defined in Section IV.2), but no such Awards may
be exercised or transferred prior to receipt of shareholder
approval. In the event shareholder approval is not obtained
within such twelve-month period, all such Awards shall be void.
The Plan shall continue in effect until all matters
relating to the payment of Awards and administration of the Plan
have been settled.
ARTICLE II
DEFINITIONS
Section II.1 "Award" means, individually, collectively
or in tandem, any Option, Restricted Stock Award, Performance
Share Award, or Other Incentive Award granted under the Plan to a
Participant by the Committee pursuant to such terms, conditions,
restrictions, and/or limitations, if any, as the Committee may
establish by the Award Notice or otherwise.
Section II.2 "Award Notice" means any written
instrument that establishes the terms, conditions, restrictions,
and/or limitations applicable to an Award in addition to those
established by this Plan and by the Committee's exercise of its
administrative powers.
Section II.3 "Board" means the Board of Directors of
the Corporation.
Section II.4 "Change of Control Event" means each of
the following:
(a) A change in shareholder ownership of the
Corporation, whereby a person or company, or a group of
affiliated persons or companies, acquires a sufficiently large
block of Common Stock, which, when voted together with the shares
of Common Stock of all other shareholders of the Corporation
whose proxies or written consents are solicited by such person,
company or group without the benefit of a management-supported
proxy statement at any meeting of the shareholders of the
Corporation, would enable such person or company or group of
affiliated persons or companies to elect a majority of the
members of the Board;
(b) A merger or consolidation of the Corporation
with and into another company, other than with or into a
wholly-owned Subsidiary of the Corporation, where the Corporation
is not the surviving company; or the Corporation is the surviving
company and the members of the Board immediately prior to the
merger or consolidation do not constitute a majority of the Board
of the surviving company after the merger or consolidation;
(c) Whether such transaction results in a Change
of Control Event pursuant to subparagraphs (a) or (b) above or
not, the following events shall be deemed a Change of Control
Event: (i) a transaction or series of transactions pursuant to
which Joseph Littlejohn & Levy Fund, L.P., transfer all of its
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) in the capital stock of the Corporation to
any other person or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act), or (ii) all of the outstanding
capital stock of the Corporation is acquired by any person or
group in one or more related transactions; or
(d) Any other kind of a corporate reorganization
or takeover where: (i) the Corporation is not the surviving
company; or the Corporation is the surviving company and the
members of the Board immediately prior to the reorganization do
not constitute a majority of the Board of Directors of the
surviving company.
With respect to the events described in subparagraphs
(b), (c) and (d) above, the Change of Control Event shall be
deemed to occur on the later of the transaction described in such
subparagraph or a shareholder vote approving such a transaction.
Section II.5 "Code" means the Internal Revenue Code of
1986. Reference in the Plan to any section of the Code shall be
deemed to include any amendments or successor provisions to such
section and any regulations under such section.
Section II.6 "Committee" means the Compensation
Committee of the Board, or such other committee designated by the
Board, authorized to administer the Plan under Article III
hereof. The Committee shall consist of not less than two
members, each of whom is, and within the twelve (12) months
preceding his or her appointment to the Committee has been, a
"disinterested person" within the meaning of Rule 16b-3
promulgated under Section 16 of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
Section II.7 "Common Stock" means the common stock,
par value $.01 per share, of the Corporation, and after
substitution, such other stock as shall be substituted therefor
as provided in Article X.
Section II.8 "Date of Grant" means the date on which
the granting of an Award is authorized by the Committee or such
later date as may be specified by the Committee in such
authorization.
Section II.9 "Director Options" means non-qualified
Options awarded under Section VI.3.
Section II.10 "Eligible Employee" means any employee
of the Corporation or a Subsidiary, or an individual who
satisfies the requirements of Section VI.3.
Section II.11 "Fair Market Value" means (A) during any
such time as the Common Stock is not listed upon an established
stock exchange or the NASDAQ/National Market System, the mean
between dealer "bid" and "ask" prices of the Common Stock in the
over-the-counter market on the day for which such value is to be
determined, as reported by the National Association of Securities
Dealers, Inc. or (B) during such time as the Common Stock is
listed upon an established stock exchange or exchanges or the
NASDAQ/National Market System, the highest closing price of the
Common Stock on such stock exchange or exchanges or the
NASDAQ/National Market System on the day for which such value is
to be determined, or if no sale of the Common Stock shall have
been made on any stock exchange or the NASDAQ/National Market
System that day, on the next preceding day on which there was a
sale of such Common Stock.
Section II.12 "Incentive Stock Option" means an Option
within the meaning of Section 422 of the Code.
Section II.13 "Other Incentive Award" means an Award
granted under Article IX of the Plan.
Section II.14 "Option" means an Award granted under
Article VI of the Plan and includes both non-qualified Options
and Incentive Stock Options to purchase shares of Common Stock.
Section II.15 "Participant" means an Eligible Employee
of the Corporation or a Subsidiary to whom an Award has been
granted by the Committee under the Plan.
Section II.16 "Performance Share Award" means an Award
granted under Article VII of the Plan.
Section II.17 "Plan" means the Foodbrands America,
Inc. 1992 Stock Incentive Plan.
Section II.18 "Restricted Stock Award" means an Award
granted under Article VIII of the Plan.
Section II.19 "Subsidiary" means any corporation of
which a majority of the outstanding voting stock or voting power
is beneficially owned directly or indirectly by the Corporation.
ARTICLE III
ADMINISTRATION
Section III.1 Administration by Committee. The
Committee shall administer the Plan. Unless otherwise provided
in the by-laws of the Corporation or the resolutions adopted
from time to time by the Board establishing the Committee, the
Board may from time to time remove members from, or add members
to, the Committee; vacancies on the Committee, howsoever caused,
shall be filled by the Board; the Committee shall hold meetings
at such times and places as it may determine; a majority of the
Committee shall constitute a quorum; and the acts of a majority
of the members present at any meeting at which a quorum is
present or acts reduced to or approved in writing by a majority
of the members of the Committee shall be the valid acts of the
Committee.
Subject to the provisions of the Plan, the Committee
shall have exclusive power to:
(a) Select the Eligible Employees to participate
in the Plan.
(b) Determine the time or times when Awards will
be made.
(c) Determine the form of an Award, whether an
Option, a Restricted Stock Award, a Performance Share Award, or
Other Incentive Award established by the Committee in accordance
with Article IX below, the number of shares of Common Stock
subject to the Award or with reference to which the Award is
determined, all the terms, conditions (including performance
requirements), restrictions and/or limitations, if any, of an
Award, including the time and conditions of exercise or vesting,
and the terms of any Award Notice, which may include the waiver
or amendment of prior terms and conditions or acceleration or
early vesting or payment of an Award under certain circumstances
determined by the Committee.
(d) Determine whether Awards will be granted
singly, in combination or in tandem.
(e) Grant waivers of Plan terms, conditions,
restrictions, and limitations.
(f) Accelerate the vesting, exercise, or payment
of an Award or the performance period of an Award when such
action or actions would be in the best interest of the
Corporation.
(g) Take any and all other action it deems
necessary or advisable for the proper operation or administration
of the Plan.
In exercising the foregoing powers, the Committee shall
seek the recommendation of the Chief Executive Officer of the
Corporation or his delegate.
Section III.2 Committee to Make Rules and Interpret
Plan. The Committee shall have the authority, subject to the
provisions of the Plan, to establish, adopt, or revise such
rules and regulations and to make all such determinations
relating to the Plan as it may deem necessary or advisable for
the administration of the Plan. The Committee's interpretation
of the Plan or any Awards granted pursuant thereto and all
decisions and determinations by the Committee with respect to the
Plan shall be final, binding, and conclusive on all parties
unless otherwise determined by the Board.
Section III.3 Committee Members Ineligible. No
Committee member shall be eligible to participate in the Plan
except to the extent set forth in Section VI.3.
ARTICLE IV
GRANT OF AWARDS; SHARES
SUBJECT TO THE PLAN
Section IV.1 Committee to Grant Awards. The Committee
may, from time to time, grant Awards to one or more Eligible
Employees, provided, however, that:
(a) Subject to Article X, the aggregate number of
shares of Common Stock made subject to Awards may not exceed
1,900,000 and the aggregate number of shares of Common Stock made
subject to the Award of Options to any Participant in any fiscal
year of the Corporation may not exceed 150,000.
(b) Any shares of Common Stock related to Awards
which terminate by expiration, forfeiture, cancellation or
otherwise without the issuance of shares of Common Stock, are
settled in cash in lieu of Common Stock, or are exchanged in the
Committee's discretion for Awards not involving Common Stock,
shall be available again for grant under the Plan, so long as the
holder of any such Award received no benefits of Common Stock
ownership (including but not limited to dividends) from the
shares of Common Stock related to such Award.
(c) Any shares of Common Stock issued by the
Corporation through the assumption or substitution of outstanding
grants from an acquired company shall reduce the shares available
for grants under the Plan.
(d) Common Stock delivered by the Corporation in
payment of any Award under the Plan may be authorized and
unissued Common Stock or Common Stock held in the treasury of the
Corporation or may be purchased on the open market or by private
purchase.
(e) The Committee shall, in its sole discretion,
determine the manner in which fractional shares arising under
this Plan shall be treated.
Section IV.2 Six-Month Holding Period. With respect
to Awards granted hereunder to any Participant who is, or within
the preceding six months was, subject to the provisions of
Section 16 of the Exchange Act (an "Insider Participant"), each
such Award which is an equity security must be held and not
transferred by such Insider Participant for a period of six
months from the Date of Grant. Nothing in this Section IV.2
shall be deemed to prohibit the exercise of Options within the
six (6) month period following the Date of Grant, but the shares
of Common Stock received by an Insider Participant pursuant to
the exercise of an Option must be held and not transferred for a
period of six months from the Date of Grant of the Option so
exercised.
ARTICLE V
ELIGIBILITY
Section V.1 Eligible Employees. Those persons who
shall be eligible to receive Awards under the Plan shall be such
employees (including officers, whether or not they are
directors) of the Corporation or its Subsidiaries as the
Committee shall select from time to time. Directors who are not
employees of the Corporation or its Subsidiaries ("Non-Employee
Directors") may also participate in the Plan, but only to the
extent set forth in Section VI.3 hereof.
Subject to the provisions of the Plan, the Committee
shall, from time to time, select from the Eligible Employees
those to whom Awards shall be granted and shall determine the
type or types of Awards to be made and shall establish in the
related Award Notices the terms, conditions, restrictions and/or
limitations, if any, applicable to the Awards in addition to
those set forth in the Plan and the administrative rules and
regulations issued by the Committee.
ARTICLE VI
STOCK OPTIONS
Section VI.1 Grant of Options. The Committee may,
from time to time, subject to the provisions of the Plan and such
other terms and conditions as it may determine, grant Options to
Eligible Employees. These Options may be Incentive Stock Options
or non-qualified Options, or a combination of both. Each grant
of an Option shall be evidenced by an Award Notice executed by
the Corporation and the Participant, and shall contain such terms
and conditions and be in such form as the Committee may from time
to time approve, subject to the requirements of Section VI.2.
Section VI.2 Conditions of Options. Each Option so
granted shall be subject to the following conditions:
(a) Exercise price. As limited by Section
VI.2(e) below, each Option shall state the exercise price which
shall be set by the Committee at the Date of Grant.
(b) Form of payment. The exercise price of an
Option may be paid (i) in cash or by check, bank draft or money
order payable to the order of the Corporation; (ii) in shares of
Common Stock or shares of Restricted Stock as to which
restrictions have lapsed; (iii) a combination of the foregoing;
or (iv) such other consideration as the Committee may deem
appropriate. In addition to the foregoing, subject to the
discretion of the Committee, any Option granted under the Plan
may be exercised by a broker-dealer acting on behalf of a
Participant if (A) the broker-dealer has received from the
Participant or the Corporation a fully- and duly-endorsed
agreement evidencing such Option and instructions signed by the
Participant requesting the Corporation to deliver the shares of
Common Stock subject to such Option to the broker-dealer on
behalf of the Participant and specifying the account into which
such shares should be deposited, (B) adequate provision has been
made with respect to the payment of any withholding taxes due
upon such exercise or, in the case of an Incentive Stock Option,
upon the disposition of such shares and (C) the broker-dealer and
the Participant have otherwise complied with Section 220.3(e)(4)
of Regulation T, 12 CFR, Part 220 and any successor rules and
regulations applicable to such exercise ("Cashless Exercise");
provided, however, that an Insider Participant may not elect to
utilize a Cashless Exercise within six (6) months of the date the
Option is granted (unless death or disability occurs prior to the
expiration of such six-month period), and any such election must
be made during any period beginning on the third business day
following the date of release of a summary statement of the
Corporation's quarterly or annual sales and earnings and ending
on the twelfth business day following such date (the "Window
Period"). The Committee shall establish appropriate methods for
accepting Common Stock, whether restricted or unrestricted, and
may impose such conditions as it deems appropriate on the use of
such Common Stock in payment of the exercise price. Common Stock
used to exercise an Option shall be valued at its then Fair
Market Value.
(c) Exercise of Options. Options granted under
the Plan shall be exercisable, in whole or in such installments
and at such times, and shall expire at such time, as shall be
provided by the Committee in the Award Notice. Exercise of an
Option shall be by written notice stating the election to
exercise in the form and manner determined by the Committee.
Every share of Common Stock acquired through the exercise of an
Option shall be deemed to be fully paid at the time of exercise
and payment of the exercise price.
(d) Other terms and conditions. Among other
conditions that may be imposed by the Committee, if deemed
appropriate, are those relating to (i) the period or periods and
the conditions of exercisability of any Option; (ii) the minimum
periods during which Participants must be employed by the
Corporation or its Subsidiaries, or must hold Options before they
may be exercised; (iii) the minimum periods during which shares
acquired upon exercise must be held before sale or transfer shall
be permitted; (iv) conditions under which such Options or shares
may be subject to forfeiture; and (v) the frequency of exercise
or the minimum or maximum number of shares that may be acquired
at any one time.
(e) Special Restrictions Relating to Incentive
Stock Options. Options issued in the form of Incentive Stock
Options shall, in addition to being subject to all applicable
terms, conditions, restrictions and/or limitations established by
the Committee, comply with the requirements of Section 422 of the
Code (or any successor section thereto), including, without
limitation, the requirement that the exercise price of an
Incentive Stock Option not be less than 100% of the Fair Market
Value of the Common Stock on the Date of Grant, the requirement
that each Incentive Stock Option, unless sooner exercised,
terminated or cancelled, expire no later than ten (10) years from
its Date of Grant, and the requirement that the aggregate Fair
Market Value (determined on the Date of Grant) of the Common
Stock with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any
calendar year (under this Plan or any other plan of the
Corporation or any Subsidiary) not exceed $100,000.
(f) Application of funds. The proceeds received
by the Corporation from the sale of Common Stock pursuant to
Options will be used for general corporate purposes.
Section VI.3 Options to Non-Employee Directors.
Notwithstanding any other provision herein, no Awards shall be
granted hereunder to Non-Employee Directors other than the
Director Options granted pursuant to this Section VI.3.
An Option to purchase 5,000 shares of Common Stock
shall be automatically granted under the Plan to each person who
is a Non-Employee Director on the date the Plan is approved and
adopted by the Board, and any individual who becomes a
Non-Employee Director subsequent to such date shall be granted an
Option to purchase 5,000 shares of the Common Stock on the date
he or she becomes a Non-Employee Director.
Each Director Option shall be evidenced by an Award
Notice executed by the Corporation and the Non-Employee Director,
and shall include the following terms and provisions:
(a) Each Director Option shall become exercisable
with respect to one-third of the shares of Common Stock to which
it relates on each of the first three anniversaries of the Date
of Grant so long as the Non-Employee Director remains a director
at such time. The Option exercise price per share shall be equal
to the Fair Market Value of one such share on the date the
Director Option is granted. The period within which each Option
may be exercised shall expire six (6) years from the date the
option is granted (the "Option Period"), unless ended sooner due
to termination of service or death of the optionee, or if fully
exercised prior to the end of such six (6) year period. No
Director Options shall be granted hereunder after the ten-year
anniversary of the Effective Date.
(b) If the directorship of an optionee is
terminated within the Option Period for any reason other than (i)
death of the optionee or (ii) on account of any act of fraud,
intentional misrepresentation, embezzlement, misappropriation, or
conversion of assets or opportunities of the Corporation or any
of its Subsidiaries, the Director Option may be exercised, to the
extent the optionee was able to do so at the date of termination
of the directorship, within three months after such termination
(if otherwise within the Option Period).
(c) If an optionee dies during the Option Period
while a director of the Corporation, or if an optionee dies
within three months of serving as a Non-Employee Director, the
Option may be exercised, to the extent the optionee was entitled
to exercise such Option at the date of his or her death, within
one year after such death (if otherwise within the Option
Period), by the executor or the administrator of the estate of
the optionee, or by the person or persons who shall have acquired
the Option directly from the optionee by a bequest or an
inheritance.
(d) If the directorship of the optionee is
terminated within the Option Period for any of the reasons
enumerated in Section VI.3(b)(ii), the Director Option shall
automatically terminate as of the date of termination of such
directorship.
(e) Payment of the exercise price shall be made
in full, at the election of the Non-Employee Director, in cash,
by check, bank draft or money order payable to the order of the
Corporation concurrently with the exercise of the Director
Option, or by Cashless Exercise; provided, however, that such
election to utilize Cashless Exercise may not be made within six
(6) months of the Date of Grant of such Director Option, and must
be made during the Window Period.
(f) Such Director Options shall be
nontransferable by the optionee other than by will or the laws of
descent and distribution, or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the
Employees Retirement Income Security Act, and shall be
exercisable during the optionee's lifetime only by the optionee
or the optionee's guardian or legal representative.
(g) Upon the termination of the directorship of
an optionee for any reason other than specified in Section
VI.3(b)(ii) within the two (2) year period following the
occurrence of a Change of Control Event, all Director Options
held by such optionee shall be deemed to be immediately
exercisable and the Corporation shall, within the three (3) month
period immediately following such termination, permit the
exercise of Director Options granted hereunder.
ARTICLE VII
PERFORMANCE SHARE AWARD
Section VII.1 Grant of Performance Share Awards.
Grants of Performance Share Awards may be made by the Committee
to any Eligible Employee during the term of the Plan. Each
Performance Share Award shall represent one share of Common
Stock. Each Performance Share Award shall be evidenced by an
Award Notice. There may be more than one award in existence at
any one time for any Participant and performance periods for
separate Performance Share Awards need not be identical.
The Performance Shares will be paid out in full or in
part on the basis of the performance of the Corporation following
the beginning of the Corporation's fiscal year in which the
Performance Share Award is made as hereinafter set forth. In
determining the size of Performance Share Awards, the Committee
shall take into account a Participant's responsibility level,
performance, potential, and cash compensation level, as well as
such other considerations as it deems appropriate. If any
Performance Share Award granted under the Plan shall be
forfeited, cancelled, or not paid out in full, such Performance
Share Award may again be granted under the Plan in accordance
with Article VII.
Section VII.2 Conditions of Performance Share Awards.
A Performance Share Award shall be subject to the following terms
and conditions:
(a) Performance Share Account. Performance Share
Awards shall be credited to a Performance Share account to be
maintained for each holder. Each Performance Share Award shall
be deemed to be the equivalent of one share of Common Stock of
the Corporation. A Performance Share Award under the Plan shall
not entitle the holder to any interest in or to any dividend,
voting, or other rights of a shareholder. The value of the
Performance Shares in a holder's Performance Share account at the
time of Award or the time of payment shall be the Fair Market
Value at any such time of an equivalent number of shares of the
Common Stock.
(b) Performance Period and Criteria. Performance
Shares shall be contingent upon the attainment during a
performance period of certain performance objectives. The length
of the performance period for each Performance Share Award, the
performance objectives to be achieved during the Performance
Share Award period, and the measure of whether and to what degree
such objectives have been attained shall be conclusively
determined by the Committee in the exercise of its discretion.
The Committee may revise performance objectives at such times as
it deems appropriate during the Performance Share Award period in
order to take into account or into consideration any unforeseen
events or changes in circumstances; provided,however, that any
such revision which is adverse to the holder of a Performance
Share Award shall require the holder's consent.
(c) Payment of Award. Following the end of the
Performance Share Award period, the holder of a Performance Share
Award shall be entitled to receive payment of an amount based on
the achievement of the performance measures for such Performance
Share Award period. In the event that a recipient of a
Performance Share Award is, or within the preceding six (6)
months has been, an Insider Participant, no Performance Share
Award shall be payable within the first six (6) months from the
Date of Grant of such Performance Share Award. The payment to
which a holder of a Performance Share Award shall be entitled at
the end of a Performance Share Award period shall be a dollar
amount equal to the Fair Market Value of the number of shares of
Common Stock equal to the number of Performance Shares earned and
payable to such holder.
The Committee may authorize payment of a
Performance Share Award in any combination of cash and shares of
Common Stock or all in cash or all in Common Stock, as it deems
appropriate, provided, however, that in the event a payee is, or
within the preceding six (6) months has been, an Insider
Participant, no cash payment may be made to such person except
during any period beginning on the third business day following
the date of release of a summary statement of the Corporation's
quarterly or annual sales and earnings and ending on the twelfth
business day following such date. Such shares may include any
restrictions on transfer and forfeiture provisions as the
Committee, from time to time, deems appropriate.
(d) Additional Terms and Conditions. The
Committee may, by way of the Award Notice or otherwise, determine
such other terms, conditions, restrictions and/or limitations, if
any, of any Performance Share Award, provided they are not
inconsistent with the Plan.
ARTICLE VIII
RESTRICTED STOCK AWARDS
Section VIII.1 Grant of Restricted Stock Awards. The
Committee may grant a Restricted Stock Award to any Eligible
Employee. Restricted Stock Awards shall be awarded in such
number and at such times during the term of the Plan as the
Committee shall determine. Each Restricted Stock Award may be
evidenced in such manner as the Committee deems appropriate,
including, without limitation, book-entry registration or
issuance of a stock certificate or certificates, and by an Award
Notice setting forth the terms of such Restricted Stock Award.
Section VIII.2 Conditions of Restricted Stock Awards.
The grant of a Restricted Stock Award shall be subject to the
following:
(a) Restriction period. Vesting of each
Restricted Stock Award shall require the holder to remain in the
employment of the Corporation or a Subsidiary for a prescribed
period (a "Restriction Period"). The Committee shall determine
the Restriction Period or Periods which shall apply to the shares
of Common Stock covered by each Restricted Stock Award or portion
thereof. At the end of the Restriction Period the restrictions
imposed hereunder shall lapse with respect to the shares of
Common Stock covered by the Restricted Stock Award or portion
thereof. The Committee may, in its sole discretion, modify or
accelerate the vesting of a Restricted Stock Award under such
circumstances as it deems appropriate.
(b) Restrictions. The holder of a Restricted
Stock Award may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of the shares of Common Stock
represented by the Restricted Stock Award during the applicable
Restriction Period. The Committee shall impose such other
restrictions on any shares of Common Stock covered by a
Restricted Stock Award as it may deem advisable including,
without limitation, restrictions under applicable Federal or
state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of such
restrictions.
(c) Rights as shareholders. During any
Restriction Period, the Committee may, in its discretion, grant
to the holder of a Restricted Stock Award all or any of the
rights of a shareholder with respect to said shares, including,
but not by way of limitation, the right to vote such shares and
to receive dividends. If any dividends or other distributions
are paid in shares of Common Stock, all such shares shall be
subject to the same restrictions on transferability as the shares
of Restricted Stock with respect to which they were paid.
ARTICLE IX
OTHER INCENTIVE AWARDS
Section IX.1 Grant of Other Incentive Awards. The
Committee may, in its discretion, grant other types of awards of,
or based on, Common Stock. Other Incentive Awards are limited to
awards under which Common Stock is or may in the future be
acquired. Such awards may include grants of debt securities
convertible into or exchangeable for shares of Common Stock upon
such conditions, including attainment of performance goals, as
the Committee shall determine.
Section IX.2 Conditions of Other Incentive Awards.
Each grant of an Other Incentive Award shall be evidenced by an
Award Notice executed by the Corporation and the Participant, and
shall contain such terms and conditions and be in such form as
the Committee may from time to time approve. Other Incentive
Awards may not be sold, assigned, transferred, pledged, or
encumbered except as may be provided in the Award Notice, and in
no event may be transferred other than by will or by the laws of
descent and distribution or be exercised, during the life of the
participant, other than by the participant or the participant's
guardian or legal representative. The recipient of an Other
Incentive Award will have the rights of a shareholder only to the
extent, if any, specified in the Award Notice governing such
Other Incentive Award.
ARTICLE X
STOCK ADJUSTMENTS
Section X.1 Adjustment of Shares Available;
Recapitalization. In the event that the shares of Common Stock,
as presently constituted, shall be changed into or exchanged for
a different number or kind of shares of stock or other securities
of the Corporation or of another corporation (whether by reason
of merger, consolidation, recapitalization, reclassification,
stock split, combination of shares or otherwise), or if the
number of such shares of Common Stock shall be increased through
the payment of a stock dividend, or a dividend on the shares of
Common Stock or rights or warrants to purchase securities of the
Corporation shall be made, then there shall be substituted for or
added to each share available under and subject to the Plan as
provided in Article IV hereof, and each share theretofore
appropriated or thereafter subject or which may become subject to
Performance Share Awards, Options, Restricted Stock Awards or
Other Incentive Awards under the Plan, the number and kind of
shares of stock or other securities into which each outstanding
share of Common Stock shall be so changed or for which each such
share shall be exchanged or to which each such share shall be
entitled, as the case may be. In the event there shall be any
other change in the number or kind of the outstanding shares of
Common Stock, or any stock or other securities into which the
Common Stock shall have been changed or for which it shall have
been exchanged, then if the Committee shall, in its sole
discretion, determine that such change equitably requires an
adjustment in the shares available under and subject to the
Plan, or in any Award theretofore granted or which may be granted
under the Plan, such adjustments shall be made in accordance with
such determination, except that no adjustment of the number of
shares of Common Stock available under the Plan or to which any
Award relates that would otherwise be required shall be made
unless and until such adjustment either by itself or with
other adjustments not previously made would require an increase
or decrease of at least 1% in the number of shares of Common
Stock available under the Plan or to which any Award relates
immediately prior to the making of such adjustment (the "Minimum
Adjustment"). Any adjustment representing a change of less than
such minimum amount shall be carried forward and made as soon as
such adjustment together with other adjustments required by this
Section X.1 and not previously made would result in a Minimum
Adjustment. Notwithstanding the foregoing, any adjustment
required by this Section X.1 which otherwise would not result in
a Minimum Adjustment shall be made with respect to shares of
Common Stock relating to any Award immediately prior to exercise,
payment or settlement of such Award.
No fractional shares of Common Stock or units of other
securities shall be issued pursuant to any such adjustment, and
any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole
share.
ARTICLE XI
GENERAL
Section XI.1 Amendment or Termination of Plan. The
Board may suspend or terminate the Plan at any time. In
addition, the Board may, from time to time, amend the Plan in
any manner, but may not without shareholder approval adopt any
amendment which would:
(a) increase the aggregate number of shares of
Common Stock available under the Plan (except by operation of
Article X);
(b) materially increase the benefits accruing to
Insider Participants under the Plan; or
(c) materially modify the requirements as to
eligibility for participation in the Plan;
provided, that any amendment to the Plan shall require approval
of the shareholders if, in the opinion of counsel to the
Corporation, such approval is required by Section 16(b) or any
other section of the Exchange Act, or any other Federal or state
law or any regulations or rules promulgated thereunder.
Notwithstanding the above, Section VI.3, the number of Director
Options to be awarded to Non-Employee Directors pursuant to
Section VI.3, the number of shares of Common Stock to be covered
by each Director Option, the exercise price per share under each
Director Option, when and under what circumstances each Director
Option will be granted and the period within which each such
option may be exercised, shall not be amended more than once
every six months (even with shareholder approval), other than to
conform with changes in the Code, ERISA, or the rules and
regulations thereunder.
Section XI.2 Dividends and Dividend Equivalents. If
an Award is granted in the form of a Performance Share Award,
Restricted Stock, or an Option, the Committee may choose, at the
time of the grant of such Award or any time thereafter up to the
time of payment of such Award, to include as part of such Award
an entitlement to receive dividends or dividend equivalents
subject to such terms, conditions, restrictions, and/or
limitations, if any, as the Committee may establish. Dividends
and dividend equivalents granted hereunder shall be paid in such
form and manner (i.e., lump sum or installments), and at such
time as the Committee shall determine. All dividends or dividend
equivalents which are not paid currently may, at the Committee's
discretion, accrue interest, be reinvested into additional shares
of Common Stock or, in the case of dividends or dividend
equivalents credited in connection with a Performance Share
Award, be credited as additional Performance Shares and paid to
the Participant if and when, and to the extent that, payment is
made pursuant to such Performance Share Award.
Section XI.3 Termination of Employment. If a
Participant's employment with the Corporation or a Subsidiary
terminates for a reason other than death, disability, retirement,
or any approved reason, all unexercised, unearned, and/or unpaid
Awards, including, but not by way of limitation, Awards earned,
but not yet paid, all unpaid dividends and dividend equivalents,
and all interest accrued on the foregoing shall be cancelled or
forfeited, as the case may be, unless the Participant's Award
Notice provides otherwise. The Committee shall have the
authority to promulgate rules and regulations to (i) determine
what events constitute disability, retirement, or termination for
an approved reason for purposes of the Plan, and (ii) determine
the treatment of a Participant under the Plan in the event of his
or her death, disability, retirement, or termination for an
approved reason. Such rules and regulations may include, without
limitation, the method, if any, for prorating a Performance Share
Award, accelerating the vesting or exercisability of any Options
or Restricted Stock Award, or providing for the exercise of any
unexercised Options in the event of a Participant's death,
disability, retirement, or termination for an approved reason.
Section XI.4 Nonassignability. No Options,
Performance Share Awards or other derivative securities (as
defined in the rules and regulations promulgated under Section 16
of the Exchange Act) awarded under the Plan to any person who is
or within the preceding six months has been, an Insider
Participant, shall be subject in any manner to alienation,
anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfer by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended (ERISA), or the rules and
regulations thereunder. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of, or to subject to execution,
attachment or similar process, any Option, Performance Share
Award or other derivative security, contrary to the provisions
hereof, shall be void and ineffective, shall give no right to any
purported transferee, and may, at the sole discretion of the
Committee, result in forfeiture of the Award involved in such
attempt.
Section XI.5 Withholding Taxes. The Corporation shall
be entitled to deduct from any payment under the Plan, regardless
of the form of such payment, the amount of all applicable income
and employment taxes required by law to be withheld with respect
to such payment or may require the Participant to pay to it such
tax prior to and as a condition of the making of such payment.
In accordance with any applicable administrative guidelines it
establishes, the Committee may allow a Participant to pay the
amount of taxes required by law to be withheld from an Award by
withholding from any payment of Common Stock due as a result
of such Award, or by permitting the Participant to deliver to the
Corporation, shares of Common Stock, having a Fair Market Value,
on the date of payment, equal to the amount of such required
withholding taxes; provided, however, that in the event the
Participant is, or within the preceding six (6) months has been
an Insider Participant, such an election may not be made within
six (6) months of the date the Award is granted (unless death or
disability of the Participant occurs prior to the expiration of
such six-month period), and must be made either six (6) months
prior to the date of payment or during the Window Period.
Section XI.6 Forfeiture. If the employment of a
Participant is terminated on account of any act of fraud,
intentional misrepresentation, embezzlement, misappropriation, or
conversion of assets or opportunities of the Corporation or any
of its Subsidiaries, any Award granted hereunder, whether and
regardless of the extent to which such Award is vested, earned
or exercisable, shall automatically terminate as of the date of
termination of such employment.
Section XI.7 Change of Control. Awards granted under
the Plan to any Participant may, in the discretion of the
Committee, provide that (a) such Awards shall be immediately
vested, fully earned and exercisable, as appropriate, upon a
Change of Control Event, or (b) such Awards shall be immediately
vested, fully earned and exercisable, as appropriate, upon
the termination of such Participant's employment with the
Corporation or any Subsidiary within the two (2) year period
following a Change of Control Event, except as provided in
Section XI.6 or as otherwise provided in any employment contract
or similar agreement between such Participant and the
Corporation, and (c) the Corporation shall, within the three (3)
month period immediately following such termination of
employment, make full payment to each such Participant with
respect to any Performance Share Award or Other Incentive Award,
deliver certificates to such Participant with respect to each
Restricted Stock Award, and permit the exercise of Options,
respectively, granted hereunder to such Participant.
Section XI.8 Amendments to Awards. The Committee may
at any time dunilaterally amend the terms of any Award Notice for
any Award, whether or not presently exercisable, earned, paid or
vested, to the extent it deems appropriate; provided, however,
that any such amendment which is adverse to the Participant shall
require the Participant's consent.
Section XI.9 Regulatory Approval and Listings. The
Corporation shall use its best efforts to file with the
Securities and Exchange Commission as soon as practicable
following the Effective Date, and keep continuously effectively
and usable, a Registration Statement on Form S-8 with respect to
shares of Common Stock subject to Awards hereunder.
Notwithstanding anything contained in this Plan to the contrary,
the Corporation shall have no obligation to issue or deliver
certificates representing shares of Common Stock evidencing
Restricted Stock Awards or any other Award relating to shares of
Common Stock prior to:
(a) the obtaining of any approval from, or
satisfaction of any waiting period or other condition imposed by,
any governmental agency which the Committee shall, in its sole
discretion, determine to be necessary or advisable,
(b) the admission of such shares to listing on
the stock exchange on which the Common Stock may be listed, and
(c) the completion of any registration or other
qualification of said shares under any state or Federal law or
ruling of any governmental body which the Committee shall, in its
sole discretion, determine to be necessary or advisable.
Section XI.10 Right to Continued Employment.
Participation in the Plan shall not give any Eligible Employee
any right to remain in the employ of the Corporation or any
Subsidiary. The Corporation or, in the case of employment with a
Subsidiary, the Subsidiary, reserves the right to terminate any
Eligible Employee at any time. Further, the adoption of this
plan shall not be deemed to give any Eligible Employee or any
other individual any right to be selected as a Participant or to
be granted an Award.
Section XI.11 Beneficiaries. Each Participant shall
file with the Committee a written designation of one or more
persons as the beneficiary (the "Beneficiary") who shall be
entitled to receive the amount, if any, payable under the Plan
upon his death. A Participant may, from time to time, revoke or
change his Beneficiary designation without the consent of any
prior Beneficiary by filing a new designation with the Committee.
The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the
Committee prior to the Participant's death, and in no event shall
be effective as of a date prior to such receipt.
If such Beneficiary designation is in effect at the
time of a Participant's death, or if no designated Beneficiary
survives the Participant, or such designation conflicts with law,
the payment of the amount, if any, payable under the Plan upon
his death shall be made to the Participant's estate. If the
Committee is in doubt as to the right of any person to receive
such amount, the Committee may retain such amount, without
liability or any interest thereon, until the rights thereon are
determined, or the Committee may pay such amount into any court
of appropriate jurisdiction and such payment shall be a complete
discharge of the liability of the Plan, the Corporation and the
Committee therefor.
Section XI.12 Indemnification. Each person who is or
shall have been a member of the Committee or of the Board shall
be indemnified and held harmless by the Corporation against and
from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit, or proceeding to which he
or she may be a party or in which he may be involved by reason of
any action or failure to act under the Plan and against and from
any and all amounts paid by such person in satisfaction of
judgment in any such action, suit, or proceeding against such
person. He or she shall give the Corporation an opportunity, at
its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be
entitled under the Corporation's Articles or Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the
Corporation may have to indemnify or hold harmless any such
person.
Section XI.13 Reliance on Reports. Each member of the
Committee and each member of the Board shall be fully justified
in relying or acting in good faith upon any report made by the
independent public accountants of the Corporation and its
Subsidiaries and upon any other information furnished in
connection with the Plan by any person or persons other than
himself. In no event shall any person who is or shall have been
a member of the Committee or of the Board be liable for any
determination made or other action taken or any omission to act
in reliance upon any such report or information or for any action
taken, including the furnishing of information, or failure to
act, if in good faith.
Section XI.14 Relationship to Other Benefits. No
payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit sharing,
group insurance or other benefit plan of the Corporation or any
Subsidiary.
Section XI.15 Expenses. The expenses of administering
the Plan shall be borne by the Corporation subject to such
allocation to its Subsidiaries as it deems appropriate.
Section XI.16 Construction. Masculine pronouns and
other words of masculine gender shall refer to both men and
women. The titles and headings of the sections in the Plan are
for the convenience of reference only, and in the event of any
conflict, the text of the plan, rather than such titles or
headings, shall control.
Section XI.17 Governing Law. The Plan shall be
governed by and construed in accordance with the laws of the
State of Delaware except as superseded by applicable Federal law.
FOODBRANDS AMERICA, INC. ASSOCIATE STOCK PURCHASE PLAN
Effective Date: July 1, 1996
FOODBRANDS AMERICA, INC. ASSOCIATE STOCK PURCHASE PLAN
Table of Contents
Page
ARTICLE I NAME AND PURPOSE OF PLAN . . . . . . . . . . . . . 1
1.1 Name of Plan . . . . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1
2.1 Definitions. . . . . . . . . . . . . . . . . . . . 1
2.2 Construction . . . . . . . . . . . . . . . . . . . 3
ARTICLE III FUNDING AND EARLY WITHDRAWAL OF ACCOUNTS . . . . . 3
3.1 Stock Purchase Accounts. . . . . . . . . . . . . . 3
3.2 Participant's Contributions. . . . . . . . . . . . 3
3.3 Continued Participation; Voluntary Withdrawal from
Plan . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Withdrawal by Terminating Participant . . . . . . 4
3.5 Reparticipation. . . . . . . . . . . . . . . . . . 4
3.6 Interest Accrual . . . . . . . . . . . . . . . . . 4
ARTICLE IV EXERCISE OF STOCK OPTION . . . . . . . . . . . . . 5
4.1 Exercise . . . . . . . . . . . . . . . . . . . . . 5
4.2 Amount of Shares of Stock . . . . . . . . . . . . 5
4.3 Distribution . . . . . . . . . . . . . . . . . . . 5
4.4 Issuance of Shares; Stock Certificates . . . . . . 5
ARTICLE V MAXIMUM SHARES OF STOCK AVAILABLE. . . . . . . . . 6
5.1 Maximum Number of Shares Available to Participants 6
5.2 Maximum Authorized Shares. . . . . . . . . . . . . 6
5.3 Termination of Offering for the Second and
Subsequent Purchase Periods. . . . . . . . . . . 6
ARTICLE VI ADMINISTRATION . . . . . . . . . . . . . . . . . . 6
6.1 Appointment of Committee . . . . . . . . . . . . . 6
6.2 Committee Powers and Duties. . . . . . . . . . . . 6
6.3 Committee to Make Rules and Interpret Plan . . . . 6
ARTICLE VII AMENDMENT OF THE PLAN. . . . . . . . . . . . . . . 6
ARTICLE VIIIRECAPITALIZATION AND EFFECT OF CERTAIN TRANSACTIONS 7
8.1 Stock Adjustments. . . . . . . . . . . . . . . . . 7
8.2 Effect of Certain Transactions . . . . . . . . . . 7
ARTICLE IX MISCELLANEOUS. . . . . . . . . . . . . . . . . . . 8
9.1 Notices. . . . . . . . . . . . . . . . . . . . . . 8
9.2 Application of the Funds . . . . . . . . . . . . . 8
9.3 Repurchase of Stock. . . . . . . . . . . . . . . . 8
9.4 Alternate Contribution Methods . . . . . . . . . . 8
9.5 Nonassignability . . . . . . . . . . . . . . . . . 8
9.6 Government Regulation. . . . . . . . . . . . . . . 8
9.7 Effective Date of Plan . . . . . . . . . . . . . . 8
9.8 Termination of Plan. . . . . . . . . . . . . . . . 8
9.9 No Obligations to Exercise Stock Option. . . . . . 8
9.10 Right to Continued Employment. . . . . . . . . . . 8
9.11 Reliance on Reports. . . . . . . . . . . . . . . . 8
9.12 Applicable Law . . . . . . . . . . . . . . . . . . 9
9.13 Construction . . . . . . . . . . . . . . . . . . . 9
FOODBRANDS AMERICA, INC. ASSOCIATE STOCK PURCHASE PLAN
ARTICLE I
NAME AND PURPOSE OF PLAN
1.1 Name of Plan. This Plan shall be known as: Foodbrands
America, Inc. Associate Stock Purchase Plan.
1.2 Purpose. The Foodbrands America, Inc. Associate Stock
Purchase Plan, by offering Associates the opportunity to purchase
the Company's Stock through payroll deductions, is intended to
encourage participation in the ownership and economic progress of
the Company. Associates may only be granted Stock Options to
purchase Stock. Except as otherwise provided in the Plan, by
reason of their employment relationship with the Company and/or
the Employer, all Associates of all Employers will be eligible to
participate in the Plan.
ARTICLE II
DEFINITIONS
2.1 Definitions. Where the following capitalized words and
phrases appear in either a singular or plural form in this
instrument, they shall have the respective meanings set forth
below unless a different context is clearly expressed herein.
(a) Account and Account Balance:
(i) The word "Account" shall mean the record established
and maintained to record the interest in the Plan of each
Participant in accordance with Article III.
(ii) The words "Account Balance" shall mean the credited
balance standing in a Participant's Account from time to time.
(b) Associate: The word "Associate" shall mean any person
employed by the Employer on the basis of an employer-employee
relationship who receives remuneration for personal services
rendered to the Employer.
(c) Board: The word "Board" shall mean the Board of
Directors of the Company.
(d) Code: The word "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(e) Committee: The word "Committee" shall mean the
Compensation Committee of the Board referred to in Article VI.
(f) Company: The word "Company" shall mean Foodbrands
America, Inc., a Delaware corporation.
(g) Employer: The word "Employer" shall mean the Company
and any Subsidiary of the Company.
(h) Exercise Date: The words "Exercise Date" shall mean
June 30 of any year during which the Plan is in existence, being
June 30, 1997, 1998, 1999, 2000 and 2001.
(i) Fair Market Value: The words "Fair Market Value" shall
mean (A) during such time as the Stock is listed upon the New
York Stock Exchange or other exchanges or the NASDAQ/National
Market System, the closing price of the Stock on such stock
exchange or exchanges or the NASDAQ/National Market System on the
day for which such value is to be determined, or if no sale of
the Stock shall have been made on any such stock exchange or the
NASDAQ/National Market System that day, on the next preceding day
on which there was a sale of such Stock or (B) during any such
time as the Stock is not listed upon an established stock
exchange or the NASDAQ/National Market System, the mean between
dealer "bid" and "ask" prices of the Stock in the
over-the-counter market on the day for which such value is to be
determined, as reported by the National Association of Securities
Dealers, Inc.
(j) Granting Date: The words "Granting Date" shall mean
the beginning of each applicable Purchase Period, being July 1,
1996, 1997, 1998, 1999 and 2000.
(k) Option Agreement: The words "Option Agreement" shall
mean an agreement to be executed by the Participant and the
Company, which shall comply with the terms of the Plan and shall
be in such form as the Committee agrees upon from time to time.
(l) Option Price: The words "Option Price" shall mean the
price which shall be paid by the Participant from his Account
for any Stock purchased on an applicable Exercise Date pursuant
to any Stock Option granted to such Participant; provided, such
option price shall be the lesser of:
(i) 90% of the per share Fair Market Value on the
Granting Date of the Purchase Period applicable to such
Participant; or
(ii) 90% of the per share Fair Market Value on the
Exercise Date of the Purchase Period applicable to such
Participant.
Provided, in no event shall the Option Price per share be less
than the par value of the Stock.
(m) Participant: The word "Participant" shall mean an
Associate (i) who executes with the Company an Option Agreement
on or prior to a Granting Date, (ii) who on such Granting Date
has been continuously employed by the Employer for at least six
months, and (iii) whose customary employment is more than 20
hours per week and more than five months in any calendar year.
Provided, for purposes of calculating the foregoing six month
service requirement for an Associate, all employment service with
the Company and its subsidiaries will be recognized. The word
"Participant" shall also include the legal representative of a
deceased Participant, and a Participant who, within three months
prior to the end of the applicable Purchase Period for which he
is a Participant, terminates his employment with the Employer on
account of (i) retirement on or after age 55, (ii) retirement
because of disability, (iii) lay off by the Employer, or (iv) an
authorized leave of absence granted by the Employer.
"Disability" for purposes of this Subsection (m) shall mean a
physical or mental condition which, in the judgment of the
Committee, totally and permanently prevents a Participant from
engaging in any substantial gainful employment with the Employer.
A determination that disability exists shall be based upon
independent medical evidence satisfactory to the Committee. In
the event that any Employer ceases to be a Subsidiary of the
Company, the Associates of such Employer will be deemed to have
terminated employment as of such date.
(n) Plan: The word "Plan" shall mean this Foodbrands
America, Inc. Associate Stock Purchase Plan, and any amendments
thereto.
(o) Purchase Period: The words "Purchase Period" shall
mean any one year period commencing on July 1 and ending on June
30 of each year during which the Plan is in existence, as
follows:
(i) "First Purchase Period" July 1, 1996 through
June 30, 1997.
(ii) "Second Purchase Period" July 1, 1997 through
June 30, 1998.
(iii) "Third Purchase Period" July 1, 1998 through
June 30, 1999.
(iv) "Fourth Purchase Period" July 1, 1999 through
June 30, 2000.
(v) "Fifth Purchase Period" July 1, 2000 through
June 30, 2001.
(p) Stock: The word "Stock" shall mean any of the total
number of shares of common stock of the Company being authorized
for issuance pursuant to the terms of the Plan in accordance with
Article V.
(q) Stock Option: The words "Stock Option" shall mean the
right of a Participant on an applicable Exercise Date to
purchase the number of whole shares of Stock as provided in
Article IV.
(r) Subsidiary: The word "Subsidiary" shall mean any
present or future subsidiary corporation of the Company as
defined in Section 424 of the Code.
(s) Terminating Participant: The words "Terminating
Participant" shall mean a Participant who terminates his
employment for reasons other than those set forth in Subsection
2.1(m).
2.2 Construction. The masculine gender, where appearing in the
Plan, shall be deemed to include the feminine gender, unless the
context clearly indicates to the contrary. Any word appearing
herein in the plural shall include the singular, where
appropriate, and likewise the singular shall include the plural,
unless the context clearly indicates to the contrary.
ARTICLE III
FUNDING AND EARLY WITHDRAWAL OF ACCOUNTS
3.1 Stock Purchase Accounts. As of the applicable Granting
Date, there shall be established and maintained under the Plan in
the name of each Participant (who is a Participant with respect
to the Purchase Period pertaining to such Granting Date) an
Account which shall be debited and credited in accordance with
the following Sections of this Article III.
3.2 Participant's Contributions. By becoming a Participant,
authorization shall be deemed to be automatically given by the
Participant for his periodic contributions which shall be
credited to his Account calculated as follows:
FIRST: The Participant's basic compensation rate
(excluding any form of extraordinary compensation such as
overtime, prizes, bonuses, commissions, reimbursed relocation
expenses and the like), as of the date ("Determination Date")
which is three months prior to the applicable Granting Date,
shall be determined and annualized ("Annual Compensation").
Increases in such basic compensation rate after such
Determination Date shall be disregarded for that Purchase Period.
Decreases in such basic compensation rate shall be adjusted as
provided hereinafter.
SECOND: Prior to the applicable Granting Date, the
Participant shall elect in his Option Agreement filed with the
Committee a percentage of either 1%, 2% or 3% ("Contribution
Rate"); provided, an election, once effective, with respect to
the first Purchase Period applicable to such Participant
following such election, cannot thereafter be changed; and
provided, a Participant may elect to change his Contribution Rate
for succeeding Purchase Periods by notifying the Committee within
10 days of any succeeding Granting Date. If a Participant
receives a "hardship withdrawal" from a cash or deferred
arrangement established by the Employer under Code Section
401(k), he shall be prohibited from making contributions to his
Account under this Plan for a period of 12 months after receipt
of such hardship distribution.
THIRD: The Participant's Annual Compensation for the
applicable Purchase Period shall be multiplied by his
Contribution Rate, and the product thereof shall equal his
aggregate maximum contributions ("Aggregate Contributions") to
be made under the Plan for the applicable Purchase Period.
FOURTH: A Participant's Aggregate Contributions shall
be divided by the number of his payroll payment dates falling
within the applicable Purchase Period to determine the dollar
amount of equal periodic contributions which shall be withheld by
the Employer by payroll deduction. If a Participant's number of
payroll payment dates thereafter shall be changed, appropriate
adjustment shall be made so that equal periodic contributions
shall be made. Provided, in the event that a Participant incurs
a decrease in his basic compensation during any Purchase Period,
and such Participant is not a Terminating Participant or has not
voluntarily withdrawn from the Plan, then, in such event, and if
requested by the Participant, appropriate adjustments will be
made by the Committee to reduce the maximum amount of periodic
contributions which such Participant would otherwise make
pursuant to the Plan to his Stock Purchase Account. The
reduction shall occur by determining the Participant's reduced
basic compensation rate and then multiplying such rate by the
Contribution Rate which such Participant had previously elected
for that Purchase Period. This reduced amount thereafter will be
credited to the Stock Purchase Account of such Participant for
the balance of the applicable Purchase Period.
3.3 Continued Participation; Voluntary Withdrawal from Plan.
Once a Participant elects to participate in the Plan, he shall
thereafter remain as a Participant until expiration or
termination of the Plan, unless he otherwise withdraws from, or
otherwise becomes ineligible to participate in the Plan. A legal
representative of a deceased participant and a Participant who
terminates employment for any reasons specified in Subsection
2.1(m) within three months prior to the end of the applicable
Purchase Period will continue to be a Participant in the Plan
until the next succeeding Exercise Date unless such Participant
or his representative (in the event of the Participant's death)
elects to withdraw from the Plan pursuant to this Section 3.3. A
Participant may withdraw from the Plan at any time by filing a
written notice with the Committee of withdrawal prior to the next
applicable Exercise Date. Upon a Participant's withdrawal, his
entire Account Balance, if any, on the date of withdrawal shall
be refunded to him.
3.4 Withdrawal by Terminating Participant. A Terminating
Participant shall be deemed to have made an election to withdraw
from the Plan on the date his employment terminates. Upon such
withdrawal, his entire Account Balance, if any, on the date of
withdrawal, shall be refunded to him.
3.5 Reparticipation. A Participant who withdraws under Section
3.3 within any Purchase Period shall not be eligible to reenter
the Plan with respect to the same Purchase Period; provided, a
Participant who withdraws from the Plan under Section 3.3 prior
to the end of any Purchase Period shall not be precluded from
becoming a Participant with respect to any succeeding Purchase
Period if he satisfies the eligibility requirements of the Plan.
3.6 Interest Accrual. With respect to the refund or
distribution of an Account Balance under either of Sections 3.3
or 3.4, no interest shall be paid or payable. If the Plan is
terminated under either of Sections 8.2 or 9.8, the refund of an
Account Balance shall be with interest at a per annum rate of 5%
and shall be computed upon the average balance in such
Participant's Account for the period of time following the
Granting Date applicable to such Participant and ending on the
day of the withdrawal or distribution.
ARTICLE IV
EXERCISE OF STOCK OPTION
4.1 Exercise. If a Participant has not made an earlier election
to withdraw pursuant to either of Sections 3.3 or 3.4, he shall
be deemed to have elected to exercise his Stock Option as of each
Exercise Date with respect to the applicable Purchase Periods.
4.2 Amount of Shares of Stock.
(a) Subject to the Subsection (b) following, the whole
number of shares of Stock to which a Participant shall be
entitled ("Total Stock Entitlement") upon the applicable Exercise
Date shall be determined under the following formula:
Account Balance
--------------- = Total Stock Entitlement
Option Price
Provided, the Account Balance for purposes of this Section 4.2
shall be determined without crediting any interest thereon.
(b) The Total Stock Entitlement computed for each
Participant shall be reduced to the extent that any of the
following Subsections shall apply:
(i) No Participant shall be entitled to participate in
the Plan to a greater extent than that permitted under Section
423(b)(3) of the Code. Thus, no Associate may be granted a Stock
Option if such Associate, immediately after the Stock Option is
granted, owns stock possessing five percent or more of the total
combined voting power or value of all classes of stock of
the Company or of its parent or any Subsidiary (if applicable).
For purposes of this Subsection, the rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an
individual, and stock which the Associate may purchase under all
outstanding stock options shall be treated as stock owned by the
Associate.
(ii) No Participant shall be entitled to participate in
the Plan to a greater extent than that permitted under Section
423(b)(8) of the Code. Thus, no Associate may be granted a Stock
Option which permits his rights to purchase stock under all
such "employee stock ownership plans" of the Company and its
parent or any Subsidiary (if applicable) intended to qualify
under Section 423 of the Code to accrue at a rate which exceeds
$25,000 of fair market value of such stock (determined at the
time such Stock Option is granted) for each calendar year in
which such Stock Option is outstanding at any time. For purposes
of this Subsection, (1) the right to purchase stock under an
option accrues when the option (or any portion thereof) first
becomes exercisable during the calendar year; (2) the right to
purchase stock under an option accrues at the rate provided in
the option, but in no case may such rate exceed $25,000 of fair
market value of such stock (determined at the time such stock
option is granted) for any one calendar year; and (3) a right to
purchase stock which has accrued under one option granted
pursuant to any such plan may not be carried over to any other
such stock option.
4.3 Distribution. A Participant's Total Stock Entitlement as
determined under Section 4.2 shall be distributed to him pursuant
to Section 4.4(b) together with any cash which is not applied
toward the purchase of whole shares of Stock. No interest shall
be payable upon such refunded Account Balance.
4.4 Issuance of Shares; Stock Certificates.
(a) The shares of Stock purchased by a Participant on the
applicable Exercise Date shall for all purposes, be deemed to
have been issued and sold at the close of business on such
Exercise Date. Prior to that time, none of the rights or
privileges of a stockholder of the Company shall exist with
respect to such shares.
(b) As soon as practicable after each Exercise Date, the
Company shall issue and deliver a certificate, registered in
the Participant's name, for the number of shares of Stock
purchased.
ARTICLE V
MAXIMUM SHARES OF STOCK AVAILABLE
5.1 Maximum Number of Shares Available to Participants. If on
the Exercise Date of any Purchase Period the Total Stock
Entitlement for all Participants, determined under Section 4.2
hereof exceeds the number of shares of Stock available for
issuance under the Plan, there shall be a proportionate reduction
for the ensuing applicable Purchase Period of each Participant's
Total Stock Entitlement in order to eliminate such excess.
Notwithstanding any provision herein to the contrary, the maximum
number of shares a Participant will be allowed to purchase during
any Purchase Period is 1,000 shares of Stock.
5.2 Maximum Authorized Shares. Subject to adjustment under
Article VIII, the maximum number of shares of Stock which may be
issued under the Plan shall not in the aggregate exceed 60,000
shares of Stock.
5.3 Termination of Offering for the Second and Subsequent
Purchase Periods. If in the opinion of the Committee, there is
insufficient Stock available for Stock Options at any Granting
Date after the July 1, 1996 Granting Date, the Committee may
terminate the offering contemplated for any or all succeeding
Purchase Periods.
ARTICLE VI
ADMINISTRATION
6.1 Appointment of Committee. The Plan shall be administered by
the Committee appointed by the Board and consisting of not less
than two members from the Board none of whom shall be associates
of the Company or a subsidiary of the Company while serving on
the Committee. The members of the Committee shall serve at the
pleasure of the Board and shall be ineligible to participate
under the Plan. Any member may serve concurrently as a member of
any other administrative committee of any other plan of the
Company or its affiliates entitling participants therein to
acquire stock, stock options or deferred compensation rights
including stock appreciation rights.
6.2 Committee Powers and Duties. The Committee shall have all
the powers and authorities which are reasonably appropriate and
necessary to discharge its duties under the Plan.
6.3 Committee to Make Rules and Interpret Plan. The Committee,
in its sole discretion, shall have the authority, subject to the
provisions of the Plan, to establish, adopt, or revise rules and
regulations with respect to the administration of the Plan and to
make all such determinations relating to the Plan as it may deem
necessary or advisable for the administration of the Plan. The
Committee's interpretation of the Plan and all decisions and
determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties unless otherwise
determined by the Board.
ARTICLE VII
AMENDMENT OF THE PLAN
The Board may at any time, or from time to time, amend the
Plan in any respect consistent with Sections 421 and 423 of the
Code, except that, without approval of the stockholders, no
amendment shall (i) increase the maximum number of shares
reserved under the Plan other than as provided in Article VIII,
or (ii) make the Plan available to any person who is not a
Participant.
ARTICLE VIII
RECAPITALIZATION AND EFFECT OF CERTAIN TRANSACTIONS
8.1 Stock Adjustments. In the event that the shares of Stock,
as presently constituted, shall be changed into or exchanged for
a different number or kind of shares of stock or other securities
of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, stock
split, combination of shares or otherwise), or if the number of
such shares of Stock shall be increased through the payment of a
stock dividend, then there shall be substituted for or added to
each share available under and subject to the Plan as provided in
Section 5.3 hereof, and each share theretofore appropriated or
thereafter subject or which may become subject to Stock Options
under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Stock shall be so
changed or for which each such share shall be exchanged or to
which each such share shall be entitled, as the case may be, on a
fair and equivalent basis in accordance with the applicable
provisions of Section 424 of the Code; provided, in no such event
will such adjustment result in a modification of any Stock Option
as defined in Section 424(h) of the Code. In the event there
shall be any other change in the number or kind of the
outstanding shares of Stock, or any stock or other securities
into which the Stock shall have been changed or for which it
shall have been exchanged, then if the Committee shall, in its
sole discretion, determine that such change equitably requires an
adjustment in the shares available under and subject to the Plan,
or in any Stock Option theretofore granted or which may be
granted under the Plan, such adjustments shall be made in
accordance with such determination, except that no adjustment of
the number of shares of Stock available under the Plan or
to which any Stock Option relates that would otherwise be
required shall be made unless and until such adjustment either by
itself or with other adjustments not previously made would
require an increase or decrease of at least 1% in the number of
shares of Stock available under the Plan or to which any Stock
Option relates immediately prior to the making of such adjustment
(the "Minimum Adjustment"). Any adjustment representing a change
of less than such minimum amount shall be carried forward and
made as soon as such adjustment together with other adjustments
required by this Section 8.1 and not previously made would result
in a Minimum Adjustment. Notwithstanding the foregoing, any
adjustment required by this Section 8.1 which otherwise would not
result in a Minimum Adjustment shall be made with respect to
shares of Stock relating to any Stock Option immediately prior to
exercise, payment or settlement of such Stock Option.
No fractional shares of Stock or units of other securities
shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated
in each case by rounding downward to the nearest whole share. Any
adjustments under this Section 8.1 shall be made according to the
sole discretion of the Company, and its decision shall be binding
and conclusive.
8.2 Effect of Certain Transactions. Subject to any required
action by the stockholders, if the Company shall be the surviving
or resulting corporation in any merger or consolidation, any
Stock Option hereunder shall pertain to and apply to the shares
of stock of the Company; but a dissolution or liquidation of the
Company or merger or consolidation in which the Company is not
the surviving or the resulting corporation shall cause the Plan
and any Stock Option hereunder to terminate upon the effective
date of such dissolution, liquidation, merger or consolidation,
and the Account Balance of each Participant shall be refunded to
him. Provided, that for the purpose of this Section 8.2, if any
merger, consolidation or combination occurs in which the Company
is not the surviving corporation and is the result of a mere
change in the identity, form or place of organization of the
Company accomplished in accordance with Section 368(a)(1)(F) of
the Code, then, such event shall not cause a termination.
ARTICLE IX
MISCELLANEOUS
9.1 Notices. Any notice which a Participant files pursuant to
the Plan shall be on the form prescribed by the Committee and
shall be effective when received by the Committee.
9.2 Application of the Funds. All funds received by the Company
under the Plan may be used for any corporate purpose.
9.3 Repurchase of Stock. The Company shall not be required to
repurchase from any Participant shares of Stock which he acquired
under the Plan.
9.4 Alternate Contribution Methods. If authorized payroll
deductions of a Participant's periodic contributions under
Section 3.2 are not permitted by reason of the provisions of any
law applicable to an Employer, the Committee shall adopt an
appropriate alternative method under which affected Participants
may make payment for shares of Stock purchased hereunder which
would otherwise have been made pursuant to Section 3.2.
9.5 Nonassignability. Stock Options are exercisable only by the
Participant during his lifetime, or by his estate or the person
who acquires the right to exercise such Stock Option upon his
death by bequest or inheritance, and are not transferable by him
other than by will or the laws of descent and distribution. No
Stock Option shall be subject in any manner to alienation,
anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfer by will or the laws of descent and
distribution. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of, or to subject to execution,
attachment or similar process, any Stock Option contrary to the
provisions hereof, shall be void and ineffective, shall give no
right to any purported transferee, and may, at the sole
discretion of the Committee, result in forfeiture of the Stock
Option involved in such attempt.
9.6 Government Regulation. The Company's obligation to sell and
deliver the Stock under the Plan is at all times subject to any
and all approvals, rules and regulations of any governmental
authority required in connection with the authorization,
issuance, sale or delivery of such Stock. In addition, the
rights of Participants under the Plan who are subject to Section
16 of the Securities Exchange Act of 1934, as amended ("Section
16"), are subject to compliance by such Participants with the
applicable provisions of Section 16 and the rules and regulations
promulgated thereunder.
9.7 Effective Date of Plan. The Plan shall become effective on
July 1, 1996, if prior to that date the Plan has been approved by
the holders of a majority of the common stock of the Company
present, or represented, and entitled to vote at a meeting called
for such purposes.
9.8 Termination of Plan. The Plan shall continue in effect
through June 30, 2001, unless terminated pursuant to Section 8.2
or by the Board, which shall have the right to terminate the Plan
at any time. Upon the termination of the Plan pursuant to this
Section 9.8 or Section 8.2, the Account Balance of each
Participant shall be refunded to him.
9.9 No Obligations to Exercise Stock Option. The granting of a
Stock Option shall impose no obligation upon the Participant to
exercise his Stock Option.
9.10 Right to Continued Employment. Participation in the Plan
shall not give any Participant any right to remain in the employ
of the Employer. The Employer reserves the right to terminate
any Participant at any time. Further, the adoption of this Plan
shall not be deemed to give any Participant or any other
individual any right to be selected as a Participant or to be
granted a Stock Option.
9.11 Reliance on Reports. Each member of the Committee and each
member of the Board shall be fully justified in relying or acting
in good faith upon any report made by the independent public
accountants of the Company and upon any other information
furnished in connection with the Plan by any person or persons
other than himself. In no event shall any person who is or shall
have been a member of the Committee or of the Board be liable for
any determination made or other action taken or any omission to
act in reliance upon any such report or information or for any
action taken, including the furnishing of information, or failure
to act, if in good faith.
9.12 Applicable Law. This Plan shall be governed by and
interpreted in accordance with the laws of the State of Oklahoma.
9.13 Construction. It is intended that this Plan shall qualify
in accordance with Sections 421 and 423 of the Code, and the
provisions of this Plan shall be interpreted and applied in a
manner consistent with such intent. Pursuant to the terms of the
Plan and the applicable provisions of the Code, all Participants
in the Plan will have the same rights and privileges and all such
Participants will be treated in an equal, uniform and
nondiscriminatory manner.
FOODBRANDS AMERICA, INC.
NONQUALIFIED ASSOCIATE STOCK PURCHASE PLAN
Effective Date: July 1, 1996
FOODBRANDS AMERICA, INC.
NONQUALIFIED ASSOCIATE STOCK PURCHASE PLAN
Table of Contents
Page
ARTICLE I NAME AND PURPOSE OF PLAN . . . . . . . . . . . 1
1.1 Name of Plan . . . . . . . . . . . . . . . . . 1
1.2 Purpose . . . . . . . . . . . . . . . . . . . . 1
1.3 Types of Options . . . . . . . . . . . . . . . 1
ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . . 1
2.1 Definitions . . . . . . . . . . . . . . . . . . 1
2.2 Construction . . . . . . . . . . . . . . . . . 3
ARTICLE III FUNDING AND EARLY WITHDRAWAL OF ACCOUNTS . . . 3
3.1 Stock Purchase Accounts . . . . . . . . . . . . 3
3.2 Participant's Contributions . . . . . . . . . . 3
3.3 Continued Participation; Voluntary Withdrawal
from Plan . . . . . . . . . . . . . . . . . . 4
3.4 Withdrawal by Terminating Participant . . . . . 4
3.5 Reparticipation . . . . . . . . . . . . . . . . 4
3.6 Interest Accrual . . . . . . . . . . . . . . . 5
ARTICLE IV EXERCISE OF STOCK OPTION . . . . . . . . . . . 5
4.1 Exercise . . . . . . . . . . . . . . . . . . . 5
4.2 Amount of Shares of Stock . . . . . . . . . . . 5
4.3 Distribution . . . . . . . . . . . . . . . . . 6
4.4 Issuance of Shares; Stock Certificates. . . . . 6
ARTICLE V MAXIMUM SHARES OF STOCK AVAILABLE . . . . . . . 6
5.1 Maximum Number of Shares Available to
Participants . . . . . . . . . . . . . . . . 6
5.2 Maximum Authorized Shares . . . . . . . . . . . 6
5.3 Termination of Offering for the Second and
Subsequent Purchase Periods . . . . . . . . . 6
ARTICLE VI ADMINISTRATION . . . . . . . . . . . . . . . . 6
6.1 Appointment of Committee . . . . . . . . . . . 6
6.2 Committee Powers and Duties . . . . . . . . . . 6
6.3 Committee to Make Rules and Interpret Plan . . 6
ARTICLE VII AMENDMENT OF THE PLAN . . . . . . . . . . . . . 7
ARTICLE VIII RECAPITALIZATION AND EFFECT OF CERTAIN
TRANSACTIONS. . . . . . . . . . . . . . . . . 7
8.1 Stock Adjustments . . . . . . . . . . . . . . . 7
8.2 Effect of Certain Transactions . . . . . . . . 7
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . 8
9.1 Notices . . . . . . . . . . . . . . . . . . . . 8
9.2 Application of the Funds . . . . . . . . . . . 8
9.3 Repurchase of Stock . . . . . . . . . . . . . . 8
9.4 Alternate Contribution Methods . . . . . . . . 8
9.5 Nonassignability . . . . . . . . . . . . . . . 8
9.6 Government Regulation . . . . . . . . . . . . . 8
9.7 Effective Date of Plan . . . . . . . . . . . . 8
9.8 Termination of Plan . . . . . . . . . . . . . . 8
9.9 No Obligations to Exercise Stock Option . . . . 9
9.10 Right to Continued Employment . . . . . . . . . 9
9.11 Reliance on Reports . . . . . . . . . . . . . . 9
9.12 Applicable Law . . . . . . . . . . . . . . . . 9
9.13 Withholding Taxes . . . . . . . . . . . . . . . 9
FOODBRANDS AMERICA, INC.
NONQUALIFIED ASSOCIATE STOCK PURCHASE PLAN
ARTICLE I
NAME AND PURPOSE OF PLAN
1.1 Name of Plan. This Plan shall be known as: Foodbrands
America, Inc. Nonqualified Associate Stock Purchase Plan.
1.2 Purpose. The Foodbrands America, Inc. Nonqualified
Associate Stock Purchase Plan, by offering Associates the
opportunity to purchase the Company's Stock through payroll
deductions, is intended to encourage participation in the
ownership and economic progress of the Company. Associates may
only be granted Stock Options to purchase Stock. Except as
otherwise provided in the Plan, by reason of their employment
relationship with the Employer, all Associates of all Employers
approved will be eligible to participate in the Plan. Further,
this Plan is not intended to qualify as a "employee stock
purchase plan" as defined in Section 423 of the Code. Further,
there are references in this Plan to Section 423 of the Code,
however, these references are only for the purpose of limiting
the number of Stock Options which may be granted under the Plan
and are not intended to qualify this Plan under Section 423 of
the Code.
1.3 Types of Options. It is intended that this Plan shall grant
nonqualified stock options as described in accordance with
Section 421 of the Code, and the provisions of this Plan shall be
interpreted and applied in a manner consistent with such intent.
Therefore, the Stock Options under this Plan shall be stock
options as described under Section 421 of the Code.
ARTICLE II
DEFINITIONS
2.1 Definitions. Where the following capitalized words and
phrases appear in either a singular or plural form in this
instrument, they shall have the respective meanings set forth
below unless a different context is clearly expressed herein.
(a) Account and Account Balance:
(i) The word "Account" shall mean the record
established and maintained to record the interest in the Plan of
each Participant in accordance with Article III.
(ii) The words "Account Balance" shall mean the
credited balance standing in a Participant's Account from time to
time.
(b) Associate: The word "Associate" shall mean any person
employed by the Employer on the basis of an employer-employee
relationship who receives remuneration for personal services
rendered to the Employer.
(c) Board: The word "Board" shall mean the Board of
Directors of the Company.
(d) Code: The word "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
(e) Committee: The word "Committee" shall mean the
Compensation Committee of the Board referred to in Article VI.
(f) Company: The word "Company" shall mean Foodbrands
America, Inc., a Delaware corporation.
(g) Employer: The word "Employer" shall mean any
Subsidiary of the Company which is not participating in the
Foodbrands America, Inc. Associate Stock Purchase Plan. The
initial Employers whose associates may participate in the Plan
are Doskocil Food Service Company, L.L.C., a limited liability
company, and KPR Holdings, L.P., a limited partnership. The
Company must approve the participation of any Subsidiary in the
Plan and the grant of Stock Options to Associates of such
Employers.
(h) Exercise Date: The words "Exercise Date" shall mean
June 30 of any year during which the Plan is in existence, being
June 30, 1997, 1998, 1999, 2000 and 2001.
(i) Fair Market Value: The words "Fair Market Value" shall
mean (A) during such time as the Stock is listed upon the New
York Stock Exchange or other exchanges or the NASDAQ/National
Market System, the closing price of the Stock on such stock
exchange or exchanges or the NASDAQ/National Market System on the
day for which such value is to be determined, or if no sale of
the Stock shall have been made on any such stock exchange or the
NASDAQ/National Market System that day, on the next preceding day
on which there was a sale of such Stock or (B) during any such
time as the Stock is not listed upon an established stock
exchange or the NASDAQ/National Market System, the mean between
dealer "bid" and "ask" prices of the Stock in the
over-the-counter market on the day for which such value is to be
determined, as reported by the National Association of Securities
Dealers, Inc.
(j) Granting Date: The words "Granting Date" shall mean
the beginning of each applicable Purchase Period, being July 1,
1996, 1997, 1998, 1999 and 2000.
(k) Option Agreement: The words "Option Agreement" shall
mean an agreement to be executed by the Participant and the
Company, which shall comply with the terms of the Plan and shall
be in such form as the Committee agrees upon from time to time.
(l) Option Price: The words "Option Price" shall mean the
price which shall be paid by the Participant from his Account
for any Stock purchased on an applicable Exercise Date pursuant
to any Stock Option granted to such Participant; provided, such
option price shall be the lesser of:
(i) 90% of the per share Fair Market Value on the
Granting Date of the Purchase Period applicable to such
Participant; or
(ii) 90% of the per share Fair Market Value on the
Exercise Date of the Purchase Period applicable to such
Participant.
Provided, in no event shall the Option Price per share be less
than the par value of the Stock.
(m) Participant: The word "Participant" shall mean an
Associate (i) who executes with the Company an Option Agreement
on or prior to a Granting Date, (ii) who on such Granting Date
has been continuously employed by the Employer for at least six
months, and (iii) whose customary employment is more than 20
hours per week and more than five months in any calendar year.
Provided, for purposes of calculating the foregoing six month
service requirement for an Associate, all employment service with
the Company and its subsidiaries will be recognized. The word
"Participant" shall also include the legal representative of a
deceased Participant, and a Participant who, within three months
prior to the end of the applicable Purchase Period for which he
is a Participant, terminates his employment with the Employer on
account of (i) retirement on or after age 55, (ii) retirement
because of disability, (iii) lay off by the Employer, or (iv) an
authorized leave of absence granted by the Employer.
"Disability" for purposes of this Subsection (m) shall mean a
physical or mental condition which, in the judgment of the
Committee, totally and permanently prevents a Participant from
engaging in any substantial gainful employment with the Employer.
A determination that disability exists shall be based upon
independent medical evidence satisfactory to the Committee. In
the event that any Employer ceases to be a Subsidiary of the
Company, the Associates of such Employer will be deemed to have
terminated employment as of such date.
(n) Plan: The word "Plan" shall mean this Foodbrands
America, Inc. Nonqualified Associate Stock Purchase Plan, and any
amendments thereto.
(o) Purchase Period: The words "Purchase Period" shall
mean any one year period commencing on July 1 and ending on June
30 of each year during which the Plan is in existence, as
follows:
(i) "First Purchase Period" July 1, 1996 through
June 30, 1997.
(ii) "Second Purchase Period" July 1, 1997 through
June 30, 1998.
(iii) "Third Purchase Period" July 1, 1998 through
June 30, 1999.
(iv) "Fourth Purchase Period" July 1, 1999 through
June 30, 2000.
(v) "Fifth Purchase Period" July 1, 2000 through
June 30, 2001.
(p) Stock: The word "Stock" shall mean any of the total
number of shares of common stock of the Company being authorized
for issuance pursuant to the terms of the Plan in accordance with
Article V.
(q) Stock Option: The words "Stock Option" shall mean the
right of a Participant on an applicable Exercise Date to purchase
the number of whole shares of Stock as provided in Article IV.
(r) Subsidiary: The word "Subsidiary" shall mean any
present or future entity (including any limited partnership or
limited liability company) in which the Company owns directly or
indirectly more than a 50% interest and such entity does not meet
the definition of "subsidiary" as defined in Section 424 of the
Code.
(s) Terminating Participant: The words "Terminating
Participant" shall mean a Participant who terminates his
employment for reasons other than those set forth in Subsection
2.1(m).
2.2 Construction. The masculine gender, where appearing in the
Plan, shall be deemed to include the feminine gender, unless the
context clearly indicates to the contrary. Any word appearing
herein in the plural shall include the singular, where
appropriate, and likewise the singular shall include the plural,
unless the context clearly indicates to the contrary.
ARTICLE III
FUNDING AND EARLY WITHDRAWAL OF ACCOUNTS
3.1 Stock Purchase Accounts. As of the applicable Granting
Date, there shall be established and maintained under the Plan in
the name of each Participant (who is a Participant with respect
to the Purchase Period pertaining to such Granting Date) an
Account which shall be debited and credited in accordance with
the following Sections of this Article III.
3.2 Participant's Contributions. By becoming a Participant,
authorization shall be deemed to be automatically given by the
Participant for his periodic contributions which shall be
credited to his Account calculated as follows:
FIRST: The Participant's basic compensation rate
(excluding any form of extraordinary compensation such as
overtime, prizes, bonuses, commissions, reimbursed relocation
expenses and the like), as of the date ("Determination Date")
which is three months prior to the applicable Granting Date,
shall be determined and annualized ("Annual Compensation").
Increases in such basic compensation rate after such
Determination Date shall be disregarded for that Purchase Period.
Decreases in such basic compensation rate shall be adjusted as
provided hereinafter.
SECOND: Prior to the applicable Granting Date, the
Participant shall elect in his Option Agreement filed with the
Committee a percentage of either 1%, 2% or 3% ("Contribution
Rate"); provided, an election, once effective, with respect to
the first Purchase Period applicable to such Participant
following such election, cannot thereafter be changed; and
provided, a Participant may elect to change his Contribution Rate
for succeeding Purchase Periods by notifying the Committee within
10 days of any succeeding Granting Date. If a Participant
receives a "hardship withdrawal" from a cash or deferred
arrangement established by the Employer under Code Section
401(k), he shall be prohibited from making contributions to his
Account under this Plan for a period of 12 months after receipt
of such hardship distribution.
THIRD: The Participant's Annual Compensation for the
applicable Purchase Period shall be multiplied by his
Contribution Rate, and the product thereof shall equal his
aggregate maximum contributions ("Aggregate Contributions") to be
made under the Plan for the applicable Purchase Period.
FOURTH: A Participant's Aggregate Contributions shall
be divided by the number of his payroll payment dates falling
within the applicable Purchase Period to determine the dollar
amount of equal periodic contributions which shall be withheld by
the Employer by payroll deduction. If a Participant's number of
payroll payment dates thereafter shall be changed, appropriate
adjustment shall be made so that equal periodic contributions
shall be made. Provided, in the event that a Participant incurs a
decrease in his basic compensation during any Purchase Period,
and such Participant is not a Terminating Participant or has not
voluntarily withdrawn from the Plan, then, in such event, and if
requested by the Participant, appropriate adjustments will be
made by the Committee to reduce the maximum amount of periodic
contributions which such Participant would otherwise make
pursuant to the Plan to his Stock Purchase Account. The
reduction shall occur by determining the Participant's reduced
basic compensation rate and then multiplying such rate by the
Contribution Rate which such Participant had previously elected
for that Purchase Period. This reduced amount thereafter will be
credited to the Stock Purchase Account of such Participant for
the balance of the applicable Purchase Period.
3.3 Continued Participation; Voluntary Withdrawal from Plan.
Once a Participant elects to participate in the Plan, he shall
thereafter remain as a Participant until expiration or
termination of the Plan, unless he otherwise withdraws from, or
otherwise becomes ineligible to participate in the Plan. A legal
representative of a deceased Participant and a Participant who
terminates employment for any reasons specified in Subsection
2.1(m) within three months prior to the end of the applicable
Purchase Period will continue to be a Participant in the Plan
until the next succeeding Exercise Date unless such Participant
or his representative (in the event of the Participant's death)
elects to withdraw from the Plan pursuant to this Section 3.3. A
Participant may withdraw from the Plan at any time by filing a
written notice with the Committee of withdrawal prior to the next
applicable Exercise Date. Upon a Participant's withdrawal, his
entire Account Balance, if any, on the date of withdrawal shall
be refunded to him.
3.4 Withdrawal by Terminating Participant. A Terminating
Participant shall be deemed to have made an election to withdraw
from the Plan on the date his employment terminates. Upon such
withdrawal, his entire Account Balance, if any, on the date of
withdrawal, shall be refunded to him.
3.5 Reparticipation. A Participant who withdraws under Section
3.3 within any Purchase Period shall not be eligible to reenter
the Plan with respect to the same Purchase Period; provided, a
Participant who withdraws from the Plan under Section 3.3 prior
to the end of any Purchase Period shall not be precluded from
becoming a Participant with respect to any succeeding Purchase
Period if he satisfies the eligibility requirements of the Plan.
3.6 Interest Accrual. With respect to the refund or
distribution of an Account Balance under either of Sections 3.3
or 3.4, no interest shall be paid or payable. If the Plan is
terminated under either of Sections 8.2 or 9.8, the refund of an
Account Balance shall be with interest at a per annum rate of 5%
and shall be computed upon the average balance in such
Participant's Account for the period of time following the
Granting Date applicable to such Participant and ending on the
day of the withdrawal or distribution.
ARTICLE IV
EXERCISE OF STOCK OPTION
4.1 Exercise. If a Participant has not made an earlier election
to withdraw pursuant to either of Sections 3.3 or 3.4, he shall
be deemed to have elected to exercise his Stock Option as of each
Exercise Date with respect to the applicable Purchase Periods.
4.2 Amount of Shares of Stock.
(a) Subject to the Subsection (b) following, the whole
number of shares of Stock to which a Participant shall be
entitled ("Total Stock Entitlement") upon the applicable Exercise
Date shall be determined under the following formula:
Account Balance
----------------- = Total Stock Entitlement
Option Price
Provided, the Account Balance for purposes of this Section 4.2
shall be determined without crediting any interest thereon.
(b) The Total Stock Entitlement computed for each
Participant shall be reduced to the extent that any of the
following Subsections shall apply:
(i) No Participant shall be entitled to participate in
the Plan to a greater extent than that permitted under Section
423(b)(3) of the Code. Thus, no Associate may be granted a Stock
Option if such Associate, immediately after the Stock Option is
granted, owns stock possessing five percent or more of the total
combined voting power or value of all classes of stock of the
Company or of its parent or any Subsidiary (if applicable). For
purposes of this Subsection, the rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an
individual, and stock which the Associate may purchase under all
outstanding stock options shall be treated as stock owned by the
Associate.
(ii) No Participant shall be entitled to participate in
the Plan to a greater extent than that permitted under Section
423(b)(8) of the Code. Thus, no Associate may be granted a Stock
Option which permits his rights to purchase stock under the
Foodbrands America, Inc. Associate Stock Purchase Plan and this
Plan to accrue at a rate which exceeds $25,000 of fair market
value of such stock (determined at the time such Stock Option is
granted) for each calendar year in which such Stock Option is
outstanding at any time. For purposes of this Subsection, (1)
the right to purchase stock under an option accrues when the
option (or any portion thereof) first becomes exercisable during
the calendar year; (2) the right to purchase stock under an
option accrues at the rate provided in the option, but in no case
may such rate exceed $25,000 of fair market value of such stock
(determined at the time such stock option is granted) for any one
calendar year; and (3) a right to purchase stock which has
accrued under one option granted pursuant to any such plan may
not be carried over to any other such stock option.
4.3 Distribution. A Participant's Total Stock Entitlement as
determined under Section 4.2 shall be distributed to him pursuant
to Section 4.4(b) together with any cash which is not applied
toward the purchase of whole shares of Stock. No interest shall
be payable upon such refunded Account Balance.
4.4 Issuance of Shares; Stock Certificates.
(a) The shares of Stock purchased by a Participant on the
applicable Exercise Date shall for all purposes, be deemed to
have been issued and sold at the close of business on such
Exercise Date. Prior to that time, none of the rights or
privileges of a stockholder of the Company shall exist with
respect to such shares.
(b) As soon as practicable after each Exercise Date, the
Company shall issue and deliver a certificate, registered in the
Participant's name, for the number of shares of Stock purchased.
ARTICLE V
MAXIMUM SHARES OF STOCK AVAILABLE
5.1 Maximum Number of Shares Available to Participants. If on
the Exercise Date of any Purchase Period the Total Stock
Entitlement for all Participants determined under Section 4.2
hereof exceeds the number of shares of Stock available for
issuance under the Plan, there shall be a proportionate reduction
for the ensuing applicable Purchase Period of each Participant's
Total Stock Entitlement in order to eliminate such excess.
Notwithstanding any provision herein to the contrary, the maximum
number of shares a Participant will be allowed to purchase during
any Purchase Period is 1,000 shares of Stock.
5.2 Maximum Authorized Shares. Subject to adjustment under
Article VIII, the maximum number of shares of Stock which may be
issued under the Plan shall not in the aggregate exceed 40,000
shares of Stock.
5.3 Termination of Offering for the Second and Subsequent
Purchase Periods. If in the opinion of the Committee, there is
insufficient Stock available for Stock Options at any Granting
Date after the July 1, 1996 Granting Date, the Committee may
terminate the offering contemplated for any or all succeeding
Purchase Periods.
ARTICLE VI
ADMINISTRATION
6.1 Appointment of Committee. The Plan shall be administered by
the Committee appointed by the Board and consisting of not less
than two members from the Board none of whom shall be associates
of the Company or a subsidiary of the Company while serving on
the Committee. The members of the Committee shall serve at the
pleasure of the Board and shall be ineligible to participate
under the Plan. Any member may serve concurrently as a member of
any other administrative committee of any other plan of the
Company or its affiliates entitling participants therein to
acquire stock, stock options or deferred compensation rights
including stock appreciation rights.
6.2 Committee Powers and Duties. The Committee shall have all
the powers and authorities which are reasonably appropriate and
necessary to discharge its duties under the Plan.
6.3 Committee to Make Rules and Interpret Plan. The Committee,
in its sole discretion, shall have the authority, subject to the
provisions of the Plan, to establish, adopt, or revise rules and
regulations with respect to the administration of the Plan and to
make all such determinations relating to the Plan as it may deem
necessary or advisable for the administration of the Plan. The
Committee's interpretation of the Plan and all decisions and
determinations by the Committee with respect to the Plan shall be
final, binding, and conclusive on all parties unless otherwise
determined by the Board.
ARTICLE VII
AMENDMENT OF THE PLAN
The Board may at any time, or from time to time, amend the
Plan in any respect consistent with Section 421 of the Code,
except that, without approval of the stockholders, no amendment
shall (i) increase the maximum number of shares reserved under
the Plan other than as provided in Article VIII, or (ii) make the
Plan available to any person who is not a Participant.
ARTICLE VIII
RECAPITALIZATION AND EFFECT OF CERTAIN TRANSACTIONS
8.1 Stock Adjustments. In the event that the shares of Stock,
as presently constituted, shall be changed into or exchanged for
a different number or kind of shares of stock or other securities
of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, stock
split, combination of shares or otherwise), or if the number of
such shares of Stock shall be increased through the payment of a
stock dividend, then there shall be substituted for or added to
each share available under and subject to the Plan as provided in
Section 5.3 hereof, and each share theretofore appropriated or
thereafter subject or which may become subject to Stock Options
under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Stock shall be so
changed or for which each such share shall be exchanged or to
which each such share shall be entitled, as the case may be, on a
fair and equivalent basis in accordance with the applicable
provisions of Section 424 of the Code; provided, in no such event
will such adjustment result in a modification of any Stock Option
as defined in Section 424(h) of the Code. In the event there
shall be any other change in the number or kind of the
outstanding shares of Stock, or any stock or other securities
into which the Stock shall have been changed or for which it
shall have been exchanged, then if the Committee shall, in its
sole discretion, determine that such change equitably requires an
adjustment in the shares available under and subject to the Plan,
or in any Stock Option theretofore granted or which may be
granted under the Plan, such adjustments shall be made in
accordance with such determination, except that no adjustment of
the number of shares of Stock available under the Plan or
to which any Stock Option relates that would otherwise be
required shall be made unless and until such adjustment either by
itself or with other adjustments not previously made would
require an increase or decrease of at least 1% in the number of
shares of Stock available under the Plan or to which any Stock
Option relates immediately prior to the making of such adjustment
(the "Minimum Adjustment"). Any adjustment representing a change
of less than such minimum amount shall be carried forward and
made as soon as such adjustment together with other adjustments
required by this Section 8.1 and not previously made would result
in a Minimum Adjustment. Notwithstanding the foregoing, any
adjustment required by this Section 8.1 which otherwise would not
result in a Minimum Adjustment shall be made with respect to
shares of Stock relating to any Stock Option immediately prior to
exercise, payment or settlement of such Stock Option.
No fractional shares of Stock or units of other securities
shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated
in each case by rounding downward to the nearest whole share.
Any adjustments under this Section 8.1 shall be made according to
the sole discretion of the Committee, and its decision shall be
binding and conclusive.
8.2 Effect of Certain Transactions. Subject to any required
action by the stockholders, if the Company shall be the surviving
or resulting corporation in any merger or consolidation, any
Stock Option hereunder shall pertain to and apply to the shares
of stock of the Company; but a dissolution or liquidation of the
Company or merger or consolidation in which the Company is not
the surviving or the resulting corporation shall cause the Plan
and any Stock Option hereunder to terminate upon the effective
date of such dissolution, liquidation, merger or consolidation,
and the Account Balance of each Participant shall be refunded to
him. Provided, that for the purpose of this Section 8.2, if any
merger, consolidation or combination occurs in which the Company
is not the surviving corporation and is the result of a mere
change in the identity, form or place of organization of the
Company accomplished in accordance with Section 368(a)(1)(F) of
the Code, then, such event shall not cause a termination.
ARTICLE IX
MISCELLANEOUS
9.1 Notices. Any notice which a Participant files pursuant to
the Plan shall be on the form prescribed by the Committee and
shall be effective when received by the Committee.
9.2 Application of the Funds. All funds received by the Company
under the Plan may be used for any corporate purpose.
9.3 Repurchase of Stock. The Company shall not be required to
repurchase from any Participant shares of Stock which he acquired
under the Plan.
9.4 Alternate Contribution Methods. If authorized payroll
deductions of a Participant's periodic contributions under
Section 3.2 are not permitted by reason of the provisions of any
law applicable to an Employer, the Committee shall adopt an
appropriate alternative method under which affected Participants
may make payment for shares of Stock purchased hereunder which
would otherwise have been made pursuant to Section 3.2.
9.5 Nonassignability. Stock Options are exercisable only by
the Participant during his lifetime, or by his estate or the
person who acquires the right to exercise such Stock Option upon
his death by bequest or inheritance, and are not transferable by
him other than by will or the laws of descent and distribution.
No Stock Option shall be subject in any manner to alienation,
anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfer by will or the laws of descent and
distribution. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of, or to subject to execution,
attachment or similar process, any Stock Option contrary to the
provisions hereof, shall be void and ineffective, shall give no
right to any purported transferee, and may, at the sole
discretion of the Committee, result in forfeiture of the Stock
Option involved in such attempt.
9.6 Government Regulation. The Company's obligation to sell and
deliver the Stock under the Plan is at all times subject to any
and all approvals, rules and regulations of any governmental
authority required in connection with the authorization,
issuance, sale or delivery of such Stock. In addition, the
rights of Participants under the Plan who are subject to Section
16 of the Securities Exchange Act of 1934, as amended ("Section
16"), are subject to compliance by such Participants with the
applicable provisions of Section 16 and the rules and regulations
promulgated thereunder.
9.7 Effective Date of Plan. The Plan shall become effective on
July 1, 1996, if prior to that date the Plan has been approved by
the holders of a majority of the common stock of the Company
present, or represented, and entitled to vote at a meeting called
for such purposes.
9.8 Termination of Plan. The Plan shall continue in effect
through June 30, 2001, unless terminated pursuant to Section 8.2
or by the Board, which shall have the right to terminate the Plan
at any time. Upon the termination of the Plan pursuant to this
Section 9.8 or Section 8.2, the Account Balance of each
Participant shall be refunded to him.
9.9 No Obligations to Exercise Stock Option. The granting of a
Stock Option shall impose no obligation upon the Participant to
exercise his Stock Option.
9.10 Right to Continued Employment. Participation in the Plan
shall not give any Participant any right to remain in the employ
of the Employer. The Employer reserves the right to terminate
any Participant at any time. Further, the adoption of this Plan
shall not be deemed to give any Participant or any other
individual any right to be selected as a Participant or to be
granted a Stock Option.
9.11 Reliance on Reports. Each member of the Committee and each
member of the Board shall be fully justified in relying or acting
in good faith upon any report made by the independent public
accountants of the Company and upon any other information
furnished in connection with the Plan by any person or persons
other than himself. In no event shall any person who is or shall
have been a member of the Committee or of the Board be liable for
any determination made or other action taken or any omission to
act in reliance upon any such report or information or for any
action taken, including the furnishing of information, or failure
to act, if in good faith.
9.12 Applicable Law. This Plan shall be governed by and
interpreted in accordance with the laws of the State of Oklahoma.
9.13 Withholding Taxes. The Company shall be entitled to deduct
from any payment or distribution under the Plan, regardless of
the form of such payment or distribution, the amount of all
applicable income and employment taxes required by law to be
withheld with respect to such payment or distribution or may
require the Participant to pay to it such tax prior to and as a
condition of the making of such payment or distribution. In
accordance with any applicable administrative guidelines it
establishes, the Committee may allow a Participant to pay the
amount of taxes required by law to be withheld from Stock
purchased by means of the exercise of a Stock Option by
withholding from any such Stock due as a result of such exercise.
Provided, however, that in the event the Participant is, or
within the preceding six months has been a Participant who is
subject to the provisions of Section 16, such an election may not
be made within six months of the date the Stock Option is granted
(unless death or disability of the Participant occurs prior to
the expiration of such six-month period), and must be made either
six months prior to the date of payment or during the period
beginning on the third business day following the date of release
of a summary statement of the Company's quarterly or annual sales
and earnings and ending on the twelfth business day following
such date.
_______________________________________________________________
_______________________________________________________________
____________________
Foodbrands America, Inc., as Issuer
and
the Guarantors, as identified herein
and
Liberty Bank and Trust Company of Oklahoma City,
National Association, as Trustee
____________________
INDENTURE
Dated as of May 15, 1996
____________________
$120,000,000
10 3/4 % Senior Subordinated Notes due 2006
_______________________________________________________________
_______________________________________________________________
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of May 15, 1996
Trust Indenture Indenture
Act Section Section
Section 310(a)(1) ..................................... 7.11
(a)(2) ..................................... 7.11
(a)(3) ..................................... N.A.
(a)(4) ..................................... N.A.
(a)(5) ..................................... 7.11
(b) ..................................... 7.09;
7.11; 12.02
(c) ..................................... N.A.
Section 311(a) ..................................... 7.12
(b) ..................................... 7.12
(c) ..................................... N.A.
Section 312(a) ..................................... 2.05
(b) ..................................... 12.03
(c) ..................................... 12.03
Section 313(a) ..................................... 7.07
(b) ..................................... 7.07
(c) ..................................... 7.07;
12.02
(d) ..................................... 7.07
Section 314(a) ..................................... 4.07;
12.02
(b) ..................................... N.A.
(c)(1) ..................................... 12.04
(c)(2) ..................................... 12.04
(c)(3) ..................................... N.A.
(d) ..................................... N.A.
(e) ..................................... 12.05
(f) ..................................... N.A.
Section 315(a) .....................................7.01(b)
(b) ..................................... 7.05;
12.02
(c) .....................................7.01(a)
(d) .....................................7.01(c)
(e) ..................................... 6.11
Section 316(a) (last
sentence) ..................................... 2.09
(a)(1)(A) ..................................... 6.05
(a)(1)(B) ..................................... 6.04
(a)(2) ..................................... N.A.
(b) ..................................... 6.07
Section 317(a)(1) ..................................... 6.08
(a)(2) ..................................... 6.09
(b) ..................................... 2.04
Section 318(a) ..................................... 12.01
________________________
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.01. Definitions................................ 1
Section 1.02. Incorporation by Reference of Trust
Indenture Act............................ 27
Section 1.03. Rules of Construction...................... 27
ARTICLE TWO
THE NOTES
Section 2.01. Forms and Dating........................... 28
Section 2.02. Execution and Authentication............... 29
Section 2.03. Registrar and Paying Agent................. 29
Section 2.04. Paying Agent To Hold Money in Trust........ 30
Section 2.05. Noteholder Lists........................... 31
Section 2.06. Transfer and Exchange...................... 31
Section 2.07. Replacement Notes.......................... 31
Section 2.08. Outstanding Notes.......................... 32
Section 2.09. Treasury Notes............................. 32
Section 2.10. Temporary Notes............................ 33
Section 2.11. Cancellation............................... 33
Section 2.12. Defaulted Interest......................... 33
Section 2.13. CUSIP Number............................... 34
Section 2.14. Deposit of Moneys.......................... 34
ARTICLE THREE
REDEMPTION OF NOTES
Section 3.01. Notices to the Trustee..................... 34
Section 3.02. Selection of Notes To Be Redeemed.......... 35
Section 3.03. Notice of Redemption....................... 35
Section 3.04. Effect of Notice of Redemption............. 36
Section 3.05. Deposit of Redemption Price................ 37
_______________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-i-
Section 3.06. Notes Redeemed or Purchased in Part........ 37
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes........................... 37
Section 4.02. Maintenance of Office or Agency............ 38
Section 4.03. Corporate Existence........................ 38
Section 4.04. Payment of Taxes and Other Claims.......... 39
Section 4.05. Maintenance of Properties; Insurance;
Books and Records; Compliance with Law... 39
Section 4.06. Compliance Certificate..................... 40
Section 4.07. Reporting Requirements..................... 41
Section 4.08. Limitation on Indebtedness................. 42
Section 4.09. Limitation on Restricted Payments.......... 45
Section 4.10. Limitation on Issuance and Sale of
Preferred Stock by Restricted
Subsidiaries............................. 48
Section 4.11. Limitation on Liens........................ 48
Section 4.12. Change of Control.......................... 48
Section 4.13. Disposition of Proceeds of Asset Sales..... 51
Section 4.14. Limitation on Transactions with Affiliates. 55
Section 4.15. Limitation on Dividends and Other
Payment Restrictions Affecting
Restricted Subsidiaries.................. 56
Section 4.16. Limitation on Other Senior Subordinated
Indebtedness............................. 57
Section 4.17. Limitation on Designations of
Unrestricted Subsidiaries................ 57
Section 4.18. Limitation on Guarantees by Restricted
Subsidiaries............................. 58
Section 4.19. Waiver of Stay, Extension or Usury Laws.... 58
_______________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-ii-
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc................ 59
Section 5.02. Successor Substituted...................... 60
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default.......................... 61
Section 6.02. Acceleration............................... 64
Section 6.03. Other Remedies............................. 66
Section 6.04. Waiver of Past Defaults.................... 66
Section 6.05. Control by Majority........................ 66
Section 6.06. Limitation on Suits........................ 67
Section 6.07. Right of Holders To Receive Payment........ 67
Section 6.08. Collection Suit by Trustee................. 68
Section 6.09. Trustee May File Proofs of Claims.......... 68
Section 6.10. Priorities................................. 69
Section 6.11. Undertaking for Costs...................... 69
Section 6.12. Restoration of Rights and Remedies ........ 69
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties..................................... 70
Section 7.02. Rights of Trustee.......................... 71
Section 7.03. Individual Rights of Trustee............... 72
Section 7.04. Trustee's Disclaimer....................... 72
Section 7.05. Notice of Default.......................... 73
Section 7.06. Money Held in Trust........................ 73
Section 7.07. Reports by Trustee to Holders.............. 73
Section 7.08. Compensation and Indemnity................. 74
Section 7.09. Replacement of Trustee..................... 75
Section 7.10. Successor Trustee by Merger, etc........... 76
Section 7.11. Eligibility; Disqualification.............. 76
Section 7.12. Preferential Collection of Claims
Against Company.......................... 77
_______________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-iii-
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's
Obligations.............................. 77
Section 8.02. Legal Defeasance and Covenant Defeasance... 79
Section 8.03. Application of Trust Money................. 83
Section 8.04. Repayment to Company or Guarantors......... 83
Section 8.05. Reinstatement.............................. 84
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders................. 84
Section 9.02. With Consent of Holders.................... 85
Section 9.03. Compliance with Trust Indenture Act........ 87
Section 9.04. Revocation and Effect of Consents.......... 87
Section 9.05. Notation on or Exchange of Notes........... 88
Section 9.06. Trustee May Sign Amendments, etc........... 88
ARTICLE TEN
GUARANTEE OF NOTES
Section 10.01. Guarantee.................................. 88
Section 10.02. Execution and Delivery of Guarantee........ 91
Section 10.03. Additional Guarantors...................... 92
Section 10.04. Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness......... 92
Section 10.05. Payment Over of Proceeds upon
Dissolution, etc., of a Guarantor........ 93
Section 10.06. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness in
Default.................................. 94
Section 10.07. Release of a Guarantor..................... 95
Section 10.08. Waiver of Subrogation...................... 97
_______________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-iv-
Section 10.09. Guarantee Provisions Solely to
Define Relative Rights................... 98
Section 10.10. Trustee To Effectuate Subordination
of Guarantee Obligations................. 99
Section 10.11. No Waiver of Guarantee
Subordination Provisions................. 99
Section 10.12. Guarantors To Give Notice to Trustee....... 100
Section 10.13. Reliance on Judicial Order or Certificate
of Liquidating Agent Regarding
Dissolution, etc., of Guarantors......... 101
Section 10.14. Rights of Trustee as a Holder of
Guarantor Senior Indebtedness;
Preservation of Trustee's Rights......... 102
Section 10.15. Article Ten Applicable to Paying Agents.... 102
Section 10.16. No Suspension of Remedies Subject
to Rights of Holders of Guarantor
Senior Indebtedness ..................... 102
Section 10.17. Trustee's Relation to Guarantor
Senior Indebtedness...................... 103
Section 10.18. Subrogation................................ 103
ARTICLE ELEVEN
SUBORDINATION OF NOTES
Section 11.01. Notes Subordinate to Senior Indebtedness... 104
Section 11.02. Payment Over of Proceeds upon
Dissolution, etc......................... 104
Section 11.03. Suspension of Payment When Senior
Indebtedness in Default.................. 106
Section 11.04. Trustee's Relation to Senior Indebtedness.. 108
Section 11.05. Subrogation to Rights of Holders of
Senior Indebtedness...................... 108
Section 11.06. Provisions Solely To Define
Relative Rights.......................... 109
Section 11.07. Trustee To Effectuate Subordination........ 110
Section 11.08. No Waiver of Subordination Provisions...... 110
_______________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-v-
Section 11.09. Notice to Trustee.......................... 111
Section 11.10. Reliance on Judicial Order or
Certificate of Liquidating Agent......... 112
Section 11.11. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation
of Trustee's Rights...................... 113
Section 11.12. Article Applicable to Paying Agents........ 113
Section 11.13. No Suspension of Remedies.................. 113
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. Trust Indenture Act of 1939................ 114
Section 12.02. Notices.................................... 114
Section 12.03. Communication by Holders with Other
Holders.................................. 115
Section 12.04. Certificate and Opinion as to
Conditions Precedent..................... 115
Section 12.05. Statements Required in Certificate
or Opinion............................... 116
Section 12.06. Rules by Trustee, Paying Agent, Registrar.. 116
Section 12.07. Governing Law.............................. 116
Section 12.08. No Interpretation of Other Agreements...... 117
Section 12.09. No Recourse Against Others................. 117
Section 12.10. Successors................................. 117
Section 12.11. Duplicate Originals........................ 117
Section 12.12. Separability............................... 117
Section 12.13. Table of Contents, Headings, etc........... 117
Section 12.14. Benefits of Indenture...................... 118
SIGNATURES
EXHIBIT A Form of Note
EXHIBIT B Form of Guarantee
_______________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-vi-
INDENTURE, dated as of May 15, 1996, between
Foodbrands America, Inc., a corporation incorporated under the
laws of the State of Delaware (the "Company"), as issuer,
Brennan Packing Co., Inc., a Delaware corporation, Continental
Deli Foods, Inc., a Delaware corporation, Doskocil Food Service
Company, L.L.C., an Oklahoma limited liability company,
Specialty Brands, Inc., a Delaware corporation, FBAI
Investments Corporation, an Oklahoma corporation, KPR Holdings,
L.P., a Delaware limited partnership, National Service Center,
Inc., a Delaware corporation, and RKR-GP, Inc., a Delaware
corporation, as guarantors (each a "Guarantor," and
collectively, the "Guarantors") and Liberty Bank and Trust
Company of Oklahoma City, National Association, as trustee (the
"Trustee").
Each party hereto agrees as follows for the benefit
of each other party and for the equal and ratable benefit of
the Holders of the Company's 10 3/4% Senior Subordinated Notes
due 2006.
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"9-3/4% Indenture" means the Indenture dated as of
April 28, 1993 between the Company as successor to Doskocil
Companies Incorporated, and First Fidelity Bank, National
Association, New York, as trustee, as amended.
"9-3/4 Notes" means the 9-3/4% Senior Subordinated
Redeemable Securities due 2000 of the Company issued pursuant
to the 9-3/4% Indenture.
"Acquired Indebtedness" means Indebtedness of a
person (a) assumed in connection with an Asset Acquisition from
such person or (b) existing at the time such person becomes a
Subsidiary of any other person, but not including Indebtedness
incurred in connection with, or in anticipation of such person
becoming a Subsidiary.
"Affiliate" means, with respect to any specified
person, any other person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified person.
"Agent" means any Registrar or Paying Agent of the
Notes.
"Applicable Premium" means, with respect to a Note,
the greater of (i) 1.0% of the then outstanding principal
amount of such Note or (ii) the excess of (A) the present value
of the required interest and principal payments due on such
Note, computed using a discount rate equal to the Treasury Rate
plus 100 basis points, over (B) the then outstanding principal
amount of such Note; provided that in no event will the
Applicable Premium exceed the amount of the applicable
redemption price upon an optional redemption less 100%, at any
time on or after May 15, 2001.
"Asset Acquisition" means (a) an Investment by the
Company or any Subsidiary of the Company in any other person
pursuant to which such person shall become a Restricted
Subsidiary, or shall be merged with or into the Company or any
Restricted Subsidiary, or (b) the acquisition by the Company or
any Restricted Subsidiary of the assets of any person which
constitute all or substantially all of the assets of such
person or any division, operating unit or line of business of
such person.
"Asset Sale" means any sale, issuance, conveyance,
transfer, lease or other disposition by the Company or any
Restricted Subsidiary to any person other than the Company or a
Restricted Subsidiary, in one or a series of related
transactions, of: (a) any Capital Stock of any Subsidiary of
the Company; (b) all or substantially all of the properties and
assets of any division or line of business of the Company or
any Restricted Subsidiary; or (c) any other properties or
assets of the Company or a Restricted Subsidiary (including
proprietary brand names, whether registered or otherwise) other
than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include
(i) any sale, issuance, conveyance, transfer, lease or other
disposition of properties or assets that is governed by the
provisions described under Article Five hereof, (ii) sales of
obsolete equipment or of real property no longer used or useful
in the Company's business, (iii) any direct or indirect sale of
inventory or accounts receivable to the extent the proceeds
thereof are required to repay a lender or lenders that are owed
Indebtedness of the Company or any Restricted Subsidiary that
is secured by such inventory and accounts receivable and
(iv) any sale, issuance, conveyance, transfer, lease or other
disposition of properties or assets, whether in one transaction
or a series of related transactions, involving assets with a
fair market value, as determined by the Company, not in excess
of $1,000,000.
"Asset Sale Offer" shall have the meaning set forth
in Section 4.13(b).
"Asset Sale Offer Price" shall have the meaning set
forth in Section 4.13(b).
"Asset Sale Purchase Date" shall have the meaning set
forth in Section 4.13(b).
"Average Life to Stated Maturity" means, with respect
to any Indebtedness, as at any date of determination, the
quotient obtained by dividing (a) the sum of the products of
(i) the number of years from such date to the date or dates of
each successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Indebtedness
multiplied by (ii) the amount of each such principal payment by
(b) the sum of all such principal payments.
"Bank Agent" means Chemical Bank or any successor or
replacement agent under the Credit Agreement.
"Bank Warrants" means the warrants evidencing the
right to purchase shares of Common Stock pursuant to the
Warrant Agreement dated as of October 31, 1991, between the
Company and the banks named therein as in effect on the date
hereof.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar federal, state or foreign law for the
relief of debtors.
"Board of Directors" means the board of directors of
the Company or any Guarantor, as the case may be, or any duly
authorized committee of such board.
"Board Resolution" means a copy of a resolution duly
adopted by the Board of Directors of the Company or any
Guarantor, as the case may be, certified by the Secretary or an
Assistant Secretary of the Company or the applicable Guarantor,
as the case may be, and in full force and effect on the date of
such certification.
"Business Day" means each day which is not a day on
which banking institutions in The City of New York, State of
New York, or the city in which the Trustee has its Corporate
Trust Office, are authorized or obligated by law, regulation or
executive order to close.
"Capital Stock" means, with respect to any person,
any and all shares, interests, participations, rights in or
other equivalents (however designated) of such person's capital
stock, and any rights (other than debt securities convertible
into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
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 consistently applied.
"Cash Equivalents" means, at any time: (i) any
evidence of Indebtedness with a maturity of 365 days or less
issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof);
(ii) certificates of deposit or acceptances with a maturity of
365 days or less of any financial institution that is a member
of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000;
(iii) commercial paper with a maturity of 365 days or less
issued by a corporation that is not an Affiliate of the Company
organized under the laws of any state of the United States or
the District of Columbia and rated at least A-1 by S&P or at
least P-1 by Moody's or at least an equivalent rating category
of another nationally recognized securities rating agency;
(iv) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or
unconditionally guaranteed by the government of the United
States of America or issued by any agency thereof and backed by
the full faith and credit of the United States of America, in
each case maturing within 365 days from the date of
acquisition; provided that the terms of such agreements comply
with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions With Securities Dealers
and Others, as adopted by the Comptroller of the Currency on
October 31, 1985; and (v) money market funds organized under
the laws of the United States of America or any state thereof
that invest substantially all of their assets in any types of
investments described in clause (i), (ii) or (iii) above.
"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 Securities
Exchange Act), excluding Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Securities 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; (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
Redeemable Capital Stock) of the surviving or transferee
corporation 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 Securities Exchange Act),
excluding Permitted Holders, is the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Securities 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; (c) during any consecutive two-year
period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together
with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders
of the Company was approved by a vote of 66-2/3% of the
directors then still in office who (i) are entitled to vote to
elect such new director or who are entitled to nominate such
director pursuant to the Company's bylaws, the JLL Agreement,
or the Airlie Agreement and (ii) were either directors at the
beginning of such period or persons whose election as directors
or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of
Directors of the Company then in office; (d) during any
consecutive two-year period individuals who were Non Investor
Directors (as defined below) at the beginning of such period
(together with any new Non Investor Directors whose election by
the Board of Directors of the Company or whose nomination for
election by the stockholder of the Company was approved by a
vote of 66-2/3% of the Non Investor Directors then still in
office who were either Non Investor Directors at the beginning
of such period or whose election or nomination for election as
directors was so approved) cease for any reason to constitute a
majority of the Non Investor Directors then in office or
(e) JLL assigns any of its rights under Section 4.6 of the JLL
Agreement, or any successor provisions, to nominate directors
of the Company and at any time thereafter a majority of the
directors of the Company designated pursuant to the JLL
Agreement are persons who were not directors 60 days prior to
the date of such assignment or persons whose election or
nomination for election was approved by 66-2/3% of the Non
Investor Directors. For purposes of the foregoing, a "Non
Investor Director" means a director of the Company other than a
director nominated, designated or elected pursuant to the JLL
Agreement or the Airlie Agreement.
"Change of Control Date" shall have the meaning set
forth in Section 4.12.
"Change of Control Offer" shall have the meaning set
forth in Section 4.12.
"Change of Control Purchase Date" shall have the
meaning set forth in Section 4.12.
"Change of Control Purchase Price" shall have the
meaning set forth in Section 4.12.
"Common Stock" means, with respect to any person, any
and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or nonvoting)
of, such person's common stock, whether outstanding at the Issue
Date or issued after the Issue Date, and includes, without
limitation, all series and classes of such common stock.
"Company" means the party named as such in this
Indenture until a successor replaces it (or any previous
successor) pursuant to this Indenture, and thereafter means
such successor.
"Consolidated EBITDA" means, with respect to the
Company for any period, (i) the sum of, without duplication,
the amount for such period, taken as a single accounting
period, of (a) Consolidated Net Income, (b) Consolidated Non-
cash Charges, (c) Consolidated Interest Expense and
(d) Consolidated Income Tax Expense, less (ii) non-cash items
increasing Consolidated Net Income for such period.
"Consolidated Fixed Charge Coverage Ratio" means,
with respect to the Company, the ratio of the aggregate amount
of Consolidated EBITDA of the Company for the four full fiscal
quarters for which financial information in respect thereof is
available immediately preceding the date of the transaction
(the "Transaction Date") giving rise to the need to calculate
the Consolidated Fixed Charge Coverage Ratio (such four full
fiscal quarter period being referred to herein as the "Four
Quarter Period") to the aggregate amount of Consolidated Fixed
Charges of the Company for the Four Quarter Period. In
addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving
effect on a pro forma basis for the period of such calculation
to, without duplication, (a) the incurrence of any Indebtedness
of the Company or any of the Restricted Subsidiaries during the
period commencing on the first day of the Four Quarter Period
to and including the Transaction Date (the "Reference Period"),
including, without limitation, the incurrence of the
Indebtedness giving rise to the need to make such calculation
(and the application of the net proceeds thereof), as if such
incurrence (and application) occurred on the first day of the
Reference Period, (b) an adjustment to eliminate or include, as
the case may be, the Consolidated EBITDA and Consolidated Fixed
Charges of such person directly or indirectly attributable to
assets which are the subject of any Asset Sale or Asset
Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as
a result of the Company or one of the Restricted Subsidiaries
(including any person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness) occurring
during the Reference Period, as if such Asset Sale (after
giving effect to any Designation of Unrestricted Subsidiaries)
or Asset Acquisition occurred on the first day of the Reference
Period and (c) the retirement of Indebtedness during the
Reference Period which cannot thereafter be reborrowed
occurring as if retired on the first day of the Reference
Period. For purposes of calculating "Consolidated Fixed
Charges" for this "Consolidated Fixed Charge Coverage Ratio,"
interest on Indebtedness incurred during the Four Quarter
Period under any revolving credit facility which can be
borrowed and repaid without reducing the commitments thereunder
shall be the actual interest during the Four Quarter Period.
Furthermore, in calculating "Consolidated Fixed Charges" for
purposes of determining the denominator (but not the numerator)
of this "Consolidated Fixed Charge Coverage Ratio,"
(i) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will
continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date, (ii) if
interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest
rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the Transaction Date will be deemed
to have been in effect during the Reference Period; and (iii)
notwithstanding clauses (i) and (ii) 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 have accrued 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 guaranteed
Indebtedness of a third person, the above clauses shall give
effect to the incurrence of such guaranteed Indebtedness as if
the Company or such Restricted Subsidiary had directly incurred
or otherwise assumed such guaranteed Indebtedness.
"Consolidated Fixed Charges" means, with respect to
the Company for any period, the sum of, without duplication,
the amounts for such period of (i) Consolidated Interest
Expense and (ii) the aggregate amount of dividends and other
distributions paid or accrued during such period in respect of
Redeemable Capital Stock of the Company and the Restricted
Subsidiaries on a consolidated basis.
"Consolidated Income Tax Expense" means, with respect
to the Company for any period, the provision for federal,
state, local and foreign income taxes of the Company and the
Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect
to the Company for any period, without duplication, the sum of
(i) the interest expense of the Company and the Restricted
Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, excluding the amortization of
fees related to the issuance of the Notes and fees (other than
letter of credit fees) related to the initial execution and
delivery of the Credit Agreement, but including, without
limitation, (a) any amortization of debt discount, (b) the net
cost under Interest Rate Protection Obligations (including any
amortization of discounts), (c) the interest portion of any
deferred payment obligation which in accordance with GAAP is
required to be reflected on an income statement, (d) all
commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing
and (e) all accrued interest and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to
be paid or accrued by the Company and the Restricted
Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to the
Company, 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 consistently applied
adjusted, to the extent included in calculating such net
income, by excluding, without duplication, (i) all
extraordinary gains or losses (net of fees and expenses
relating to the transaction giving rise thereto) and the non-
recurring cumulative effect of accounting changes, (ii) the
portion of net income (or loss) of the Company and the
Restricted Subsidiaries allocable to minority interests in
unconsolidated persons to the extent that cash dividends or
distributions have not actually been received by the Company or
one of the Restricted Subsidiaries, (iii) net income (or loss)
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,
(iv) any gain or loss realized upon the termination of any
employee pension benefit plan, on an after-tax basis, (v) gains
or losses in respect of any Asset Sales by the Company or one
of the Restricted Subsidiaries (net of fees and expenses
relating to the transaction giving rise thereto), on an after-
tax basis, (vi) reduction of reorganization value in excess of
amounts allocable to tangible assets resulting from the
utilization of net operating losses, and (vii) the net income
of any Restricted Subsidiary of the Company to the extent that
the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders.
"Consolidated Net Tangible Assets" means, with
respect to the Company at any date, the total assets shown on
the consolidated balance sheet of the Company and the
Restricted Subsidiaries prepared in accordance with GAAP as of
the last day of the immediately preceding fiscal quarter less
the sum of (a) all current liabilities plus (b) goodwill and
other intangibles shown on such balance sheet.
"Consolidated Non-cash Charges" means, with respect
to the Company for any period, the aggregate depreciation,
amortization and other non-cash expenses (including, without
limitation, non-cash reserves and non-cash charges) of the
Company and the Restricted Subsidiaries reducing Consolidated
Net Income of the Company and the Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance
with GAAP.
"control" means, with respect to any 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 corporate trust
office of the Trustee at which at any particular time its
corporate trust business shall be principally administered,
which on the date hereof is 100 North Broadway, Oklahoma City,
Oklahoma 73102, Attention: Corporate Trust Division.
"covenant defeasance" shall have the meaning set
forth in Section 8.02.
"Credit Agreement" means the Credit and Security
Agreement dated as of December 11, 1995, among the Company, as
borrower, Chemical Bank, as agent, and the lenders which are to
become parties from time to time thereto, together with the
related documents thereto (including, without limitation, any
guarantee agreements permitted under this Indenture and
security documents), in each case as such agreement may be
amended (including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (including,
subject to the covenants of this Indenture, adding Guarantors
as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement) or any
successor or replacement agreement permitted under this
Indenture.
"Credit Agreement Obligations" means all monetary
obligations of every nature of the Company or a Restricted
Subsidiary, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters
of credit, fees, expenses and indemnities, from time to time
owed to the lenders, the agent, the co-agents or any collateral
agent under or in respect of the Credit Agreement.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Debt Securities" means any debt securities
(including any guarantee of such securities) issued by the
Company and/or any Guarantor, whether in a public offering or a
private placement.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Depository" shall mean The Depository Trust Company,
New York, New York, or any successor thereto registered under
the Securities Exchange Act or other applicable statute or
regulation.
"Designation" has the meaning set forth in Section
4.17.
"Designation Amount" has the meaning set forth in
Section 4.17.
"Designated Senior Indebtedness" means (i) all Senior
Indebtedness and Guarantor Senior Indebtedness under the Credit
Agreement Obligations and (ii) any other Senior Indebtedness
(or for certain purposes more fully described in this
Indenture, Guarantor Senior Indebtedness) which (a) at the time
of incurrence exceeds $25,000,000 in aggregate principal amount
and (b) is specifically designated by the Company (or, in the
case of Guarantor Senior Indebtedness, by the relevant
Guarantor) in the instrument evidencing such Senior
Indebtedness or Guarantor Senior Indebtedness as "Designated
Senior Indebtedness".
"Event of Default" has the meaning set forth in
Section 6.01.
"Excess Proceeds" shall have the meaning set forth in
Section 4.13.
"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. Fair
Market Value shall be determined by the Board of Directors of
the Company acting in good faith and shall be evidenced by a
Board Resolution of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles
in the United States set forth in the Statements of Financial
Accounting Standards and the Interpretations, Accounting
Principles Board Opinions and AICPA Accounting Research
Bulletins which are applicable as of the Issue Date and
consistently applied.
"guarantee" means, as applied to any obligation,
(i) a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business),
direct or indirect, in any manner, of any part or all of such
obligation and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to
assure in any way the payment or performance (or payment of
damages in the event of non-performance) of all or any part of
such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Guarantee" means the guarantee of the Notes by each
Guarantor pursuant to the provisions contained herein.
"Guarantor" means each person who delivers a
Guarantee and shall include any additional person delivering a
Guarantee pursuant to Section 4.19 and shall further include
any successor to any such person pursuant to this Indenture,
and thereafter means such successor.
"Guarantor Senior Indebtedness" means, with respect
to any Guarantor, the principal of and interest on any
Indebtedness of such Guarantor, whether outstanding on the
Issue Date or thereafter created, incurred or assumed, unless,
in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same
is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Guarantee of such
Guarantor. Without limiting the generality of the foregoing,
"Guarantor Senior Indebtedness" shall also include the
principal of and interest (including interest accruing after
the filing of a petition initiating any proceeding under any
Bankruptcy Law whether or not such interest is an allowable
claim in such proceeding) on, and all other amounts owing in
respect of (i) all Credit Agreement Obligations and Other
Designated Guarantor Senior Indebtedness Obligations, if any,
of such Guarantor and (ii) all Related Currency and Interest
Rate Protection Obligations, if any, of such Guarantor.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness"
shall not include (a) Indebtedness evidenced by the Guarantee
of such Guarantor, (b) Indebtedness that is expressly
subordinate or junior in right of payment to any Guarantor
Senior Indebtedness of such Guarantor, (c) Indebtedness which,
when incurred and without respect to any election under Section
1111(b) of Title 11, United States Code, is by its terms
without recourse to such Guarantor, (d) any repurchase,
redemption or other obligation in respect of Redeemable Capital
Stock of such Guarantor, (e) to the extent it might constitute
Indebtedness, amounts owing for goods, materials or services
purchased in the ordinary course of business or consisting of
trade payables or other current liabilities (other than any
current liabilities owing under the Credit Agreement
Obligations or the current portion of any long-term
Indebtedness which would constitute Guarantor Senior
Indebtedness but for the operation of this clause (e)), (f) to
the extent it might constitute Indebtedness, amounts owed by
such Guarantor for compensation to employees or for services
rendered to such Guarantor, (g) to the extent it might
constitute Indebtedness, any liability for federal, state,
local or other taxes owed or owing by such Guarantor,
(h) Indebtedness of such Guarantor to a Subsidiary of the
Company or any other Affiliate of the Company or any of such
Affiliate's Subsidiaries, and (i) that portion of any
Indebtedness of such Guarantor which at the time of issuance is
issued in violation of this Indenture (but, as to any such
Indebtedness, no such violation shall be deemed to exist for
purposes of this clause (i) if the holder(s) of such
Indebtedness or their representative or such Guarantor shall
have furnished to the Trustee an opinion of independent legal
counsel, unqualified in all material respects, addressed to the
Trustee (which legal counsel may, as to matters of fact, rely
upon a certificate of such Guarantor) to the effect that the
incurrence of such Indebtedness does not violate the provisions
of this Indenture).
"Holder" or "Noteholder" means the person in whose
name a Note is registered on the Registrar's books. Each
Holder of a Note shall also be deemed to hold a Guarantee of
each Guarantor as provided in Article Ten hereof.
"Indebtedness" means, with respect to any person,
without duplication, (a) all liabilities of such person for
borrowed money or for the deferred purchase price of property
or services, excluding any trade payables and other accrued
current liabilities incurred in the ordinary course of
business, but including, without limitation, all obligations,
contingent or otherwise, of such person in connection with any
letter of credit, banker's acceptance or other similar credit
transaction, (b) all obligations of such person evidenced by
bonds, notes, debentures or other similar instruments, (c) all
Indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property
acquired by such person (even if the rights and remedies of the
seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), but
excluding trade accounts payable arising in the ordinary course
of business, (d) all Capitalized Lease Obligations of such
person, (e) all Indebtedness referred to in the preceding
clauses of other persons and all dividends of other persons,
the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon property (including,
without limitation, accounts and contract rights) owned by such
person, even though such person has not assumed or become
liable for the payment of such Indebtedness (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),
(f) all guarantees of Indebtedness referred to in this
definition by such person, (g) all Redeemable Capital Stock
valued at the greater of its voluntary or involuntary maximum
fixed repurchase price plus accrued dividends, (h) all
obligations under or in respect of currency exchange contracts
and Interest Rate Protection Obligations of such person and
(i) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred
to in clauses (a) through (h) above. For purposes hereof, (x)
the "maximum fixed repurchase price" of any Redeemable Capital
Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable
Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required
to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such
Redeemable Capital Stock, such Fair Market Value shall be
determined in good faith by the board of directors of the
issuer of such Redeemable Capital Stock and (y) Indebtedness is
deemed to be incurred pursuant to a revolving credit facility
each time an advance is made thereunder. For purposes of
Section 4.08, in determining the principal amount of any
Indebtedness to be incurred by the Company or a Restricted
Subsidiary or which is outstanding at any date, the principal
amount of any Indebtedness which provides that an amount less
than the principal amount thereof shall be due upon any
declaration of acceleration thereof shall be the accreted value
thereof at the date of determination. When any person becomes
a Restricted Subsidiary, there shall be deemed to have been an
incurrence by such Restricted Subsidiary of all Indebtedness
for which it is liable at the time it becomes a Restricted
Subsidiary. If the Company or any of the Restricted
Subsidiaries, directly or indirectly, guarantees Indebtedness
of a third person, there shall be deemed to be an incurrence of
such guaranteed Indebtedness as if the Company or such
Restricted Subsidiary had directly incurred or otherwise
assumed such guaranteed Indebtedness.
"Indenture" means this Indenture, as amended,
modified or supplemented from time to time.
"interest" means, with respect to any Note, the
amount of all interest accruing on such Note, including all
interest accruing subsequent to the occurrence of any events
specified in Sections 6.01(j) and (k) or which would have
accrued but for any such event, whether or not such claims are
allowable under applicable law.
"Interest Payment Date" means the Stated Maturity of
an installment of interest on the Notes, as set forth therein.
"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.
"Investment" means, with respect to any person, any
direct or indirect loan or other extension of credit, 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 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" shall exclude
extensions of trade credit by any person in the ordinary course
of business in accordance with normal trade practices of such
person. In addition to the foregoing, any foreign exchange
contract, currency swap or similar agreement shall constitute
an Investment hereunder.
"Issue Date" means May 15, 1996.
"JLL" means Joseph Littlejohn & Levy Associates, L.P.
"legal defeasance" shall have the meaning set forth
in Section 8.02.
"Leveraged Subsidiary" means any Restricted
Subsidiary that has incurred Indebtedness (other than Acquired
Indebtedness pursuant to the first paragraph of Section 4.08
and Indebtedness described in clauses (3) through (8) and (10)
of the second paragraph of Section 4.08 and any permitted
refinancings or replacements thereof incurred under clause (9)
of the second paragraph of Section 4.08) pursuant to
Section 4.08 for so long as such Indebtedness, or any
refinancing thereof, is outstanding.
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation,
assignment for security, claim, or preference or priority or
other encumbrance upon or with respect to any property of any
kind. A person shall be deemed to own subject to a Lien any
property which such person 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.
"Maturity Date" means, with respect to any Note, the
date on which any principal of such Note 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.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds thereof in the form of cash or Cash
Equivalents or marketable securities (valued at their market
value on the date of receipt), including, without limitation,
payments in respect of deferred payment obligations when
received in the form of cash or Cash Equivalents (except to the
extent that such obligations are financed or sold with recourse
to the Company or any Restricted Subsidiary) net of
(i) brokerage commissions and other fees and expenses
(including, without limitation, fees and expenses of legal
counsel and investment bankers) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset
Sale, (iii) amounts required to be paid and which have been
paid, or amounts required to be pledged and which are pledged,
to secure Indebtedness owed, to any person (other than the
Company or any Restricted Subsidiary) owning a beneficial
interest in the assets subject to the Asset Sale (which, in the
case of a Lien, is being pledged to permanently reduce
Indebtedness secured by such Lien) and (iv) appropriate amounts
to be provided by the Company or any Restricted Subsidiary, as
the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and
retained by the Company or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated
with such Asset Sale, all as reflected in an Officers'
Certificate delivered to the Trustee.
"Non-payment Default" means, for purposes of Article
Eleven hereof, any default (other than a Payment Default) with
respect to any Designated Senior Indebtedness of the Company or
any Guarantor pursuant to which the maturity thereof may be
accelerated.
"Notes" means the notes that are issued under this
Indenture, as amended or supplemented from time to time
pursuant to this Indenture.
"Officer" means the Chairman, the President, the
Chief Executive Officer, any Senior Vice President, any Vice
President or the Secretary of the Company or a Guarantor, as
the case may be.
"Officers' Certificate" means a certificate signed by
two Officers or by an Officer and an Assistant Treasurer or
Assistant Secretary of the Company or a Guarantor, as the case
may be.
"Opinion of Counsel" means a written opinion from
legal counsel who is reasonably acceptable to the Trustee.
Subject to any express provision hereof, the counsel may be an
employee of or counsel to the Company.
"Other Designated Senior Indebtedness Obligations"
means all monetary obligations of every nature of the Company
or a Guarantor, as applicable, including, without limitation,
obligations to pay principal and interest, reimbursement
obligations under letters of credit, fees, expenses and
indemnities, from time to time owed (by reason of a guarantee
or otherwise) to any holder of Designated Senior Indebtedness
in respect of Designated Senior Indebtedness.
"Pari Passu Indebtedness" means any Indebtedness of
the Company or any Guarantor ranking pari passu in right of
payment with the Notes or the Guarantees, as applicable.
"Paying Agent" has the meaning set forth in Section
2.03, except that, for the purposes of Sections 4.12 and 4.13
and Articles Three and Eight, the Paying Agent shall not be the
Company or a Subsidiary of the Company or any of their
respective Affiliates.
"Payment Blockage Period" shall have the meaning set
forth in Section 10.03.
"Payment Default" means any default in the payment
when due (whether at Stated Maturity, by acceleration or
otherwise) of principal or interest on, or of unreimbursed
amounts under drawn letters of credit or fees relating to
letters of credit constituting, any Senior Indebtedness or
Guarantor Senior Indebtedness, as applicable of the Company or
any Guarantor.
"Permitted Holders" means (i) JLL and its Affiliates
and (ii) any "group" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act) comprised solely of
JLL and its Affiliates and The Airlie Group, L.P. and its
Affiliates (it being understood that a "group" that includes
any other person shall not be a Permitted Holder).
"Permitted Investment" means any of the following:
(a) Investments in any Restricted Subsidiary (including any
person that pursuant to such Investment becomes a Restricted
Subsidiary) and any person that is merged or consolidated with
or into, or transfers or conveys all or substantially all of
its assets to, the Company or any Restricted Subsidiary at the
time such Investment is made; (b) Investments in Cash
Equivalents; (c) Investments in deposits with respect to leases
or utilities provided to third parties in the ordinary course
of business; (d) Investments in the Notes; (e) Investments in
Interest Rate Protection Agreements and currency exchange
contracts permitted by Section 4.08 and Related Currency and
Interest Rate Protection Obligations; (f) loans or advances to
officers, employees or consultants of the Company and its
Restricted Subsidiaries in the ordinary course of business for
bona fide business purposes of the Company and the Restricted
Subsidiaries (including travel and moving expenses) not in
excess of $1,000,000 in the aggregate at any one time
outstanding; (g) loans to any 401(k) plan qualified under the
Internal Revenue Code and maintained for the benefit of
employees of the Company and the Restricted Subsidiaries; and
(h) Investments in evidences of Indebtedness, securities or
other property received from another person by the Company or
any of the Restricted Subsidiaries in connection with any
bankruptcy proceeding or by reason of a composition or
readjustment of debt or a reorganization of such person or as a
result of foreclosure, perfection or enforcement of any Lien in
exchange for evidences of Indebtedness, securities or other
property of such person held by the Company or any of the
Restricted Subsidiaries, or for other liabilities or
obligations of such other person to the Company or any of the
Restricted Subsidiaries that were created in accordance with
the terms of this Indenture.
"Permitted Junior Securities" means, (i) for purposes
of Article Eleven (so long as the effect of any exclusion
employing this definition is not to cause the Notes to be
treated in any case or proceeding or similar event described in
clauses (a), (b) or (c) of Section 11.02 as part of the same
class of claims as the Senior Indebtedness or any class of
claims pari passu with, or senior to, the Senior Indebtedness
for purposes of any payment or distribution) debt or equity
securities of the Company or any successor corporation provided
for by a plan of reorganization or readjustment that are
subordinated at least to the same extent that the Notes are
subordinated to the payment of all Senior Indebtedness;
provided that (a) if a new corporation results from such
reorganization or readjustment, such corporation assumes any
Senior Indebtedness not paid in full in cash or Cash
Equivalents in connection with such reorganization or
readjustment and (b) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders,
altered or impaired by such reorganization or readjustment, and
(ii) for purposes of Article Ten, any guarantee by a Guarantor
of a Permitted Junior Security of the Company described in
clause (i) above; provided that such guarantee is subordinated
to the payment of all Guarantor Senior Indebtedness at least to
the same extent that the Guarantees are subordinated to the
payment of all Guarantor Senior Indebtedness, and such
guarantee is subject to provisions substantially similar to
those set forth in Section 10.07.
"person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Note" means, with respect to any
particular Note, every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular
Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.07 hereof in
exchange for a mutilated Note or in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any person,
any and all shares, interests, participations or other
equivalents (however designated) of such person's preferred or
preference stock whether now outstanding or issued after the
Issue Date, including, without limitation, all classes and
series of preferred or preference stock of such person.
"principal" means, with respect to any debt security,
the principal of the security plus, with respect to the Notes
only, the premium, if any, on the security and any interest on
overdue principal.
"Public Equity Offering" means an underwritten public
offering of Capital Stock (other than Disqualified Capital
Stock) of the Company made on a primary basis by the Company
pursuant to a registration statement filed with and declared
effective by the SEC in accordance with the Securities Act.
"Purchase Money Obligation" means any Indebtedness
secured by a Lien on assets related to the business of the
Company or the Restricted Subsidiaries, and any additions and
accessions thereto, which are purchased or constructed by the
Company or any Restricted Subsidiary at any time after the
Issue Date; provided that (i) any security agreement or
conditional sales or other title retention contract pursuant to
which the Lien on such assets is created (collectively a
"Security Agreement") shall be entered into within 90 days
after the purchase or substantial completion of the
construction of such assets and shall at all times be confined
solely to the assets so purchased or acquired, any additions
and accessions thereto and any proceeds therefrom, (ii) at no
time shall the aggregate principal amount of the outstanding
Indebtedness secured thereby be increased, except in connection
with the purchase of additions and accessions thereto and
except in respect of fees and other obligations in respect of
such Indebtedness and (iii) (A) the aggregate outstanding
principal amount of Indebtedness secured thereby (determined on
a per asset basis in the case of any additions and accessions)
shall not at the time such Security Agreement is entered into
exceed 100% of the purchase price to the Company or any
Restricted Subsidiary of the assets subject thereto or (B) the
Indebtedness secured thereby shall be with recourse solely to
the assets so purchased or acquired, any additions and
accessions thereto and any proceeds therefrom.
"Redeemable Capital Stock" means any class or series
of Capital Stock that, either by its terms, by the terms of any
security into which it is convertible or exchangeable or by
contract or otherwise, is, or upon the happening of an event or
passage of time would be, required to be redeemed prior to any
Stated Maturity of the Notes or is redeemable at the option of
the holder thereof at any time prior to any Stated Maturity of
the Notes, or, at the option of the holder thereof, is
convertible into or exchangeable for debt securities at any
time prior to any Stated Maturity of the Notes.
Notwithstanding the foregoing, Redeemable Capital Stock shall
not include the Bank Warrants.
"Redemption Date" means, with respect to any Note to
be redeemed, the date fixed by the Company for such redemption
pursuant to this Indenture and the Notes.
"Redemption Price" means, with respect to any Note to
be redeemed, the price fixed for such redemption pursuant to
the terms of this Indenture and the Notes.
"Registrar" shall have the meaning set forth in
Section 2.03.
"Related Currency and Interest Rate Protection
Obligations" means all monetary obligations of every nature of
the Company or a Guarantor under or in respect of currency
exchange contracts and Interest Rate Protection Obligations of
the Company or such Guarantor either (a) to the extent such
monetary obligations relate to Credit Agreement Obligations or
Other Designated Senior Indebtedness Obligations or (b) to the
extent such monetary obligations are secured by collateral
securing Credit Agreement Obligations or Other Designated
Senior Indebtedness Obligations (in either case, as
conclusively evidenced by an Officers' Certificate of the
Company or such Guarantor delivered to the Trustee at the time
such obligations are initially incurred by the Company or such
Guarantor).
"Replacement Assets" shall have the meaning set forth
in Section 4.13(a).
"Restricted Payment" shall have the meaning set forth
in Section 4.09.
"Restricted Subsidiary" means any Subsidiary of the
Company that has not been designated by the Board of Directors
of the Company, by a Board Resolution of the Company delivered
to the Trustee, as an Unrestricted Subsidiary pursuant to and
in compliance with Section 4.17 of this Indenture. Any such
designation may be revoked by a Board Resolution of the Company
delivered to the Trustee, subject to the provisions of Section
4.17 hereof.
"Revocation" has the meaning ascribed to that term
under Section 4.17.
"S&P" means Standard & Poor's Corporation and its
successors.
"SEC" 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.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Securities Exchange Act" means the Securities
Exchange Act of 1934, as amended from time to time.
"Senior Indebtedness" means the principal of,
premium, if any, and interest on any Indebtedness of the
Company, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing
the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of
payment to the Notes. Without limiting the generality of the
foregoing, "Senior Indebtedness" shall also include the
principal of, premium, if any, and interest (including interest
accruing after the filing of a petition initiating any
proceeding under any Bankruptcy Law whether or not such
interest is an allowable claim in such proceeding) on, and all
other amounts owing in respect of (i) all Credit Agreement
Obligations and Other Designated Senior Indebtedness
Obligations of the Company and (ii) all Related Currency and
Interest Rate Protection Obligations of the Company.
Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (a) Indebtedness evidenced by the Notes, (b)
Indebtedness that is expressly subordinate or junior in right
of payment to any Senior Indebtedness of the Company, (c)
Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code,
is by its terms without recourse to the Company, (d) any
repurchase, redemption or other obligation in respect of
Redeemable Capital Stock of the Company, (e) to the extent it
might constitute Indebtedness, amounts owing for goods,
materials or services purchased in the ordinary course of
business or consisting of trade payables or other current
liabilities (other than any current liabilities owing under the
Credit Agreement Obligations or the current portion of any
long-term Indebtedness which would constitute Senior
Indebtedness but for the operation of this clause (e)), (f) to
the extent it might constitute Indebtedness, amounts owed by
the Company for compensation to employees or for services
rendered to the Company, (g) to the extent it might constitute
Indebtedness, any liability for federal, state, local or other
taxes owed or owing by the Company, (h) Indebtedness of the
Company to a Subsidiary of the Company or any other Affiliate
of the Company or any of such Affiliate's Subsidiaries, and
(i) that portion of any Indebtedness of the Company which at
the time of issuance is issued in violation of this Indenture
(but, as to any such Indebtedness, no such violation shall be
deemed to exist for purposes of this clause (i) if the
holder(s) of such Indebtedness or their representative or the
Company shall have furnished to the Trustee an opinion of
independent legal counsel, unqualified in all material
respects, addressed to the Trustee (which legal counsel may, as
to matters of fact, rely upon a certificate of the Company) to
the effect that the incurrence of such Indebtedness does not
violate the provisions of this Indenture).
"Senior Representative" means the Bank Agent or any
other representatives designated in writing to the Trustee of
the holders of any class or issue of Designated Senior
Indebtedness; provided that, in the absence of a representative
of the type described above, any holder or holders of a
majority of the principal amount outstanding of any class or
issue of Designated Senior Indebtedness may collectively act as
Senior Representative for such class or issue.
"Senior Subordinated Note Obligations" means (i) any
principal of and interest on, and any other amounts owing in
respect of, the Notes payable pursuant to the terms of the
Notes or this Indenture or upon acceleration of the Notes,
including, without limitation, amounts received upon the
exercise of rights of rescission or other rights of action
(including claims for damages) or otherwise, to the extent
relating to the purchase price of the Notes or amounts
corresponding to such principal of, interest, or other amounts
owing with respect to, the Notes and (ii) in the case of any
Guarantor, any obligations with respect to the foregoing or
otherwise under its Guarantee.
"Significant Subsidiary" shall have the same meaning
as in Rule 1.02(v) of Regulation S-X under the Securities Act,
provided that (i) each Guarantor shall in all events be deemed
a Significant Subsidiary and (ii) no Unrestricted Subsidiary
shall be deemed a Significant Subsidiary.
"Specified Indebtedness" means (i) any Senior
Indebtedness, (ii) any Guarantor Senior Indebtedness and
(iii) any Indebtedness of any Restricted Subsidiary (other than
a Guarantor) which is not subordinated to any other
Indebtedness of such Restricted Subsidiary.
"Stated Maturity" means, when used with respect to
any Note or any installment of interest thereon, the date
specified in such Note as the fixed date on which any principal
of such Note or such installment of interest is due and
payable, and when used with respect to any other Indebtedness
or any installments of interest thereon, means any date
specified in the instrument governing such Indebtedness as the
fixed date on which the principal of such Indebtedness, or such
installment of interest thereon, is due and payable.
"Subordinated Indebtedness" means, with respect to
the Company, Indebtedness of the Company which is expressly
subordinated in right of payment to the Notes or, with respect
to any Guarantor, Indebtedness of such Guarantor which is
expressly subordinated in right of payment to the Guarantee of
such Guarantor.
"Subsidiary" means, with respect to any person, (i) a
corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such person, by one or more
Subsidiaries of such person or by such person and one or more
Subsidiaries of such person and (ii) any other person (other
than a corporation), including, without limitation, a joint
venture, in which such person or one or more Subsidiaries of
such person, directly or indirectly, at the date of
determination thereof, has at least a majority ownership
interest entitled to vote in the election of directors,
managers or trustees thereof (or other person performing
similar functions). For purposes of this definition, any
directors' qualifying shares or investments by foreign
nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
"Surviving Entity" shall have the meaning set forth
in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code Section 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Treasury Rate" means, the yield to maturity at the
time of computation of United States Treasury securities with a
constant maturity (as compiled 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 of the Notes following a Change of Control
(or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly
equal to the then remaining Average Life to Stated Maturity of
the Notes; provided that if the Average Life to Stated Maturity
of the Notes is not equal to the constant Maturity of a United
States Treasury security for which a weekly average yield is
given, the Treasury Rate 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 to Stated Maturity of the Notes 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.
"Trustee" means the party named as such in this
Indenture until a successor replaces such party (or any
previous successor) in accordance with the provisions of this
Indenture, and thereafter means such successor.
"Trust Officer" means any officer in the Corporate
Trust Division of the Trustee or any other officer of the
Trustee customarily performing functions similar to those
performed by any of the above-designated officers and also
means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Unrestricted Subsidiary" means a Subsidiary of the
Company (other than a Guarantor) designated as such pursuant to
and in compliance with Section 4.17 of this Indenture. Any
such designation may be revoked by a Board Resolution of the
Company delivered to the Trustee, subject to the provisions of
Section 4.17 hereof.
"U.S. Government Obligations" shall have the meaning
set forth in Section 8.02.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting
power by reason of the happening of any contingency).
"Wholly-Owned Restricted Subsidiary" means any
Restricted Subsidiary of which 100% of the outstanding Capital
Stock is owned by the Company and/or another Wholly-Owned
Restricted Subsidiary. For purposes of this definition, any
directors' qualifying shares or investments by foreign
nationals mandated by applicable law shall be disregarded in
determining the ownership of a Restricted Subsidiary.
Section 1.02. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC;
"indenture notes" means the Notes and the Guarantees;
"indenture noteholder" means a Noteholder or Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee; and
"obligor" on the indenture notes means the Company,
the Guarantors or any other obligor on the Notes.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule and not otherwise defined herein have
the meanings assigned to them therein.
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(a) a term has the meaning assigned to it
(b) words in the singular include the plural, and
words in the plural include the singular.
(c) "or" is not exclusive;
(d) provisions apply to successive events and
transactions;
(e) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles, as in
effect from time to time; provided that for the purposes
of Sections 4.08 through 4.19 and Article Five hereof such
terms shall have the meanings assigned to them in
accordance with GAAP;
(f) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision; and
(g) all references to $ or dollars shall refer to
the lawful currency of the United States of America.
ARTICLE TWO
THE NOTES
Section 2.01. Forms and Dating.
The Notes and the Trustee's certificate of
authentication thereon shall be in substantially the form of
Exhibit A 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 any securities exchange or as may,
consistently herewith, be determined by the Officers executing
such Notes, as evidenced by their execution thereof. The Notes
shall be issuable only in registered form without coupons and
only in denominations of $1,000 and integral multiples thereof.
The definitive Notes and the Guarantees 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 Notes may be listed, all as determined by the
officers executing such Notes, as evidenced by their execution
of such Notes. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the form of the
Notes, annexed hereto as Exhibit A shall constitute, and are
hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Section 2.02. Execution and Authentication.
Two Officers shall execute the Notes on behalf of the
Company by either manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on
the Notes.
If an Officer whose signature is on a Note no longer
holds that office at the time the Trustee authenticates the
Note or at any time thereafter, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of
authentication on the Note. Such signature shall be conclusive
evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate Notes for original
issue in an aggregate principal amount not to exceed
$120,000,000 upon receipt of an Officers' Certificate signed by
two Officers of the Company directing the Trustee to
authenticate the Notes and certifying that all conditions
precedent to the issuance of the Notes contained herein have
been complied with. The aggregate principal amount of Notes
outstanding at any time may not exceed $120,000,000, except as
provided in Section 2.07.
With the approval of the Company, the Trustee may
appoint an authenticating agent acceptable to the Company to
authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall
have the same rights as the Trustee in any dealings hereunder
with the Company or with any of the Company's Affiliates.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where
Notes may be presented for registration of transfer or for
exchange (the "Registrar"), an office or agency where Notes may
be presented for payment (the "Paying Agent") and an office or
agency where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The
Registrar shall keep a register of the Notes 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" includes any additional paying agent. Except as
otherwise expressly provided in this Indenture, the Company or
any Affiliate thereof may act as Paying Agent.
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 TIA. 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, Paying Agent or agent for service of
notices and demands, or fails to give the foregoing notice, the
Trustee shall act as such and shall be entitled to appropriate
compensation in accordance with Section 7.08.
The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of notices and
demands in connection with the Notes.
Section 2.04. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent
for the payment of principal of, or interest on, the Notes
(whether such money has been distributed to it by the Company
or any other obligor on the Notes), and the Company and the
Paying Agent shall notify the Trustee of any default by the
Company (or any other obligor on the Notes) in making any such
payment. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to
distribute 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 Payment Default with respect to the Notes,
upon written request to a Paying Agent, require such Paying
Agent to pay all money held by it to the Trustee and to account
for any funds distributed. Upon doing so, the Paying Agent
(other than an obligor under the Notes or any Guarantees) shall
have no further liability for the money so paid over to the
Trustee.
Section 2.05. Noteholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Holders and shall otherwise comply
with TIA Section 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least ten Business
Days before each Interest Payment Date and at such other times as
the Trustee may request in writing a list in such form and as
of such date as the Trustee may reasonably require of the names
and addresses of Holders, which list may be conclusively relied
upon by the Trustee.
Section 2.06. Transfer and Exchange.
When Notes are presented to the Registrar or a co-
Registrar with a request to register the transfer of such Notes
or to exchange such Notes for an equal principal amount of
Notes of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided that the
Notes surrendered for transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar, duly
executed by the Holder thereof or his attorney duly authorized
in writing. To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's request. No service
charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Sections 2.02, 2.07, 2.10,
3.06, 4.12, 4.13 or 9.05). The Registrar shall not be required
to register the transfer of or exchange of any Note (i) during
a period beginning at the opening of business 15 days before
the mailing of a notice of redemption of Notes and ending at
the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to
Article Three, except the unredeemed portion of any Note being
redeemed in part.
Section 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or
if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the
Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and
the Trustee, to protect the Company, the Trustee or any Agent
from any loss which any of them may suffer if a Note is
replaced. The Company may charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Note,
including reasonable fees and expenses of counsel. Every
replacement Note is an additional obligation of the Company.
Section 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that
have been authenticated by the Trustee except those cancelled
by it, those delivered to it for cancellation and those
described in this Section as not outstanding. A Note does not
cease to be outstanding because the Company or any of their
respective Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other
than a mutilated Note surrendered for replacement), it ceases
to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona
fide purchaser. A mutilated Note ceases to be outstanding upon
surrender of such Note and replacement thereof pursuant to
Section 2.07.
If on a Redemption Date or a Maturity Date the Paying
Agent (other than the Company or an Affiliate of the Company)
holds cash or U.S. Government Obligations sufficient to pay all
of the principal and interest due on the Notes payable on that
date, and is not prohibited from paying such cash or U.S.
Government Obligations to the Holders of such Notes pursuant to
the terms of this Indenture, then on and after that date such
Notes cease to be outstanding and interest on them shall cease
to accrue.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required
principal amount of Notes have concurred in any direction,
waiver or consent, Notes owned by the Company or any of their
respective Affiliates shall be disregarded, except that, for
the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows or has reason to know are so
owned shall be disregarded.
Section 2.10. Temporary Notes.
Until definitive Notes are prepared and ready for
delivery, the Company may prepare and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have
variations that the Company considers appropriate for temporary
Notes. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange
for temporary Notes. Until such exchange, temporary Notes
shall be entitled to the same rights, benefits and privileges
as definitive Notes.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no
one else, shall cancel and, at the written direction of the
Company, shall dispose of all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07,
the Company may not issue new Notes to replace Notes that it
has paid or delivered to the Trustee for cancellation. If the
Company shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
Section 2.12. Defaulted Interest.
If the Company defaults on a payment of interest on
the Notes, it shall pay the defaulted interest, plus (to the
extent permitted by law) any interest payable on the defaulted
interest, in accordance with the terms hereof, to the persons
who are Noteholders on a subsequent special record date, which
date shall be at least five Business Days prior to the payment
date. The Company shall fix such special record date and
payment date in a manner satisfactory to the Trustee. At least
15 days before such special record date, the Company shall mail
to each Noteholder a notice that states the special record
date, the payment date and the amount of defaulted interest,
and interest payable on such defaulted interest, if any, to be
paid.
Section 2.13. CUSIP Number.
The Company in issuing the Notes 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 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
Notes, and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company will
promptly notify the Trustee of any change in the CUSIP number.
Section 2.14. Deposit of Moneys.
On or before each Interest Payment Date and Maturity
Date, the Company shall deposit with the Trustee or Paying
Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date or
Maturity 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 or Maturity Date, as the case may
be; provided that the Company may make any such deposit in next
day funds on or before the Business Day before each Interest
Payment Date and Maturity Date.
ARTICLE THREE
REDEMPTION OF NOTES
Section 3.01. Notices to the Trustee.
If the Company elects to redeem Notes pursuant to
Paragraphs 4(a), (b) or (c) of the Notes, it shall notify the
Trustee of the Redemption Date and principal amount of Notes to
be redeemed.
The Company shall notify the Trustee by an Officers'
Certificate, stating that such redemption will comply with the
provisions hereof and of the Notes, of any redemption at least
45 days before the Redemption Date.
Section 3.02. Selection of Notes To Be
Redeemed.
In the event that less than all of the Notes are to
be redeemed at any time, selection of such Notes for redemption
will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not then listed on a
national securities exchange (or if the Notes are so listed but
the exchange does not impose requirements with respect to the
selection of debt securities for redemption), on a pro rata
basis, by lot or by such method as the Trustee shall deem fair
and appropriate; provided that no Notes of a principal amount
of $1,000 or less shall be redeemed in part; provided, further,
that any such redemption pursuant to the provisions relating to
a Public Equity Offering shall be made on a pro rata basis or
on as nearly a pro rata basis as practicable (subject to the
procedures of any applicable Depository).
The Trustee shall promptly notify the Company and the
Registrar in writing of the Notes selected for redemption and,
in the case of any Notes selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to
redemption of Notes shall relate, in the case of any Note
redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be
redeemed.
Section 3.03. Notice of Redemption.
Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date to each Holder of Notes to be
redeemed, at the address of such Holder appearing in the Note
register maintained by the Registrar.
All notices of redemption shall identify the Notes to
be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(c) that, unless the Company defaults in making the
redemption payment, interest on Notes called for
redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such
Notes is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Notes redeemed;
(d) if any Note is to be redeemed in part only, the
portion of the principal amount (equal to $1,000 or any
integral multiple thereof) of such Note to be redeemed and
that on and after the Redemption Date, upon surrender for
cancellation of such Note to the Paying Agent, a new Note
or Notes in the aggregate principal amount equal to the
unredeemed portion thereof will be issued without charge
to the Noteholder;
(e) that Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price and the name and address of the Paying Agent;
(f) the CUSIP number, if any, relating to such
Notes; and
(g) the paragraph of the Notes pursuant to which the
Notes are being redeemed.
Notice of redemption of Notes to be redeemed at the
election of the Company shall be given by the Company or, at
the Company's written request, by the Trustee in the name and
at the expense of the Company.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Notes called for
redemption become due and payable on the Redemption Date and at
the Redemption Price. Upon surrender to the Paying Agent, such
Notes called for redemption shall be paid at the Redemption
Price plus accrued interest to the Redemption Date, but
interest installments whose maturity is on or prior to such
Redemption Date will be payable on the relevant Interest
Payment Dates to the Holders of record at the close of business
on the relevant record dates referred to in the Notes.
Section 3.05. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall
deposit with the Paying Agent an amount of money in same day
funds sufficient to pay the Redemption Price of, and
accrued interest on, all the Notes or portions thereof which
are to be redeemed on that date, other than Notes or portions
thereof called for redemption on that date which have been
delivered by the Company to the Trustee for cancellation.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such
Redemption Price, interest on the Notes to be redeemed will
cease to accrue on and after the applicable Redemption Date,
whether or not such Notes are presented for payment. If any
Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and, to the extent
lawful, accrued interest thereon shall, until paid, bear
interest from the Redemption Date at the rate provided in the
Notes.
Section 3.06. Notes Redeemed or Purchased in
Part.
Upon surrender to the Paying Agent of a Note which is
to be redeemed in part, the Company shall execute, each
Guarantor shall guarantee and the Trustee shall authenticate
and deliver to the Holder of such Note without service charge,
a new Note or Notes (accompanied by a notation of Guarantee,
duly endorsed by each Guarantor), 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 Note so surrendered that is not redeemed.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes.
The Company will pay, or cause to be paid, the
principal of and interest on the Notes on the dates and in the
manner provided in the Notes and this Indenture. An
installment of principal or interest shall be considered paid
on the date due if the Trustee or Paying Agent (other than the
Company, a Subsidiary of the Company or any Affiliate of any
thereof) holds on that date money designated for and sufficient
to pay the installment and is not prohibited from paying such
money to the Holders of the Notes pursuant to the terms of this
Indenture.
The Company will pay interest on overdue principal at
the rate and in the manner provided in the Notes; it shall pay
interest on overdue installments of interest at the same rate
and in the same manner, to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where
Notes and the Guarantees may be surrendered for registration of
transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company or any Guarantor in
respect of the Notes, the Guarantees and this Indenture may be
served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of
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 address of the Trustee as set forth in
Section 12.02.
The Company may also from time to time designate one
or more other offices or agencies where the Notes and the
Guarantees may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations;
provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New
York, for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or
agency.
The Company hereby initially designates the office of
the Trustee maintained at 55 Water Street, First Floor,
Jeanette Park Entrance, New York, New York 10041, as such
office of the Company in accordance with this Section 4.02.
Section 4.03. Corporate Existence.
Subject to Article Five, each of the Company and each
Guarantor shall do or cause to be done all things necessary to
and will cause each of its Subsidiaries to, preserve and keep
in full force and effect the corporate, partnership or limited
liability company existence and rights (charter and statutory),
licenses and/or franchises of such person and each of its
Subsidiaries; provided that any such person or any of its
Subsidiaries shall not be required to preserve any such
existence (in the case of Subsidiaries), rights, licenses or
franchises if (x) the Board of Directors of the Company shall
reasonably determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company, the
Guarantors and their respective Subsidiaries taken as a whole
or (y) the loss thereof is not materially adverse to either the
Company, the Guarantors and their respective Subsidiaries taken
as a whole or to the ability of each of the Company and each
Guarantor to otherwise satisfy its obligations hereunder.
Section 4.04. Payment of Taxes and Other Claims.
The Company and each Guarantor will pay or discharge
or cause to be paid or discharged, before any penalty accrues
from the failure to so pay or discharge, (a) all material
taxes, assessments and governmental charges levied or imposed
upon such person or any of its Subsidiaries or upon the income,
profits or property of such person or any of its Subsidiaries,
and (b) all material lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien upon the
property of such person or any Subsidiary of such person;
provided that neither the Company nor any Guarantor shall be
required to pay or discharge or cause to be paid or discharged
any such tax, assessment, charge or claim the amount,
applicability or validity of which is being contested in good
faith by appropriate proceedings and for which adequate
provision has been made or where the failure to effect such
payment or discharge is not adverse in any material respect to
the Holders.
Section 4.05. Maintenance of Properties; Insurance;
Books and Records; Compliance with
Law.
(a) The Company and each Guarantor shall, and shall
cause each of their respective Subsidiaries to, cause all
properties and assets to be maintained and kept in good
condition, repair and working order (reasonable wear and tear
excepted) and supplied with all necessary equipment, and shall
cause to be made all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto, as shall be
reasonably necessary for the proper conduct of its business;
provided that nothing in this Section 4.05(a) shall prevent the
Company, any Guarantor or any of their respective Subsidiaries
from discontinuing the operation and maintenance of any of its
properties (x) if such discontinuance is, in the judgment of
the Board of Directors or the board of directors of such
Guarantor or Subsidiary, desirable in the conduct of its
business or (y) if such discontinuance or disposal is not
materially adverse to either the Company, the Guarantors and
their respective Subsidiaries taken as a whole or the ability
of the Company and each Guarantor to otherwise satisfy its
obligations hereunder.
(b) The Company shall, and shall cause each of its
Subsidiaries to, maintain such insurance as may be required by
law (other than with respect to any environmental impairment
liability insurance not commercially available) and such other
insurance to such extent and against such hazards and
liabilities, as is customarily maintained by companies
similarly situated (which may include self-insurance in the
same form as is customarily maintained by companies similarly
situated).
(c) The Company and each Guarantor shall, and shall
cause each of their respective Subsidiaries to, keep proper
books of record and account, in which full and correct entries
shall be made of all business and financial transactions of
such person and each Subsidiary of such person and reflect on
its financial statements adequate accruals and appropriations
to reserves, all in accordance with generally accepted
accounting principles, as in effect from time to time,
consistently applied to such person and its Subsidiaries taken
as a whole.
(d) The Company shall and shall cause each of its
respective Subsidiaries to comply with all statutes, laws,
ordinances, or government rules and regulations to which it is
subject, non-compliance with which would materially adversely
affect the business, earnings, properties, assets or condition
(financial or otherwise) of the Company and its Subsidiaries
taken as a whole.
Section 4.06. Compliance Certificate.
(a) The Company will deliver to the Trustee within
45 days after the end of each of the first three quarters of
the Company's fiscal year and within 90 days after the end of
such fiscal year an Officers' Certificate stating whether or
not the signers know of any Default or Event of Default under
this Indenture by the Company or any of the Guarantors that
occurred during such fiscal period. If they do know of such a
Default or Event of Default, the certificate shall describe any
such Default or Event of Default and its status. The first
certificate to be delivered pursuant to this Section 4.06(a)
shall be for the first fiscal quarter of the Company beginning
after the Issue Date. The Company shall also deliver a
certificate to the Trustee at least annually from its principal
executive, financial or accounting officer as to his or her
knowledge of the Company's and each Guarantor's compliance with
all conditions and covenants under this Indenture, such
compliance to be determined without regard to any period of
grace or requirement of notice provided herein.
(b) the Company shall deliver to the Trustee within
90 days after the end of each fiscal year a written statement
by the Company's independent certified public accountants
stating (A) that their audit examination has included a review
of the terms of this Indenture, the Notes and the Guarantees as
they relate to accounting matters, and (B) whether, in
connection with their audit examination, any Default or Event
of Default under this Indenture has come to their attention
and, if such a Default or Event of Default has come to their
attention, specifying the nature and period of existence
thereof; provided that, without any restriction as to the scope
of the audit examination, such independent certified public
accountants shall not be liable by reason of any failure to
obtain knowledge of any such Default or Event of Default that
would not be disclosed in the course of an audit examination
conducted in accordance with generally accepted accounting
principles, as in effect from time to time.
(c) The Company will deliver to the Trustee as soon
as possible, and in any event within 10 days after the Company
becomes aware or should reasonably have become aware of the
occurrence of any Default or Event of Default, an Officers'
Certificate specifying such Default or Event of Default and
what action the Company or the applicable Guarantor, as the
case may be, is taking or proposes to take with respect
thereto.
Section 4.07. Reporting Requirements.
The Company and each of the Guarantors shall file
with the SEC the annual reports, quarterly reports and other
documents required to be filed with the SEC pursuant to
Sections 13 and 15(d) of the Securities Exchange Act, to the
extent such filings are accepted by the SEC and whether or not
the Company or any such Guarantor has a class of securities
registered under the Securities Exchange Act. In accordance
with the provisions of TIA Section 314(a), the Company and each
Guarantor shall file with the Trustee, within 15 days after it
files them with the SEC, copies of such reports and documents.
The Company and each Guarantor also shall comply with the other
provisions of TIA Section 314(a). In addition, the Company shall
cause its and each Guarantor's, if applicable, annual report to
stockholders and any quarterly or other financial reports
furnished to stockholders generally to be filed with the
Trustee and mailed, no later than the date such materials are
mailed or made available to stockholders, to the Holders at
their addresses as set forth in the register of Notes
maintained by the Registrar.
Section 4.08. Limitation on Indebtedness.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create,
incur, issue, assume, guarantee or in any other manner become
liable, contingently or otherwise (in each case, to "incur"),
for the payment of any Indebtedness (including any Acquired
Indebtedness); provided that (i) the Company or any Guarantor
will be permitted to incur Indebtedness (including Acquired
Indebtedness) and (ii) a Restricted Subsidiary will be
permitted to incur Acquired Indebtedness if, immediately after
giving pro forma effect thereto, the Consolidated Fixed Charge
Coverage Ratio of the Company would be equal to or greater than
(a) 2.00:1.0 if such Indebtedness is incurred on or prior to
December 31, 1998 and (b) 2.25:1.0 if such Indebtedness is
incurred after December 31, 1998.
Notwithstanding the foregoing, the Company and, to
the extent specifically set forth below, the Restricted
Subsidiaries may incur each and all of the following:
(1) Indebtedness of the Company or any Guarantor
under the Credit Agreement in an aggregate principal
amount at any time outstanding not to exceed $320,000,000;
provided that (a) term and revolving acquisition loans
under the Credit Agreement shall not exceed $245,000,000
in aggregate principal amount at any time outstanding,
less the sum of, without duplication, (i) the amount of
any scheduled amortization payments and mandatory
prepayments of principal amount of such loans, whether or
not actually made (other than, in the case of this
clause (i), repayments of the net cash proceeds of the
issuance and sale of Capital Stock (other than Redeemable
Capital Stock) to the extent commitments in respect of
such loans are not reduced thereby), and (ii) the amount
of any other repayments of such loans actually made; and
(b) revolving credit loans and the undrawn portion of
unpaid reimbursement obligations in respect of letters of
credit under the Credit Agreement shall not exceed the sum
of 60% of the book value of inventory and 90% of the book
value of accounts receivable of the Company and the
Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP as of the date of the
determination of such borrowing base under the Credit
Agreement for the particular incurrence of Indebtedness;
(2) Indebtedness of the Company or any Guarantor
evidenced by the Notes or any Guarantee;
(3) (a) Interest Rate Protection Obligations of the
Company or any guarantee thereof by a Restricted
Subsidiary covering Indebtedness of the Company or any
Restricted Subsidiary of the Company and (b) Interest Rate
Protection Obligations of any Restricted Subsidiary of the
Company covering Indebtedness of such Restricted
Subsidiary; provided that, in the case of either clause
(a) or (b), the aggregate notional principal amount of any
such Interest Rate Protection Obligations does not exceed
the principal amount of the Indebtedness to which such
Interest Rate Protection Obligations relate;
(4) Indebtedness of the Company owed to a Restricted
Subsidiary and Indebtedness of a Restricted Subsidiary
owed to the Company or a Restricted Subsidiary; provided
that (a) any subsequent issuance or transfer of Capital
Stock or any Designation that results in such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer or assignment of such Indebtedness
(other than to the Company or a Restricted Subsidiary)
will be deemed to constitute the incurrence of such
Indebtedness by the Company or such Restricted Subsidiary,
as the case may be, and (b) any such Indebtedness of the
Company owed to a Restricted Subsidiary that is not a
Guarantor and any such Indebtedness of a Restricted
Subsidiary that is a Guarantor owed to a Restricted
Subsidiary that is not a Guarantor must be subordinated in
right of payment to the prior payment in full and
performance of the Company's or the Guarantor's
obligations under this Indenture, the Notes and the
Guarantees, as the case may be;
(5) Indebtedness of the Company or any Restricted
Subsidiary incurred in respect of performance bonds,
surety bonds and bankers' acceptances provided in the
ordinary course of business;
(6) Indebtedness of the Company or any Restricted
Subsidiary in respect of the undrawn portion of the face
amount of or unpaid reimbursement obligations in respect
of letters of credit issued in the ordinary course of
business for the account of the Company or any of the
Restricted Subsidiaries in an amount outstanding at any
time not to exceed the difference between (a) $10,000,000
and (b) the amount of Indebtedness in respect of the
undrawn portion or unpaid reimbursement obligations in
respect of letters of credit outstanding under
subclause (b) of the proviso to clause (1) above;
(7) (a) Indebtedness in respect of Purchase Money
Obligations for property acquired in the ordinary course
of business (and not, in any event, in connection with an
Asset Acquisition or a Capitalized Lease Obligation) and
(b) Indebtedness of the Company or any Restricted
Subsidiary representing any Capitalized Lease Obligations
if, in the case of this clause (b) only after giving pro
forma effect to such incurrence of Indebtedness, (i) the
aggregate principal amount of Capitalized Lease
Obligations incurred in any fiscal year pursuant to this
clause (7) would not exceed $15,000,000 and (ii) the
aggregate principal amount of Capitalized Lease
Obligations pursuant to this clause (7) after the Issue
Date would not exceed $45,000,000 in the aggregate;
(8) Indebtedness of the Company or any Restricted
Subsidiary arising from the honoring by a bank or other
financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the
ordinary course of business; provided that such
Indebtedness is extinguished within 30 days of incurrence;
(9) (a) Indebtedness of the Company or any Guarantor
to the extent the proceeds thereof are used to refinance
(whether by amendment, renewal, extension or refunding)
Indebtedness of the Company or any Guarantor (including
all or a portion of the Notes) or any Restricted
Subsidiary and (b) Indebtedness of any Restricted
Subsidiary that is not a Guarantor to the extent the
proceeds thereof are used to refinance (whether by
amendment, renewal, extension or refunding) Indebtedness
of any Restricted Subsidiary that is not a Guarantor, in
each case other than the Indebtedness to be refinanced,
redeemed or retired as described under "Use of Proceeds"
herein and Indebtedness incurred under clauses (1), (3),
(4), (5), (7)(b) or (8) of this Section 4.08; provided
that the principal amount of Indebtedness incurred
pursuant to this clause (9) (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
refinancing pursuant to the terms of such Indebtedness or
the amount of any premium reasonably determined by the
Company or a Restricted Subsidiary, as applicable, as
necessary to accomplish such refinancing by means of a
tender offer or privately negotiated purchase, plus the
amount of expenses in connection therewith; and
(10) Additional Indebtedness of the Company or any
Restricted Subsidiary (including, without limitation,
Indebtedness under the Credit Agreement in excess of the
amounts permitted under clause (1) above) not to exceed
$20,000,000 in aggregate principal amount at any time
outstanding.
Section 4.09. Limitation on Restricted Payments.
The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other
distribution or payment on or in respect of Capital Stock
of the Company or any payment made to the direct or
indirect holders (in their capacities as such) of Capital
Stock of the Company (other than dividends or
distributions payable solely in rights to purchase Capital
Stock of the Company (other than Redeemable Capital
Stock));
(ii) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock of the Company (other
than any such Capital Stock owned by a Restricted
Subsidiary);
(iii) make any principal payment on, or purchase,
defease, repurchase, redeem or otherwise acquire or retire
for value, prior to any scheduled maturity, scheduled
repayment, scheduled sinking fund payment or other Stated
Maturity, any Subordinated Indebtedness (other than any
such Subordinated Indebtedness owed to a Restricted
Subsidiary); or
(iv) make any Investment (other than any Permitted
Investment) in any person
(such payments or Investments described in the preceding
clauses (i), (ii), (iii) and (iv) are collectively referred to
as "Restricted Payments"), unless, at the time of and after
giving effect to the proposed Restricted Payment (the amount of
any such Restricted Payment, if other than in cash, shall be
the Fair Market Value of the asset(s) proposed to be
transferred by the Company or such Restricted Subsidiary, as
the case may be, pursuant to such Restricted Payment), (A) no
Default shall have occurred and be continuing, (B) the
aggregate amount of all Restricted Payments declared or made
from and after the Issue Date would not exceed the sum of (1)
50% of the aggregate Consolidated Net Income of the Company
accrued on a cumulative basis during the period (treated as one
accounting period) beginning on April 1, 1996 and ending on the
last day of the fiscal quarter of the Company immediately
preceding the date of such proposed Restricted Payment (or, if
such aggregate cumulative Consolidated Net Income of the
Company for such period shall be a deficit, minus 100% of such
deficit) plus (2) the aggregate net cash proceeds received by
the Company either (x) as capital contributions in the form of
common equity to the Company after the Issue Date or (y) from
the issuance or sale of Capital Stock (excluding Redeemable
Capital Stock but including Capital Stock issued upon the
conversion of convertible Indebtedness, in exchange for
outstanding Indebtedness or from the exercise of options,
warrants or rights to purchase Capital Stock (other than
Redeemable Capital Stock)) of the Company to any person (other
than to a Subsidiary of the Company) after the Issue Date plus
(3) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment made after the
Issue Date (excluding any Investment made pursuant to clause
(iv) of the following paragraph), an amount equal to the lesser
of the return of capital with respect to such Investment and
the initial amount of such Investment, in either case, less the
cost of the disposition of such Investment and (C) the Company
could incur $1.00 of additional Indebtedness under the first
paragraph of Section 4.08. For purposes of the preceding
clause (B)(2), upon the issuance of Capital Stock either from
the conversion of convertible Indebtedness or in exchange for
outstanding Indebtedness or upon the exercise of options,
warrants or rights, the amount counted as net cash proceeds
received will be the cash amount received by the Company at the
original issuance of the Indebtedness that is so converted or
exchanged or from the issuance of options, warrants or rights,
as the case may be, plus the incremental amount of cash
received by the Company, if any, upon the conversion, exchange
or exercise thereof.
None of the foregoing provisions will prohibit
(i) the payment of any dividend within 60 days after the date
of its declaration, if at the date of declaration such payment
would be permitted by the foregoing paragraph; (ii) the
redemption, repurchase or other acquisition or retirement of
any shares of any class of Capital Stock of the Company or any
Restricted Subsidiary in exchange for, or out of the net cash
proceeds of, a substantially concurrent issue and sale of other
shares of Capital Stock (other than Redeemable Capital Stock)
of the Company to any person (other than to a Subsidiary of the
Company); provided that such net cash proceeds are excluded
from clause (B)(2)(y) of the preceding paragraph; (iii) so long
as no Default shall have occurred and be continuing, any
redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness by exchange for, or out of the net
cash proceeds of, a substantially concurrent issue and sale of
(1) Capital Stock (other than Redeemable Capital Stock) of the
Company; provided that any such net cash proceeds are excluded
from clause (B)(2)(y) of the preceding paragraph; or
(2) Indebtedness of the Company so long as such Indebtedness
(x) is subordinated to the Notes in the same manner and at
least to the same extent as the Subordinated Indebtedness being
redeemed, repurchased, acquired or retired and (y) has no
Stated Maturity earlier than the 91st day after the Stated
Maturity for the final scheduled principal payment of the
Notes; (iv) so long as no Default shall have occurred and be
continuing, the making of Investments constituting Restricted
Payments (valued at their initial amount) not to exceed
$20,000,000 at any time outstanding; (v) the repurchase of the
Bank Warrants in accordance with their terms as in effect on
the Issue Date; (vi) Investments constituting Restricted
Payments made as a result of the receipt of non-cash
consideration from any Asset Sale made pursuant to and in
compliance with the Section 4.13; or (vii) so long as no
Default shall have occurred and be continuing, the purchase of
"odd lot" shares of Common Stock of the Company in an amount
not to exceed $500,000 in the aggregate. In computing the
amount of Restricted Payments previously made for purposes of
clause (B) of the preceding paragraph, Restricted Payments made
under the immediately preceding clauses (i), (iv), (v), (vi)
and (vii) shall be included.
Section 4.10. Limitation on Issuance and Sale
of Preferred Stock by Restricted
Subsidiaries.
The Company (i) will not permit any of the Restricted
Subsidiaries to issue any Preferred Stock (other than to the
Company or a Wholly-Owned Restricted Subsidiary) and (ii) will
not permit any person (other than the Company or a Wholly-Owned
Restricted Subsidiary) to own any Preferred Stock of any
Restricted Subsidiary.
Section 4.11. Limitation on Liens.
The Company will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or suffer to
exist any Liens of any kind against or upon any of its property
or assets, or any proceeds therefrom, which secure either
(i) Subordinated Indebtedness unless the Notes and the
Guarantees, as applicable, are secured by a Lien on such
property, assets or proceeds that is senior in priority to the
Liens securing such Subordinated Indebtedness or (ii) Pari
Passu Indebtedness unless the Notes and the Guarantees, as
applicable, are equally and ratably secured with the Liens
securing such Pari Passu Indebtedness.
Section 4.12. Change of Control.
Upon the occurrence of a Change of Control, the
Company shall be obligated to make an offer to purchase (a
"Change of Control Offer") and shall, subject to the provisions
described below, purchase, on a business day (the "Change of
Control Purchase Date") not more than 60 nor less than 30 days
following the occurrence of the Change of Control, all of the
then outstanding Notes at a purchase price (the "Change of
Control Purchase Price") equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the Change
of Control Purchase Date. The Company shall, subject to the
provisions described below, be required to purchase all Notes
properly tendered into the Change of Control Offer and not
withdrawn. Prior to the mailing of the notice to Holders
provided for below, the Company shall have (x) terminated all
commitments and repaid in full all Indebtedness under the
Credit Agreement, or offered to terminate such commitments and
repay in full such Indebtedness and have in fact terminated the
commitments of and repaid all Indebtedness of any lender under
the Credit Agreement Obligations who accepts such offer, or
(y) obtained the requisite consents under the Credit Agreement
Obligations to permit the purchase of the Notes as provided for
under this Section 4.12. If a notice has been mailed when such
condition precedent has not been satisfied, the Company shall
have no obligation to (and shall not) effect the purchase of
Notes until such time as such condition precedent is satisfied.
Failure to mail the notice on the date specified below or to
have satisfied the foregoing condition precedent by the date
that the notice is required to be mailed shall in any event
constitute a Default under Section 6.1(c).
Notice of a Change of Control Offer shall be mailed
by the Company not later than the 30th day after the Change of
Control Date to the Holders of Notes at their last registered
addresses with a copy to the Trustee and the Paying Agent. The
Change of Control Offer shall remain open from the time of
mailing for at least 20 Business Days and until 5:00 p.m., New
York City time, on the Change of Control Purchase 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 4.12 and that all Notes validly
tendered into the Change of Control Offer and not
withdrawn will be accepted for payment;
(b) the purchase price (including the amount of
accrued interest, if any) for each Note, the Change of
Control Purchase Date and the date on which the Change of
Control Offer expires;
(c) that any Note 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 Note 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 Notes purchased
pursuant to a Change of Control Offer will be required to
surrender their Notes 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 Notes 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 tested telex, facsimile
transmission or letter setting forth the name of the
Holder, the principal amount of Notes the Holder delivered
for purchase, the Note certificate number (if any) and a
statement that such Holder is withdrawing its election to
have such Notes purchased;
(g) that Holders whose Notes are purchased only in
part will be issued Notes equal in principal amount to the
unpurchased portion of the Notes surrendered;
(h) the instructions that Holders must follow in
order to tender their Notes; and
(i) information concerning the business of the
Company, the most recent annual and quarterly reports of
the Company filed with the SEC pursuant to the Securities
Exchange Act (or,if the Company is not then required to
file any such reports with the SEC, the comparable reports
prepared pursuant to Section 4.07), 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 be material to a Holder
of Notes in connection with the decision of such Holder as
to whether or not it should tender Notes pursuant to the
Change of Control Offer, including information regarding
the persons acquiring control and such persons' business
plans going forward.
On the Change of Control Purchase Date, the Company
shall (i) accept for payment Notes or portions thereof validly
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 Notes or portions
thereof so tendered and accepted and (iii) deliver to the
Trustee the Notes so accepted together with an Officers'
Certificate setting forth the Notes or portions thereof
tendered to and accepted for payment by the Company. The
Paying Agent shall promptly mail or deliver to the Holders of
Notes 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 Note equal in principal amount to
any unpurchased portion of the Note surrendered. Any Notes not
so accepted shall be promptly mailed or delivered by the
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.
The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements applicable to a
Change of Control Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of
Control Offer.
The Company will comply with Section 14(e) and Rule
14e-1 under the Securities Exchange Act and any other
securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer.
Section 4.13. Disposition of Proceeds of Asset
Sales.
(a) The Company will not, and will not permit any of
the Restricted Subsidiaries to, make any Asset Sale unless
(i) the Company or such Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at
least equal to the fair market value, as determined in good
faith by the Board of Directors of the Company, of the shares
or assets sold or otherwise disposed of and (ii) at least 75%
of such consideration consists of cash and/or Cash Equivalents
and/or readily marketable securities which the Company in good
faith expects to liquidate promptly following such Asset Sale
(with Indebtedness of the Company or any Restricted Subsidiary
being counted as cash for such purposes if the Company or the
Restricted Subsidiary is unconditionally released from any
liability therefor). Net Cash Proceeds of any Asset Sale may
be applied, to the extent required by the terms of any
Specified Indebtedness, to repay Specified Indebtedness (but
only if the commitments or amounts available to be borrowed
under such Specified Indebtedness are permanently reduced by
the amount of such payment). To the extent that such Net Cash
Proceeds are not applied as provided in the preceding sentence,
the Company or a Restricted Subsidiary, as the case may be, may
apply the Net Cash Proceeds from such Asset Sale, within 360
days of such Asset Sale, to an investment in properties and
assets that were the subject of such Asset Sale or in
properties and assets that will be used in the business of the
Company and the Restricted Subsidiaries existing on the Issue
Date or in businesses reasonably related thereto ("Replacement
Assets") so long as the Company or such Restricted Subsidiary
has notified the Trustee in writing within 270 days of such
Asset Sale, that it has determined to apply the Net Cash
Proceeds from such Asset Sale to an investment in such
Replacement Assets. Any Net Cash Proceeds from any Asset Sale
not applied as provided in the preceding two sentences, within
360 days of such Asset Sale, constitute "Excess Proceeds"
subject to disposition as provided below.
(b) When the aggregate amount of Excess Proceeds
exceeds $10,000,000, the Company shall make an offer (an "Asset
Sale Offer") to purchase from all Holders, on a day not more
than 40 Business Days thereafter (the "Asset Sale Purchase
Date"), the maximum principal amount (expressed as a multiple
of $1,000) of Notes that may be purchased with the aggregate
Excess Proceeds at a price, payable in cash, equal to 100% of
the principal amount of the Notes plus accrued and unpaid
interest, if any, to the Asset Sale Purchase Date (the "Asset
Sale Offer Price").
(c) Notice of an Asset Sale Offer shall be mailed by
the Company to all Holders of Notes not less than 20 Business
Days nor more than 40 Business Days before the Asset Sale
Purchase Date at their last registered address with a copy to
the Trustee and the Paying Agent. The Asset Sale Offer shall
remain open from the time of mailing for at least 20 Business
Days and until at least 5:00 p.m., New York City time, on the
Asset Sale Purchase Date. The notice, which shall govern the
terms of the Asset Sale Offer, shall include such disclosures
as are required by law and shall state:
(1) that the Asset Sale Offer is being made pursuant
to this Section 4.13;
(2) the Asset Sale Offer Price (including the amount
of accrued interest, if any) for each Note, the Asset Sale
Purchase Date and the date on which the Asset Sale Offer
expires;
(3) that any Note not tendered or accepted for
payment will continue to accrue interest in accordance
with the terms thereof;
(4) that, unless the Company shall default in the
payment of the Asset Sale Offer Price, any Note accepted
for payment pursuant to the Asset Sale Offer shall cease
to accrue interest after the Asset Sale Purchase Date;
(5) that Holders electing to have Notes purchased
pursuant to an Asset Sale Offer will be required to
surrender their Notes to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City
time, on the Asset Sale Purchase Date and must complete
any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(6) that Holders 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 Asset Sale Purchase Date,
a tested telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of
Notes the Holder delivered for purchase, the Note
certificate number (if any) and a statement that such
Holder is withdrawing its election to have such Notes
purchased;
(7) that if Notes in a principal amount in excess of
the Holder's pro rata share of the amount of Excess
Proceeds are tendered pursuant to the Asset Sale Offer,
the Company shall purchase Notes on a pro rata basis among
the Notes tendered (with such adjustments as may be deemed
appropriate by the Company so that only Notes in
denominations of $1,000 or integral multiples of $1,000
shall be acquired);
(8) that Holders whose Notes are purchased only in
part will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered;
(9) the instructions that Holders must follow in
order to tender their Notes; and
(10) information concerning the business of the
Company, the most recent annual and quarterly reports of
the Company filed with the SEC pursuant to the Securities
Exchange Act (or, if the Company is not required to file
any such reports with the Commission, the comparable
reports prepared pursuant to Section 4.07), a description
of material developments in the Company's business,
information with respect to pro forma historical financial
information after giving effect to such Asset Sale and
Asset Sale Offer and in connection with the decision of
such Holder as to whether or not it should tender Notes
pursuant to the Asset Sale Offer.
(d) On the Asset Sale Purchase Date, the Company
shall (i) accept for payment, on a pro rata basis, Notes or
portions thereof tendered pursuant to the Asset Sale Offer,
(ii) deposit with the Paying Agent money, in immediately
available funds, in an amount sufficient to pay the Asset Sale
Offer Price of all Notes or portions thereof so tendered and
accepted and (iii) deliver to the Trustee the Notes so accepted
together with an Officers' Certificate setting forth the Notes
or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent shall promptly mail or deliver to
Holders of Notes so accepted payment in an amount equal to the
Asset Sale Offer Price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note
equal in principal amount to any unpurchased portion of the
Note surrendered. Any Notes not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Asset Sale
Offer not later than the first Business Day following the Asset
Sale Purchase Date. To the extent that the aggregate principal
amount of Notes tendered pursuant to an offer to purchase is
less than the Excess Proceeds, the Company may use such
deficiency for general corporate purposes. Upon completion of
such an offer to purchase, the amount of Excess Proceeds shall
be reset to zero. For purposes of this Section 4.13, the
Trustee shall act as Paying Agent.
(e) The Company shall comply, to the extent
applicable, with the requirements of Section 14(e) of the
Securities Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant
to the Asset Sale Offer.
Section 4.14. Limitation on Transactions
with Affiliates.
The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, enter into
or suffer to exist any transaction or series of related
transactions (including, without limitation, the sale,
transfer, disposition, purchase, exchange or lease of assets,
property or services) with, or for the benefit of, any
Affiliate of the Company (other than a Restricted Subsidiary of
the Company so long as no Affiliate or beneficial holder of 10%
or more of any class of Capital Stock of the Company shall
beneficially own any Capital Stock in such Restricted
Subsidiary) or any beneficial holder of 10% or more of any
class of Capital Stock of the Company, except (i) on terms that
are no less favorable to the Company, or the Restricted
Subsidiary, as the case may be, than those which could have
been obtained in a comparable transaction at such time from
persons who do not have such a relationship with the Company,
(ii) with respect to a transaction or series of transactions
involving aggregate payments or value equal to or greater than
$10,000,000, the Company has obtained a written opinion from a
nationally recognized investment banking firm stating that the
terms of such transactions or series of transactions are fair
to the Company or the Restricted Subsidiary, as the case may
be, from a financial point of view, and (iii) with respect to
any transaction or series of transactions involving aggregate
payments or value equal to or greater than $1,000,000, the
Company shall have delivered an officer's certificate to the
Trustee certifying that such transaction or series of
transactions comply with the preceding clause (i) and, if
applicable, certifying that the opinion referred to in the
preceding clause (ii) is correct and that such transaction or
series of transactions have been approved by a majority of the
Board of Directors of the Company, including a majority of the
disinterested directors of the Board of Directors of the
Company. This Section 4.14 will not restrict the Company from
(a) making dividends permitted by Section 4.09, (b) paying
reasonable and customary regular fees to directors of the
Company who are not employees of the Company and (c) making
loans or advances to officers of the Company and the Restricted
Subsidiaries for bona fide business purposes of the Company.
Section 4.15. Limitation on Dividends and Other
Payment Restrictions Affecting
Restricted Subsidiaries.
The Company will not, and will not permit any of the
Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any
encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (a) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of
its Capital Stock or any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness owed to the
Company or any other Restricted Subsidiary, (c) make loans or
advances to the Company or any other Restricted Subsidiary, (d)
transfer any of its properties or assets to the Company or any
other Restricted Subsidiary (other than any customary
restriction on transfers of property subject to a Lien
permitted hereunder (other than a Lien on cash not
constituting proceeds of non-cash property subject to a Lien
permitted hereunder) which would not materially adversely
affect the Company's ability to satisfy its obligations
hereunder), or (e) guarantee any Indebtedness of the Company or
any other Restricted Subsidiary, except for such encumbrances
or restrictions existing under or by reason of (i) applicable
law, (ii) customary non-assignment provisions of any contract
or any licensing agreement entered into by the Company or any
of the Restricted Subsidiaries in the ordinary course of
business or any lease governing a leasehold interest of the
Company or any Restricted Subsidiary, (iii) any agreement or
other instrument of a person acquired by the Company or any
Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any person, or
the properties or assets of any person, other than the person,
or the property or assets of the person, so acquired, (iv) any
encumbrance or restriction in the Credit Agreement as in effect
on the Issue Date and (v) any encumbrance or restriction
pursuant to any agreement that extends, refinances, renews or
replaces any agreement described in clause (iii) above, which
is not materially more restrictive or less favorable to the
Holders of Notes and Guarantees than those existing under the
agreement being extended, refinanced, renewed or replaced.
Section 4.16. Limitation on Other Senior
Subordinated Indebtedness.
Neither the Company nor any Guarantor will incur,
directly or indirectly, any Indebtedness which is subordinate
or junior in right of payment in any respect to Senior
Indebtedness or Guarantor Senior Indebtedness, as applicable,
unless such Indebtedness ranks pari passu in right of payment
with the Notes or the Guarantees, as applicable, or is
expressly subordinated in right of payment to the Notes or the
Guarantees, as applicable.
Section 4.17. Limitation on Designations of
Unrestricted Subsidiaries.
(a) The Company may designate any Subsidiary of the
Company (other than a Guarantor) as an "Unrestricted
Subsidiary" under this Indenture (a "Designation") only if
(i) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation; (ii) the
Company would be permitted under this Indenture to make an
Investment at the time of Designation (assuming the
effectiveness of such Designation) in an amount (the
"Designation Amount") equal to the Fair Market Value of the
Capital Stock of such Subsidiary on such date; and (iii) the
Company would be permitted under this Indenture to incur $1.00
of additional Indebtedness pursuant to the first paragraph of
Section 4.08 at the time of Designation (assuming the
effectiveness of such Designation).
In the event of any such Designation, the Company
shall be deemed to have made an Investment constituting a
Restricted Payment pursuant to Section 4.09 for all purposes of
this Indenture in the Designation Amount. The Company shall
not and shall not permit any Restricted Subsidiary to, at any
time (x) provide credit support for, or a guarantee of, any
Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary or (z) be directly
or indirectly liable for any Indebtedness which provides that
the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity
upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Subsidiary (including any
right to take enforcement action against such Unrestricted
Subsidiary), except in the case of clause (x) or (y) to the
extent permitted under Section 4.09. No Unrestricted
Subsidiary shall at any time guarantee or otherwise provide
credit support for any obligation of the Company or any
Restricted Subsidiary.
(b) The Company may revoke any Designation of a
Subsidiary as an Unrestricted Subsidiary (a "Revocation") if
(i) no Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if
incurred at such time, have been permitted to be incurred for
all purposes of this Indenture.
All Designations and Revocations pursuant to this
Section 4.17 must be evidenced by Board Resolutions delivered
to the Trustee certifying compliance with the foregoing
provisions.
Section 4.18. Limitation on Guarantees
by Restricted Subsidiaries.
No Restricted Subsidiary that is not a Guarantor may
at any time guarantee any Debt Securities of the Company or any
Guarantor or issue any Debt Securities, unless, at the time of
such guarantee or issue either (A) such Debt Securities
constitute Acquired Indebtedness permitted to be incurred
pursuant to the first paragraph of Section 4.08 or Indebtedness
incurred by such Restricted Subsidiary pursuant to clause (10)
of the second paragraph of Section 4.08 or (B) such Restricted
Subsidiary becomes a Guarantor. The Company may, at any time,
cause a Restricted Subsidiary to become a Guarantor by
executing and delivering a supplemental indenture providing for
the guarantee of payment of the Notes by such Restricted
Subsidiary pursuant to Article Ten hereof. In connection with
the execution and delivery of such supplemental indenture, such
Restricted Subsidiary shall execute and deliver to the Trustee
a Guarantee substantially in the form of Exhibit B hereto.
Section 4.19. Waiver of Stay, Extension or Usury
Laws.
The Company and each of the Guarantors covenants (to
the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law
or any usury law or other law which would prohibit or forgive
the Company or any Guarantor, as the case may be, from paying
all or any portion of the principal of or interest on the Notes
as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may
lawfully do so) the Company and each of the Guarantors 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.
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc.
The Company will not, in any transaction or series of
related transactions, merge or consolidate with or into, or
sell, assign, convey, transfer, lease or otherwise dispose of
all or substantially all of its properties and assets as an
entirety to, any person or persons, and the Company will not
permit any of the Restricted Subsidiaries to enter into any
such transaction or series of related transactions if such
transaction or series of related transactions, in the aggregate
would result in a sale, assignment, conveyance, transfer, lease
or other disposition of all or substantially all of the
properties and assets of the Company or of the Company and the
Restricted Subsidiaries, taken as a whole, to any other person
or persons, unless at the time and after giving effect thereto
(i) either (A)(1) if the transaction or transactions is a
merger or consolidation involving the Company, the Company
shall be the surviving person of such merger or consolidation
or (2) if the transaction or transactions is a merger or
consolidation involving a Restricted Subsidiary, such
Restricted Subsidiary shall be the surviving person of such
merger or consolidation and such surviving person shall be a
Restricted Subsidiary, or (B)(1) the person formed by such
consolidation or into which the Company or such Restricted
Subsidiary is merged or to which the properties and assets of
the Company or such Restricted Subsidiary, as the case may be,
substantially as an entirety, are transferred (any such
surviving person or transferee person being the "Surviving
Entity") shall be a corporation organized and existing under
the laws of the United States of America, any State thereof or
the District of Columbia and (2)(x) in the case of a
transaction involving the Company, the Surviving Entity shall
expressly assume by a supplemental indenture executed and
delivered to the Trustee, in form satisfactory to the Trustee,
all the obligations of the Company under the Notes and this
Indenture, and in each case, this Indenture shall remain in
full force and effect, or (y) in the case of a transaction
involving a Restricted Subsidiary that is a Guarantor, the
Surviving Entity shall expressly assume by a supplemental
indenture executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of such
Restricted Subsidiary under its Guarantee and related
supplemental indenture, and in each case, such Guarantee and
supplemental indenture shall remain in full force and effect;
and (ii) immediately after giving effect to such transaction or
series of related transactions on a pro forma basis (including,
without limitation, 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 and the Company, or the Surviving
Entity, as the case may be, after giving effect to such
transaction or series of transactions on a pro forma basis,
could incur $1.00 of additional Indebtedness under the first
paragraph of Section 4.08.
In connection with any consolidation, merger,
transfer, lease or other disposition contemplated hereby, the
Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the
Trustee, an officers' certificate and an opinion of counsel,
each stating that such consolidation, merger, transfer, lease
or other disposition and the supplemental indenture in respect
hereof comply with the requirements under this Indenture.
In addition, each Guarantor, unless it is the other
party to the transaction or unless its Guarantee will be
released and discharged in accordance with its terms as a
result of the transaction, will be required to confirm, by
supplemental indenture, that its Guarantee will apply to the
obligations of the Company or the Surviving Entity under this
Indenture.
Section 5.02. Successor Substituted.
Upon consolidation or merger or any transfer of all
or substantially all of the assets of the Company in accordance
with Section 5.01 hereof, in which the Company or a Restricted
Subsidiary, as applicable, is not the continuing corporation,
the successor corporation formed by such a consolidation or
into which the Company or such Restricted Subsidiary, as the
case may be, 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 with the
same effect as if such successor corporation had been named as
the Company therein; provided that, solely for purposes of
computing cumulative Consolidated Net Income for purposes of
clause (B) of the first paragraph of Section 4.09, the
cumulative Consolidated Net Income of any persons other than
the Company and the Restricted Subsidiaries shall only be
included for periods subsequent to the effective time of such
merger, consolidation, combination or transfer of assets.
For all purposes of this Indenture and the Notes
(including the provision of this Section and Sections 4.08,
4.09 and 4.11), Subsidiaries of any Surviving Entity will, upon
such transaction or series of related transactions, become
Restricted Subsidiaries or Unrestricted Subsidiaries as
provided pursuant to Section 4.17 and all Indebtedness, and all
Liens on property or assets, of the Company and the Restricted
Subsidiaries immediately prior to such transaction or series of
related transactions will be deemed to have been incurred upon
such transaction or series of related transactions.
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default.
An "Event of Default" means any of the following
events:
(a) default in the payment of the principal when due
and payable on any of the Notes (at its Stated Maturity,
upon optional redemption, required purchase, or
otherwise); or
(b) default in the payment of an installment of
interest on any of the Notes when due and payable, for 30
days; or
(c) the failure of the Company to comply with its
obligations under Section 5.01; or
(d) the failure of the Company to perform or observe
any other term, covenant or agreement contained in the
Notes or this Indenture (other than a default specified in
clause (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 (i) to the
Company by the Trustee or (ii) to the Company and the
Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding; or
(e) any default or defaults under one or more
agreements, instruments, mortgages, bonds, debentures or
other evidences of Indebtedness (a "Debt Instrument")
under which the Company or one or more Restricted
Subsidiaries or the Company and one or more Restricted
Subsidiaries then have outstanding Indebtedness in excess
of $15,000,000, individually or in the aggregate, and
either (i) such Indebtedness is already due and payable in
full or (ii) such default or defaults have resulted in the
acceleration of the maturity of such Indebtedness; or
(f) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of
$15,000,000, either individually or in the aggregate, over
(a) the coverage under applicable binding insurance
policies issued by a solvent insurer which has accepted
such coverage and (b) the extent to which the Company or
any such Restricted Subsidiary shall be entitled pursuant
to the terms of any agreement then in effect, to
reimbursement, indemnity or contribution from any person
(other than the Company or any of its Subsidiaries) that
is solvent for amounts as to which the Company or such
Restricted Subsidiary may become liable and has accepted
such liability, shall be entered against the Company or
any Restricted Subsidiary or any of their respective
properties and shall not be discharged or fully bonded and
there shall have been a period of 60 days after the date
on which any period for appeal has expired and during
which a stay of enforcement of such judgment, order or
decree shall not be in effect; or
(g) either (i) the collateral agent under the Credit
Agreement or (ii) any holder of at least $15,000,000 in
aggregate principal amount of Indebtedness of the Company
or any of the Restricted Subsidiaries shall commence (or
have commenced on its behalf) judicial proceedings to
foreclose upon assets of the Company or any of the
Restricted Subsidiaries having an aggregate Fair Market
Value, individually or in the aggregate, in excess of
$15,000,000 or shall have exercised any right under
applicable law or applicable security documents to take
ownership of any such assets in lieu of foreclosure; or
(h) any Guarantee ceases to be in full force and
effect (other than as expressly provided for under this
Indenture) or is declared null and void, or any Guarantor
denies that it has any further liability under any
Guarantee, or gives notice to such effect (other than by
reason of the termination of this Indenture or the release
of any such Guarantee in accordance with this Indenture);
or
(i) The Company, any Guarantor 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 entry of an order for
relief against it in an involuntary case or
proceeding;
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of its
property; or
(iv) makes a general assignment for the benefit
of its creditors; or
(j) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(i) is for relief against the Company, any
Guarantor or any Significant Subsidiary of the
Company in an involuntary case or proceeding,
(ii) appoints a Custodian of the Company, any
Guarantor or any Significant Subsidiary of the
Company for all or substantially all of its
properties, or
(iii) orders the liquidation of the Company, any
Guarantor or any Significant Subsidiary of the
Company.
Subject to the provisions of Sections 7.01 and 7.02,
the Trustee shall not be charged with knowledge of any Default
or Event of Default (other than those set forth in Section
6.01(a) or (b)) unless written notice thereof shall have been
given to a Trust Officer at the Corporate Trust Office of the
Trustee by the Company, the Paying Agent, any Holder, any
holder of Senior Indebtedness or Guarantor Senior Indebtedness
or any of their respective agents.
Section 6.02. Acceleration.
If an Event of Default (other than an Event of
Default specified in Section 6.01(i) or (j) with respect to the
Company or any Guarantor) shall occur and be continuing, the
Trustee, by written notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Notes then
outstanding, by written notice to the Trustee and the Company,
may declare the principal of and accrued interest on all of the
outstanding Notes to be due and payable immediately, upon which
declaration, all amounts payable in respect of the Notes shall
become and be immediately due and payable; provided that so
long as the Credit Agreement shall be in full force and effect,
if an Event of Default shall have occurred and be continuing
(other than an Event of Default in Section 6.01(i) or (j) with
respect to the Company or any Guarantor), any such acceleration
shall not be effective until the earlier to occur of (x) five
business days following delivery of a notice of such
acceleration to the agent under the Credit Agreement and
(y) the acceleration of any Indebtedness under the Credit
Agreement. If an Event of Default specified in Section 6.1(i)
or (j) with respect to the Company or any Guarantor occurs and
is continuing, then the principal of and accrued interest on
all of the outstanding Notes 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 Notes.
Notwithstanding the foregoing, in the event of a
declaration of acceleration in respect of the Notes because an
Event of Default specified in Section 6.01(e) shall have
occurred and be continuing, such declaration of acceleration
shall be automatically annulled if the Indebtedness that is the
subject of such Event of Default has been discharged or paid or
such Event of Default shall have been cured or waived by the
holders of such Indebtedness and written notice of such
discharge, cure or waiver, as the case may be, shall have been
given to the Trustee by the Company or by the requisite holders
of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 60 days after such declaration of acceleration
in respect of the Notes and no other Event of Default shall
have occurred which has not been cured or waived during such
60-day period.
At any time after such declaration of acceleration
has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee, Holders of a
majority in aggregate principal amount of the Notes
outstanding, by written notice to the Company and the Trustee,
may rescind such declaration and its consequences if:
(a) The Company has paid or deposited with the
Trustee a sum sufficient to pay
(i) all sums paid or advanced by the Trustee
under this Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee,
its agents and counsel,
(ii) all overdue interest on all Notes,
(iii) the principal of any Notes which have
become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne
by the Notes, and
(iv) to the extent that payment of such interest
is lawful, interest upon overdue interest and overdue
principal at the rate borne by the Notes which has
become due otherwise than by such declaration of
acceleration;
(b) such rescission would not conflict with any
judgment or decree of a court of competent jurisdiction;
and
(c) all Events of Default, other than the non-
payment of principal of and interest on the Notes which
has become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 6.04.
No such rescission shall affect any subsequent
Default or Event of Default or impair any right consequent
thereon.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on
the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
All rights of action and claims under this Indenture
or the Notes may be enforced by the Trustee even if it does not
possess any of the Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Note-
holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Subject to the provisions of Sections 6.07 and 9.02,
the Holders of not less than a majority in aggregate principal
amount of the outstanding Notes by notice to the Trustee may,
on behalf of the Holders of all the Notes, waive any past
Defaults and their consequences, except a Default or Event of
Default specified in Section 6.01(a) or (b) or in respect of
any provision hereof which cannot be modified or amended
without the consent of the Holder so affected pursuant to
Section 9.02. When a Default or Event of Default is so waived,
it shall be deemed cured and shall cease to exist.
Section 6.05. Control by Majority.
The Holders of at least a majority in aggregate
principal amount of the outstanding Notes shall have the right
to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee,
provided that the Trustee may refuse to follow any direction
(a) that conflicts with any rule of law or this Indenture, (b)
that the Trustee determines may be unduly prejudicial to the
rights of another Noteholder, or (c) that may expose the
Trustee to personal liability unless the Trustee has
indemnification satisfactory to it in its sole discretion
against any loss or expense caused by its following such
direction; and provided, further, that the Trustee may take any
other action deemed proper by the Trustee that is not
inconsistent with such direction.
Section 6.06. Limitation on Suits.
No Holder of any Notes shall have any right to
institute any proceeding or pursue any remedy with respect to
this Indenture or the Notes unless:
(a) the Holder gives written notice to the Trustee
of a continuing Event of Default;
(b) the Holders of at least 25% in aggregate
principal amount of the outstanding Notes make a written
request to the Trustee to pursue the remedy within 60 days
of the receipt of such notice;
(c) such Holder or Holders offer and, if requested,
provide to the Trustee reasonable indemnity satisfactory
to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer
and, if requested, provision of indemnity; and
(e) during such 60-day period the Holders of a
majority in aggregate principal amount of the outstanding
Notes do not give the Trustee a direction which is
inconsistent with the request;
The foregoing limitations shall not apply to a suit
instituted by a Holder for the enforcement of the payment of
principal of or accrued interest on, such Note held by such
Holder on or after the respective due dates set forth in such
Note.
A Holder may not use this Indenture to prejudice the
rights of any other Holders or to obtain priority or preference
over such other Holders.
Section 6.07. Right of Holders To Receive Payment.
Notwithstanding any other provision in this
Indenture, the right of any Holder of Notes to receive payment
of the principal of and interest on such Note, on or after the
respective Stated Maturities expressed in such Note, or to
bring suit for the enforcement of any such payment on or after
the respective Stated Maturities, is absolute and unconditional
and shall not be impaired or affected without the consent of
the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in clause (a) or (b)
of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express
trust against the Company, each Guarantor or any other obligor
on the Notes for the whole amount of principal of and accrued
interest remaining unpaid, together with interest on overdue
principal and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each
case at the rate per annum borne by the Notes and such further
amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.
Section 6.09. Trustee May File Proofs of Claims.
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed
in any judicial proceedings relative to the Company or the
Guarantors of the Company (or any other obligor upon the
Notes), their creditors or their property and shall be entitled
and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial
proceedings is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agent and counsel, and any other amounts
due the Trustee under Section 7.08. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this
Article Six, it shall pay out such money in the following
order:
First: to the Trustee for amounts due under Section
7.08;
Second: subject to Article Eleven, to Holders for
interest accrued on the Notes, ratably, without preference
or priority of any kind, according to the amounts due and
payable on the Notes for interest;
Third: subject to Article Eleven, to Holders for
principal amounts owing under the Notes, ratably, without
preference or priority of any kind, according to the
amounts due and payable on the Notes for principal; and
Fourth: the balance, if any, to the Company or, to
the extent the Trustee collects any amount from any
Guarantor, to such Guarantor.
The Trustee, upon prior written notice to the
Company, may fix a record date and payment date for any payment
to Noteholders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court may
in its discretion require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to any suit by the Trustee,
any suit by a Holder pursuant to Section 6.07, or a suit by
Holders of more than 10% in aggregate principal amount of the
outstanding Notes.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture,
any Note or any Guarantee and such proceeding has been
discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and
in every such case the Company, each Guarantor, 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.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties.
(a) 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.
(b) Except during the continuance of an Event of
Default,
(1) the Trustee need perform 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, and 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.
(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
(1) this paragraph does not limit the effect
of paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust
Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with
respect to any action it takes or omits to take in
good faith in accordance with a direction received
by it pursuant to Section 6.05;
(d) 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.
(e) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b),
(c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on
any assets received by it except as the Trustee may agree with
the Company. Assets held in trust by the Trustee need not be
segregated from other assets except to the extent required by
law.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof and the provisions of
TIA { 315:
(a) the Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(b) before the Trustee acts or refrains from acting,
it may consult with counsel and may require an Officers'
Certificate or an Opinion of Counsel, which shall conform
to Sections 12.04 and 12.05. The Trustee shall not be
liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion.
(c) the Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) 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;
(e) the Trustee may consult with counsel of its own
choosing and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization
and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit.
(g) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the
Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby.
Section 7.03. Individual Rights of Trustee.
The Trustee, any Paying Agent, Registrar or any other
agent of the Company, in its individual or any other capacity,
may become the owner or pledgee of Notes and, subject to
Sections 7.11 and 7.12 and TIA Sections 310 and 311, may
otherwise deal with the Company and its Subsidiaries with the
same rights it would have if it were not the Trustee, Paying
Agent, Registrar or such other agent.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representations as to the
validity or sufficiency of this Indenture, the Notes or of any
Guarantee, it shall not be accountable for the Company's use or
application of the proceeds from the Notes, it shall not be
responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be
responsible for any statement in the Notes other than the
Trustee's certificate of authentication.
Section 7.05. Notice of Default.
If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall
mail to each Holder notice of the Default or Event of Default
within 30 days after obtaining knowledge thereof; provided
that, except in the case of a Default or Event of Default in
the payment of the principal of or interest on any Note, the
Trustee may withhold such notice if a committee of its trust
officers in good faith determines that withholding such notice
is in the interest of the Holders.
Section 7.06. 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 7.07. Reports by Trustee to Holders.
Within 60 days after each April 30 beginning with the
April 30 following the date of this Indenture, the Trustee
shall, to the extent that any of the events described in TIA
Section 313(a) occurred within the previous twelve months, but
not otherwise, mail to each Holder a brief report dated as of
such April 30 that complies with TIA Section 313(a). The Trustee
also shall comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed with the SEC
and each securities exchange, if any, on which the Notes are
listed.
The Company shall notify the Trustee in writing if
the Notes become listed on any securities exchange.
Section 7.08. Compensation and Indemnity.
The Company and the Guarantors covenant and agree to
pay the Trustee from time to time reasonable compensation for
its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust.
The Company and the Guarantors shall reimburse the Trustee upon
request for all reasonable disbursements, expenses and advances
incurred or made by it. Such expenses shall include the
reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company and the Guarantors shall indemnify the
Trustee for, and hold it harmless against, any loss or
liability incurred by it arising out of or in connection with
the administration of this trust and its rights or duties
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The
Trustee shall notify the Company and the Guarantors promptly of
any claim asserted against the Trustee for which it may seek
indemnity. The Company and the Guarantors shall defend the
claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company and the
Guarantors shall pay the reasonable fees and expenses of such
counsel. The Company and the Guarantors need not pay for any
settlement made without its written consent. The Company and
the Guarantors need not reimburse any expense or indemnify
against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful
misconduct.
To secure the Company's and the Guarantors' payment
obligations in this Section 7.08, the Trustee shall have a Lien
prior to the Notes on all assets held or collected by the
Trustee, in its capacity as Trustee, except assets held in
trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section
6.01(i) or (j) with respect to the Company or a Guarantor, the
expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
The Company's obligations under this Section 7.08 and
any Lien arising hereunder shall survive the resignation or
removal of any trustee, the discharge of the Company's or any
Guarantor's obligations pursuant to Article Eight and/or the
termination of this Indenture.
Section 7.09. Replacement of Trustee.
The Trustee may resign by so notifying the Company
and the Guarantors. The Holders of a majority in principal
amount of the outstanding Notes may remove the Trustee by so
notifying the Company and the Trustee and may appoint a
successor trustee with the Company's consent. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.11;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect
to the Trustee under any Bankruptcy Law;
(c) a receiver or other public officer takes charge
of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company and
the Guarantors shall notify each Holder of such event and shall
promptly appoint a successor Trustee. The Trustee shall be
entitled to payment of its fees and reimbursement of its
expenses while acting as Trustee, and to the extent such
amounts remain unpaid, the Trustee that has resigned or has
been removed shall retain the Lien afforded by Section 7.08.
Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the outstanding
Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to
the Company. Immediately after that, the retiring Trustee
shall transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in
Section 7.08, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under
this Indenture. A successor Trustee shall mail notice of its
succession to each Noteholder.
If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company or the Holders of at least 25% in
principal amount of the outstanding Notes may petition any
court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.11, any
Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee.
Notwithstanding replacement of the Trustee pursuant
to this Section 7.09, the Company's and the Guarantors'
obligations under Section 7.08 shall continue for the benefit
of the retiring Trustee.
Section 7.10. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation
or national banking association without any further act shall,
if such resulting, surviving or transferee corporation or
national banking association is otherwise eligible hereunder,
be the successor Trustee.
Section 7.11. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Sections 310(a)(1)
and 310(a)(5) and which shall have a combined capital and surplus
of at least $50,000,000. If such corporation publishes reports
of condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the
effect hereinafter specified in this Article.
Section 7.12. Preferential Collection of Claims
Against Company.
The Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b).
If the present or any future Trustee shall resign or be removed,
it shall be subject to TIA Section 311(a) to the extent provided
therein.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's
Obligations.
The Company may terminate its obligations under the
Notes and this Indenture, and the obligations of the Guarantors
shall terminate, except those obligations referred to in the
penultimate paragraph of this Section 8.01, if all Notes
previously authenticated and delivered (other than destroyed,
lost or stolen Notes which have been replaced or paid or Notes
for whose payment money has theretofore been deposited with the
Trustee or the Paying Agent in trust or segregated and held in
trust by the Company and thereafter repaid to the Company, as
provided in Section 8.04) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable by
it hereunder, or if:
(a) either (i) pursuant to Article Three, the
Company shall have given notice to the Trustee and mailed
a notice of redemption to each Holder of the redemption of
all of the Notes under arrangements satisfactory to the
Trustee for the giving of such notice or (ii) all Notes
have otherwise become due and payable hereunder;
(b) The Company shall have irrevocably deposited or
caused to be deposited with the Trustee or a trustee
satisfactory to the Trustee, under the terms of an
irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Holders for that purpose,
money in such amount as is sufficient without
consideration of reinvestment of such interest, to pay
principal of and interest on the outstanding Notes to
maturity or redemption; provided that the Trustee shall
have been irrevocably instructed to apply such money to
the payment of said principal and interest with respect to
the Notes and, provided, further, that from and after the
time of deposit, the money deposited shall not be subject
to the rights of holders of Senior Indebtedness pursuant
to the provisions of Article Ten;
(c) no Default or Event of Default with respect to
this Indenture or the Notes shall have occurred and be
continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit will not result in
a breach or violation of, or constitute a default under,
any other instrument to which the Company is a party or by
which it is bound;
(d) The Company shall have paid all other sums
payable by it hereunder;
(e) The Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, which,
taken together, state that all conditions precedent
providing for the termination of the Company's and each
Guarantor's obligation under the Notes and this Indenture
have been complied with. Such Opinion of Counsel shall
also state that such satisfaction and discharge does not
result in a default under the Credit Agreement (if then in
effect) or any other agreement or instrument then known to
such counsel that binds or affects the Company.
Notwithstanding the foregoing paragraph, the
Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 4.01,
4.02 and 7.08 and the Guarantors' obligations in respect
thereof shall survive until the Notes are no longer outstanding
pursuant to the last paragraph of Section 2.08. After the
Notes are no longer outstanding, the Company's obligations in
Sections 7.08, 8.04 and 8.05 and the Guarantors' obligations in
respect thereof shall survive.
After such delivery or irrevocable deposit the
Trustee upon request shall acknowledge in writing the discharge
of the Company's and the Guarantors' obligations under the
Notes and this Indenture except for those surviving obligations
specified above.
Section 8.02. Legal Defeasance and Covenant
Defeasance.
(a) The Company may, at its option by Board
Resolution of the Board of Directors which shall be delivered
to the Trustee, at any time, with respect to the outstanding
Notes and the Guarantees, elect to have either paragraph (b) or
paragraph (c) below be applied to the outstanding Notes and the
Guarantees upon compliance with the conditions set forth in
paragraph (d).
(b) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (b), each of the
Company and the Guarantors shall be deemed to have been
released and discharged from its respective obligations with
respect to the outstanding Notes and the Guarantees on the date
the conditions set forth below are satisfied (hereinafter,
"legal defeasance"). For this purpose, such legal defeasance
means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the then
outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of paragraph (e) below and
the other Sections of and matters under this Indenture referred
to in (i) and (ii) below, and to have satisfied all its other
obligations under such Notes and this Indenture insofar as such
Notes are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the
same), and Holders of the Notes and the Guarantees and any
amounts deposited under paragraph (d) below shall cease to be
subject to any obligations to, or the rights of, any holder of
Senior Indebtedness or Guarantor Senior Indebtedness under
Articles Ten, Eleven or otherwise, except for the following
which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding Notes to
receive solely from the trust fund described in paragraph (d)
below and as more fully set forth in such paragraph, payments
in respect of the principal of and interest on such Notes when
such payments are due, (ii) the Company's obligations with
respect to such Notes under Sections 2.06, 2.07 and 4.02, and,
with respect to the Trustee, under Section 7.08 and the
Guarantor's obligations in respect thereof, (iii) the rights,
powers, trusts, duties and immunities of the Trustee hereunder
and (iv) this Section 8.02 and Section 8.05. Subject to
compliance with this Section 8.02, the Company may exercise its
option under this paragraph (b) notwithstanding the prior
exercise of its option under paragraph (c) below with respect
to the Notes.
(c) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (c), the Company
shall be released and discharged from its obligations under any
covenant contained in Articles Five and Eleven and in Sections
4.05 through 4.18 with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Notes shall
thereafter be deemed to be not "outstanding" for the purpose 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 and Holders of the Notes and the
Guarantees and any amounts deposited under paragraph (d) below
shall cease to be subject to any obligations to, or the rights
of, any holder of Senior Indebtedness or Guarantor Senior
Indebtedness under Articles Ten, Eleven or otherwise. For this
purpose, such covenant defeasance means that, with respect to
the outstanding Notes, the Company and any Guarantor may omit
to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not
constitute a Default or an Event of Default under
Section 6.01(c), but, except as specified above, the remainder
of this Indenture and such Notes shall be unaffected thereby.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to
the outstanding Notes:
(i) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.11 who
shall agree to comply with the provisions of this
Section 8.02 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 Notes, (x) cash in United
States dollars or (y) direct non-callable obligations of,
or non-callable obligations guaranteed by, the United
States of America for the payment of which guarantee or
obligation the full faith and credit of the United States
is pledged ("U.S. Government Obligations") maturing as to
principal, premium, if any, and interest in such amounts
of money and at such times as are sufficient without
consideration of any reinvestment of such interest, to pay
principal of and interest on the outstanding Notes not
later than one day before the due date of any payment, or
(z) a combination thereof, 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 principal of and interest on
the outstanding Notes on the Maturity Date or otherwise in
accordance with the terms of this Indenture and of such
Notes; provided that the Trustee (or other qualifying
trustee) shall have received an irrevocable written order
from the Company instructing the Trustee (or other
qualifying trustee) to apply such money or the proceeds of
such U.S. Government Obligations to said payments with
respect to the Notes;
(ii) no Default or Event of Default or event which
with notice or lapse of time or both would become a
Default or an Event of Default with respect to the Notes
shall have occurred and be continuing on the date of such
deposit or, insofar as Section 6.01(a) is concerned, at
any time during the period ending on the 91st day after
the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the
expiration of such period);
(iii) such legal defeasance or covenant defeasance
shall not cause the Trustee to have a conflicting interest
with respect to any Notes of the Company or any Guarantee;
(iv) such legal defeasance or covenant defeasance
shall not result in a breach or violation of, or
constitute a Default or Event of Default under, this
Indenture or any other agreement or instrument to which
the Company or any Guarantor is a party or by which it is
bound;
(v) in the case of an election under paragraph (b)
above, 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 of
this Indenture, there has been a change in the applicable
Federal income tax law, in either case to the effect that,
and based thereon such opinion shall confirm that, the
Holders of the outstanding Notes will not recognize
income, gain or loss for Federal income tax purposes as a
result of such legal 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
legal defeasance had not occurred;
(vi) in the case of an election under paragraph (c)
above, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of the
outstanding Notes 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;
(vii) The Company shall have delivered to the trustee
an opinion of counsel to the effect that (A) the trust
funds will not be subject to any rights of holders of
Senior Indebtedness, including, without limitation, those
arising under this Indenture and (B) after the 91st day
following the deposit, the trust funds will not be subject
to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights
generally;
(viii) The Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that (x) all conditions precedent provided for
relating to either the legal defeasance under
paragraph (b) above or the covenant defeasance under
paragraph (c) above, as the case may be, have been
complied with and (y) if any other Indebtedness of the
Company shall then be outstanding or committed, such legal
defeasance or covenant defeasance will not violate the
provisions of the agreements or instruments evidencing
such Indebtedness.
(e) All money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this
paragraph (e), the "Trustee") pursuant to paragraph (d) above
in respect of the outstanding Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly
or through any Paying Agent (other than the Company or any
Affiliate of the Company) as the Trustee may determine, to the
Holders of such Notes of all sums due and to become due thereon
in respect of principal and interest, but such money need not
be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to
paragraph (d) above 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 outstanding Notes.
Anything in this Section 8.02 to the contrary
notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the request, in writing, by the
Company any money or U.S. Government Obligations held by it as
provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent legal
defeasance or covenant defeasance.
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to Sections
8.01 and 8.02, and shall apply the deposited money and the
money from U.S. Government Obligations in accordance with this
Indenture to the payment of principal of and interest on the
Notes.
Section 8.04. Repayment to Company or Guarantors.
Subject to Sections 7.08, 8.01 and 8.02, the Trustee
shall promptly pay to the Company, or if deposited with the
Trustee by any Guarantor, to such Guarantor, upon receipt by
the Trustee of an Officers' Certificate, any excess money,
determined in accordance with Section 8.02, held by it at any
time. The Trustee and the Paying Agent shall pay to the
Company or any Guarantor, as the case may be, upon receipt by
the Trustee or the Paying Agent, as the case may be, of an
Officers' Certificate, any money held by it for the payment of
principal or interest that remains unclaimed for two years;
provided that the Trustee and the Paying Agent before being
required to make any payment may, but need not, at the expense
of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each
Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein, which shall
be at least 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company or
any Guarantor, as the case may be, Noteholders entitled to
money must look solely to the Company for payment as general
creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.
Section 8.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this
Indenture by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such
application, then and only then the Company's and each
Guarantors' obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had been
made pursuant to this Indenture until such time as the Trustee
is permitted to apply all such money or U.S. Government
Obligations in accordance with this Indenture; provided that if
the Company or any Guarantor has made any payment of principal
of or interest on any Notes because of the reinstatement of its
obligations, the Company or any such Guarantor, as the case may
be, shall be subrogated to the rights of the Holders of such
Notes to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
The Company and the Guarantors, when authorized by a
Board Resolution of their respective Boards of Directors, and
the Trustee may amend, waive or supplement this Indenture or
the Notes without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
provided that such amendment or supplement does not
adversely affect the rights of any Holder;
(b) to comply with Article Five;
(c) to provide for uncertificated Notes in addition
to certificated Notes;
(d) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA;
(e) to add any Subsidiary of the Company as a
Guarantor pursuant to the terms of Article Ten; provided
that the terms of Section 10.01 and 10.08 may be modified
in the manner described in the last paragraphs thereof
without the consent of the Holders;
(f) to make any change that would provide any
additional benefit or rights to the Holders or that does
not adversely affect the rights of any Holder.
Notwithstanding the above, the Trustee, the Company
and the Guarantors may not make any change that adversely
affects the legal rights of any Holders hereunder. The Company
shall be required to deliver to the Trustee an opinion of
counsel stating that any such change under this Section 9.01 or
the preceding sentence does not adversely affect the rights of
any Holder.
Section 9.02. With Consent of Holders.
Subject to Section 6.04, the Company and the
Guarantors when authorized by Board Resolutions of their
respective Boards of Directors, and the Trustee may amend or
modify this Indenture or the Notes with the written consent of
the Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding, and the Holders of not
less than a majority in aggregate principal amount of the Notes
then outstanding by written notice to the Trustee, may waive
future compliance by the Company or any Guarantor with any
provision of this Indenture, the Notes or the Guarantees except
a default in the payment of principal of or interest on the
Notes.
Notwithstanding the provisions of this Section 9.02,
without the consent of each Holder affected, an amendment,
modification or waiver, including a waiver pursuant to
Section 6.04, may not:
(a) reduce the percentage in outstanding aggregate
principal amount of Notes the Holders of which must
consent to an amendment, supplement or waiver of any
provision of this Indenture, the Notes or any Guarantee;
(b) reduce or change the rate or time for payment of
interest on any Note;
(c) reduce the principal amount outstanding of or
extend the fixed maturity of any Note or alter the
redemption provisions with respect thereto;
(d) waive a default in the payment of the principal
of or interest on, or redemption or an offer to purchase
required hereunder with respect to, any Note;
(e) make the principal of or interest on any Note
payable in money other than that stated in the Note;
(f) modify this Section 9.02 or Section 6.04 or
Section 6.07;
(g) amend, change or modify the obligation of the
Company to make and consummate a Change of Control Offer
in the event of a Change of Control or make and consummate
the offer with respect to any Asset Sale or modify any of
the provisions or definitions with respect thereto;
(h) release any Guarantor from any of its
obligations under its Guarantee or this Indenture other
than in compliance with Section 10.07 hereof;
(i) modify or change any provision of this Indenture
affecting the subordination of the Notes or the Guarantees
in a manner adverse to the Holders; or
(j) impair the right to institute suit for the
enforcement of any payment on or with respect to the
Notes.
Notwithstanding the foregoing, no amendment shall
modify any provision of this Indenture so as to affect
adversely the rights of any holder of Designated Senior
Indebtedness or any holder of Guarantor Senior Indebtedness
representing Credit Agreement Obligations at the time
outstanding which are entitled to the benefits of subordination
under this Indenture without the consent of such holder.
It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form
of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Company shall mail to the
Holders of each Note affected thereby, with a copy to the
Trustee, a notice briefly describing the amendment, supplement
or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or
affect the validity of any supplemental indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment of or supplement to this Indenture,
the Notes or the Guarantees shall comply with the TIA as then
in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder is a continuing consent
by such Holder and every subsequent Holder of that Note or
portion of that Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is
not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to his Note or portion of a
Note prior to such amendment, supplement or waiver becoming
effective. Such revocation shall be effective only if the
Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.
Notwithstanding the above, nothing in this paragraph shall
impair the right of any Holder under Section 316(b) of the TIA.
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 amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the second and third
sentences of the immediately preceding paragraph, 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 amendment, supplement or waiver or to revoke any
consent previously given, whether or not such persons continue
to be Holders after such record date. Such consent shall be
effective only for actions taken within 90 days after such
record date.
After an amendment, supplement or waiver becomes
effective, it shall bind every Holder; unless it makes a change
described in any of clauses (a) through (j) of Section 9.02; if
it makes such a change, the amendment, supplement or waiver
shall bind every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder's
Note.
Section 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the
terms of a Note, the Trustee shall (in accordance with the
specific direction of the Company) request the Holder of the
Note to deliver it to the Trustee. The Trustee shall (in
accordance with the specific direction of the Company) place an
appropriate notation on the Note about the changed terms and
return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that
reflects the changed terms. Failure to make the appropriate
notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
Section 9.06. Trustee May Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article Nine if the
amendment, supplement or waiver does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If
it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the
Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of any amendment,
supplement or waiver is authorized or permitted by this
Indenture, that it is not inconsistent herewith and that it
will be valid and binding upon the Company in accordance with
its terms.
ARTICLE TEN
GUARANTEE OF NOTES
Section 10.01. Guarantee.
Subject to the provisions of this Article Ten, each
Guarantor hereby jointly and severally unconditionally
guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and
assigns, irrespective of the validity and enforceability of
this Indenture, the Notes or the obligations of the Company or
any other Guarantors to the Holders or the Trustee hereunder or
thereunder, that: (a) the principal of and interest on the
Notes will be duly and punctually paid in full when due,
whether at maturity, by acceleration or otherwise, and interest
on the overdue principal and (to the extent permitted by law)
interest, if any, on the Notes and all other obligations of the
Company or the Guarantors to the Holders or the Trustee
hereunder or thereunder (including fees, expenses or other) and
all other Senior Subordinated Note Obligations will be promptly
paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other Senior
Subordinated Note Obligations, the same will be promptly paid
in full when due or performed in accordance with the terms of
the extension or renewal, whether at Stated Maturity, by
acceleration or otherwise. Failing payment when due of any
amount so guaranteed, or failing performance of any other
obligation of the Company to the Holders, for whatever reason,
each Guarantor will be obligated to pay, or to perform or cause
the performance of, the same immediately. An Event of Default
under this Indenture or the Notes shall constitute an event of
default under this Guarantee, and shall entitle the Holders of
Notes to accelerate the obligations of the Guarantors hereunder
in the same manner and to the same extent as the obligations of
the Company.
Each of the Guarantors hereby agrees that its
obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any
waiver or consent by any holder of the Notes with respect to
any provisions hereof or thereof, any release of any other
Guarantor, the recovery of any judgment against the Company,
any action to enforce the same, whether or not a Guarantee is
affixed to any particular Note, or any other circumstance which
might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each of the Guarantors hereby waives
the benefit of diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands
whatsoever and covenants that its Guarantee will not be
discharged except by complete performance of the obligations
contained in the Notes, this Indenture and this Guarantee. If
any Holder or the Trustee is required by any court or otherwise
to return to the Company or to any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in
relation to the Company or such Guarantor, any amount paid by
the Company or such Guarantor to the Trustee or such Holder,
this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further
agrees that, as between it, on the one hand, and the Holders of
Notes and the Trustee, on the other hand, (a) subject to this
Article Ten, the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Six hereof for the
purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in
Article Six hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Guarantee.
This Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or
against the Company for liquidation or reorganization, should
the Company become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's
assets, and shall, to the fullest extent permitted by law,
continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee on the
Notes, whether as a "voidable preference," "fraudulent
transfer" or otherwise, all as though such payment or
performance had not been made. In the event that any payment,
or any part thereof, is rescinded, reduced, restored or
returned, the Notes shall, to the fullest extent permitted by
law, be reinstated and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or
incorporator, past, present or future, or any Guarantor, as
such, shall have any personal liability under this Guarantee by
reason of his, her or its status as such stockholder, officer,
director, employer or incorporator.
The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the
Holders under this Guarantee.
The Guarantee of any Guarantor shall be subject to
such fraudulent conveyance savings provisions, net worth or
maximum amount limitations as to recourse or similar provisions
as are set forth in, and after giving effect to, any guarantee
of such Guarantor issued under the Credit Agreement at the date
hereof and shall thereafter be required to be modified in the
same manner as such guarantee under the Credit Agreement is
thereafter amended or modified; provided that no such amendment
or modification to thereafter conform to the Credit Agreement
shall be in a manner which is adverse to the Holders in any
respect. No modification or amendment referred to in the
preceding sentence shall be permitted if it would disadvantage
the Holders relative to the holders of Credit Agreement
Obligations of such Guarantor other than by operation of the
subordination provisions of this Article Ten and any Liens
permitted hereunder. Subject to the foregoing if a guarantee
under the Credit Agreement shall no longer be in effect, then
the applicable provisions of the last guarantee in effect under
the Credit Agreement shall apply for the purposes of this
paragraph.
Section 10.02. Execution and Delivery of Guarantee.
To further evidence the Guarantee set forth in
Section 10.01, each Guarantor hereby agrees that a notation of
such Guarantee, substantially in the form included in Exhibit C
hereto, shall be endorsed on each Note authenticated and
delivered by the Trustee after such Guarantee is executed and
executed by either manual or facsimile signature of an Officer
of each Guarantor. The validity and enforceability of any
Guarantee shall not be affected by the fact that it is not
affixed to any particular Note.
Each of the Guarantors hereby agrees that its
Guarantee set forth in Section 10.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Note
a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on
this Indenture or a Note no longer holds that office at the
time the Trustee authenticates such Note or at any time
thereafter, such Guarantor's Guarantee of such Note shall be
valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery
of any Guarantee set forth in this Indenture on behalf of the
Guarantor.
Section 10.03. Additional Guarantors.
Any person may become a Guarantor by executing and
delivering to the Trustee (a) a supplemental indenture in form
and substance satisfactory to the Trustee, which subjects such
person to the provisions of this Indenture as a Guarantor, and
(b) an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized and executed by such person
and constitutes the legal, valid, binding and enforceable
obligation of such person (subject to such customary exceptions
concerning fraudulent conveyance laws, creditors' rights and
equitable principles as may be acceptable to the Trustee in its
discretion).
Section 10.04. Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness.
Each Guarantor covenants and agrees, and each Holder
of a Note, by its acceptance thereof, likewise covenants and
agrees, that all payments pursuant to the Guarantee made by or
on behalf of such Guarantor are hereby expressly made
subordinate and subject in right of payment as provided in this
Article Ten to the prior payment in full in cash or cash
equivalents of all amounts payable under all existing and
future Guarantor Senior Indebtedness of such Guarantor.
This Section 10.04 and the following Sections 10.05
through 10.17 of this Article Ten shall constitute a continuing
offer to all persons who, in reliance upon such provisions,
become holders of, or continue to hold Guarantor Senior
Indebtedness of any Guarantor and, to the extent set forth in
Section 10.06(b), holders of Designated Senior Indebtedness;
and such provisions are made for the benefit of the holders of
Guarantor Senior Indebtedness of each Guarantor and, to the
extent set forth in Section 10.06(b), holders of Designated
Senior Indebtedness; and such holders (to such extent) are made
obligees hereunder and they or each of them may enforce such
provisions.
Section 10.05. Payment Over of Proceeds upon
Dissolution, etc., of a Guarantor.
In the event of (a) any insolvency or bankruptcy case
or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding in connection therewith,
relative to any Guarantor or to its creditors, as such, or to
its assets, or (b) any liquidation, dissolution or other
winding-up of any Guarantor, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or
(c) any assignment for the benefit of creditors or any other
marshalling of assets or liabilities of any Guarantor, then and
in any such event:
(1) the holders of all Guarantor Senior Indebtedness
of such Guarantor shall be entitled to receive payment in
full in cash or cash equivalents of all amounts due on or
in respect of all such Guarantor Senior Indebtedness
(including, in the case of Credit Agreement Obligations,
Other Designated Senior Indebtedness Obligations and
Related Currency and Interest Rate Protection Obligations
of such Guarantor, any interest accruing subsequent to the
filing of a petition for bankruptcy at the rate provided
for in the documentation governing such Credit Agreement
Obligations, Other Designated Senior Indebtedness
Obligations or Related Currency and Interest Rate
Protection Obligations of such Guarantor, as the case may
be, whether or not such interest is an allowed claim under
applicable law), or provision shall be made for such
payment, before the Holders of the Notes are entitled to
receive, pursuant to this Guarantee, any payment or
distribution of any kind or character by or on behalf of
such Guarantor (excluding Permitted Junior Securities) on
account of the Guarantor Senior Subordinated Note
Obligations; and
(2) any payment or distribution of assets of such
Guarantor of any kind or character, whether in cash,
property or securities (excluding Permitted Junior
Securities), by set-off or otherwise, to which the Holders
or the Trustee would be entitled but for the subordination
provisions of this Article Ten shall be paid by the
liquidating trustee or agent or other person making such
payment or distribution, whether a trustee in bankruptcy,
a receiver or liquidating trustee or otherwise, directly
to the holders of Guarantor Senior Indebtedness of such
Guarantor or their representative or representatives or to
the trustee or trustees under any indenture under which
any instruments evidencing any of such Guarantor Senior
Indebtedness may have been issued, ratably according to
the aggregate amounts remaining unpaid on account of such
Guarantor Senior Indebtedness held or represented by each,
to the extent necessary to make payment in full in cash or
cash equivalents of all such Guarantor Senior Indebtedness
remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Guarantor
Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing
provisions of this Section 10.05, the Trustee or the
Holder of any Note shall have received any payment or
distribution of assets of such Guarantor of any kind or
character, whether in cash, property or securities, in
respect of any Guarantor Senior Subordinated Note
Obligations of such Guarantor under this Guarantee before
all Guarantor Senior Indebtedness of such Guarantor is
paid in full in cash or cash equivalents or payment
thereof provided for, then and in such event such payment
or distribution (excluding Permitted Junior Securities)
shall be paid over or delivered forthwith to the trustee
in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other person making payment or
distribution of assets of such Guarantor for application
to the payment of all such Guarantor Senior Indebtedness
remaining unpaid, to the extent necessary to pay all of
such Guarantor Senior Indebtedness in full in cash or cash
equivalents, after giving effect to any concurrent payment
or distribution to or for the holders of such Guarantor
Senior Indebtedness.
Section 10.06. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness
in Default.
(a) Unless Section 10.05 shall be applicable, after
the occurrence of a Payment Default no payment or distribution
of any assets of such Guarantor of any kind or character shall
be made by or on behalf of such Guarantor on account of the
Guarantor Senior Subordinated Note Obligations or on account of
the purchase, redemption, defeasance or other acquisition of
the Senior Subordinated Note Obligations or the Guarantor
Senior Subordinated Note Obligations or any of the obligations
of such Guarantor under this Guarantee unless and until such
Payment Default shall have been cured or waived or shall have
ceased to exist or the Senior Indebtedness as to which such
Payment Default relates shall have been discharged or paid in
full in cash or cash equivalents, after which, subject to
Section 10.05 (if applicable), such Guarantor shall resume
making any and all required payments in respect of its
obligations under this Guarantee.
(b) Unless Section 10.05 shall be applicable, during
any Payment Blockage Period in respect of the Notes, no payment
or distribution of any assets of a Guarantor of any kind or
character shall be made by or on behalf of a Guarantor on
account of the Guarantor Senior Subordinated Note Obligations
or on account of the purchase, redemption, defeasance or other
acquisition of the Guarantor Senior Subordinated Note
Obligations or on account of any of the other obligations of
such Guarantor under this Guarantee; provided that the
foregoing prohibition shall not apply unless such Payment
Blockage Period has been instituted under Section 11.03(b) by a
Senior Representative acting for holders of Designated Senior
Indebtedness which also constitutes Guarantor Senior
Indebtedness. Upon the termination of any Payment Blockage
Period, subject to Section 10.05 (if applicable), such
Guarantor shall resume making any and all required payments in
respect of its obligations under this Guarantee.
(c) In the event that, notwithstanding the
foregoing, the Trustee or the Holder of any Note shall have
received any payment from a Guarantor prohibited by the
foregoing provisions of this Section 10.06, then and in such
event such payment shall be paid over and delivered forthwith
to the Senior Representative initiating the Payment Blockage
Period, in trust for distribution to the holders of Guarantor
Senior Indebtedness or, if no amounts are then due in respect
of Guarantor Senior Indebtedness, prompt return to the
Guarantor, or as a court of competent jurisdiction shall
direct.
Section 10.07. Release of a Guarantor.
(a) In the event that the Banks under the Credit
Agreement unconditionally release any Guarantor from its
obligations under the Credit Agreement and such Guarantor is
unconditionally released from its obligations under the 9-3/4%
Indenture, such Guarantor at the request of the Company shall
be unconditionally released from all obligations under its
Guarantee if such Guarantor is not a Leveraged Subsidiary;
provided that a release of a Guarantor that is a Leveraged
Subsidiary may only be obtained under the circumstances
described in this sentence if, after giving effect to the
release, such Guarantor would have been permitted to incur all
of its then outstanding Indebtedness under Section 4.08 and an
Officers' Certificate to that effect has been delivered to the
Trustee.
(b) In addition, except in the case where the
prohibition on transfer in Section 5.01(a) is applicable, upon
the sale or disposition of all of the Capital Stock of a
Guarantor by the Company or a Subsidiary of the Company, or
upon the consolidation or merger of a Guarantor with or into
any person (in each case, other than to the Company or an
Affiliate of the Company), such Guarantor shall be deemed
automatically and unconditionally released and discharged from
all obligations under this Article Ten without any further
action required on the part of the Trustee or any Holder, and
all obligations of such Guarantor, if any, in respect of any
Senior Indebtedness shall also terminate upon such transaction;
provided that (i) no Indebtedness under the Credit Agreement or
the 9-3/4% Notes is being assumed by the person to whom such
sale or disposition is made and (ii) each such Guarantor is
sold or disposed of in accordance with Section 4.13 hereof;
provided, further, that the foregoing proviso shall not apply
to the sale or disposition of a Guarantor in a foreclosure to
the extent that such proviso would be inconsistent with the
requirements of the Uniform Commercial Code.
(c) The Trustee shall deliver an appropriate
instrument evidencing the release of a Guarantor upon receipt
of a request of the Company accompanied by an Officers'
Certificate certifying as to the compliance with this Section
10.07. Any Guarantor not so released or the entity surviving
such Guarantor, as applicable, will remain or be liable under
its Guarantee as provided in this Article Ten.
The Trustee shall execute any documents reasonably
requested by the Company or a Guarantor in order to evidence
the release of such Guarantor from its obligations under its
Guarantee endorsed on the Notes and under this Article Ten.
Except as set forth in Articles Four and Five and
this Section 10.07, nothing contained in this Indenture or in
any of the Notes shall prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor or
shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 10.08. Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or
other rights which it may now or hereafter acquire against the
Company that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under this
Guarantee and this Indenture, including, without limitation,
any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or
remedy of any Holder of Notes against the Company, whether or
not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation,
the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any
other manner, payment or security on account of such claim or
other rights. If any amount shall be paid to any Guarantor in
violation of the preceding sentence and the Notes shall not
have been paid in full, such amount shall have been deemed to
have been paid to such Guarantor for the benefit of, and held
in trust for the benefit of, the Holders of the Notes, and
shall, subject to the subordination provisions of this Article
and to Article Eleven, forthwith be paid to the Trustee for the
benefit of such Holders to be credited and applied upon the
Notes, whether matured or unmatured, in accordance with the
terms of this Indenture. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing
arrangements contemplated by this Indenture and that the waiver
set forth in this Section 10.08 is knowingly made in
contemplation of such benefits.
This Section 10.08 as applicable to any particular
Guarantor may be amended or modified, without the consent of
the Holders, in a manner to be consistent with the terms of any
waiver of subrogation language set forth in any guarantee of
such Guarantor issued under the Credit Agreement at the time
that the Guarantee hereunder is first issued and shall
thereafter be required to be modified in the same manner as
such guarantee under the Credit Agreement is thereafter amended
or modified; provided that no such amendment or modification to
thereafter conform to the Credit Agreement shall be in a manner
which is adverse to the Holders in any respect. No
modification or amendment referred to in the preceding sentence
shall be permitted if it would disadvantage the Holders
relative to the holders of Credit Agreement Obligations of such
Guarantor other than by operation of the subordination
provisions of this Article Ten and any Liens permitted
hereunder.
Section 10.09. Guarantee Provisions Solely To
Define Relative Rights.
The subordination provisions of this Article are and
are intended solely for the purpose of defining the relative
rights of the Holders of the Notes on the one hand and the
holders of Guarantor Senior Indebtedness of each Guarantor and,
to the extent set forth in Section 10.06, holders of Designated
Senior Indebtedness on the other hand. Nothing contained in
this Article Ten (other than a release pursuant to Section
10.07) or elsewhere in this Indenture or in the Notes is
intended to or shall (a) impair, as among each Guarantor, its
creditors other than holders of its Guarantor Senior
Indebtedness and the Holders of the Notes, the obligation of
such Guarantor, which is absolute and unconditional, to make
payments to the Holders in respect of its obligations under
this Guarantee as and when the same shall become due and
payable in accordance with their terms; or (b) affect the
relative rights against such Guarantor of the Holders of the
Notes and creditors of such Guarantor other than the holders of
the Guarantor Senior Indebtedness of such Guarantor; or
(c) prevent the Trustee or the Holder of any Note from
exercising all remedies otherwise permitted by applicable law
upon Default or an Event of Default under this Indenture,
subject to the rights, if any, under the subordination
provisions of this Article Ten of the holders of Guarantor
Senior Indebtedness of the Guarantors hereunder and, to the
extent set forth in Section 10.06, holders of Designated Senior
Indebtedness (1) in any case, proceeding, dissolution,
liquidation or other winding-up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the
Guarantor referred to in Section 10.05, to receive, pursuant to
and in accordance with such Section, cash, property and
securities otherwise payable or deliverable to the Trustee or
such Holder, or (2) under the conditions specified in Section
10.06, to prevent any payment prohibited by such Section or
enforce their rights pursuant to Section 10.06(c).
The failure by any Guarantor to make a payment in
respect of its obligations under this Guarantee by reason of
any provision of this Article Ten shall not be construed as
preventing the occurrence of a Default or an Event of Default
hereunder.
Section 10.10. Trustee To Effectuate Subordination
of Guarantee Obligations.
Each Holder of a Note by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination provided in this Article Ten and appoints the
Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up,
liquidation or reorganization of any Guarantor whether in
bankruptcy, insolvency, receivership proceedings, or otherwise,
the timely filing of a claim for the unpaid balance of the
indebtedness of such Guarantor owing to such Holder in the form
required in such proceedings and the causing of such claim to
be approved. If the Trustee does not file such a claim prior
to 30 days before the expiration of the time to file such a
claim, the holders of Guarantor Senior Indebtedness, or any
Senior Representative, may file such a claim on behalf of
Holders of the Notes.
Section 10.11. No Waiver of Guarantee Subordination
Provisions.
(a) No right of any present or future holder of any
Guarantor Senior Indebtedness of any Guarantor or Designated
Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or any
Guarantor or by any act or failure to act, in good faith, by
any such holder, or by any non-compliance by the Company or any
Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
(b) Without limiting the generality of subsection
(a) of this Section 10.11, the holders of Guarantor Senior
Indebtedness of any Guarantor may, at any time and from time to
time, without the consent of or notice to the Trustee or the
Holders of the Notes, without incurring responsibility to the
Holders of the Notes and without impairing or releasing the
subordination provided in this Article Ten or the obligations
hereunder of the Holders of the Notes to the holders of such
Guarantor Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, such
Guarantor Senior Indebtedness or any Senior Indebtedness as to
which such Guarantor Senior Indebtedness relates or any
instrument evidencing the same or any agreement under which
such Guarantor Senior Indebtedness or such Senior Indebtedness
is outstanding; (2) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing such
Guarantor Senior Indebtedness or any Senior Indebtedness as to
which such Guarantor Senior Indebtedness relates; (3) release
any person liable in any manner for the collection or payment
of such Guarantor Senior Indebtedness or any Senior
Indebtedness as to which such Guarantor Senior Indebtedness
relates; and (4) exercise or refrain from exercising any rights
against such Guarantor and any other person; provided that in
no event shall any such actions limit the right of the Holders
of the Notes to take any action to accelerate the maturity of
the Notes pursuant to Article Six hereof or to pursue any
rights or remedies hereunder or under applicable laws if the
taking of such action does not otherwise violate the terms of
this Indenture.
Section 10.12. Guarantors To Give Notice to Trustee.
(a) The Company and each Guarantor shall give prompt
written notice to the Trustee of any fact known to such
Guarantor which would prohibit the making of any payment to or
by the Trustee in respect of the Notes. Notwithstanding the
subordination provisions of this Article or any other provision
of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee in respect of
the Notes, unless and until the Trustee shall have received
written notice thereof at its Corporate Trust Office from the
Company, such Guarantor or a holder of its Guarantor Senior
Indebtedness or from any trustee, fiduciary or agent therefor;
and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of this Section 10.12, shall
be entitled in all respects to assume that no such facts exist;
provided that if the Trustee shall not have received the notice
provided for in this Section 10.12 at least two Business Days
prior to the date upon which by the terms hereof any money may
become payable for any purpose under this Indenture (including,
without limitation, the payment of the principal of or interest
on any Note), then, anything herein contained to the contrary
notwithstanding but without limiting the rights and remedies of
the holders of such Guarantor Senior Indebtedness or any
trustee, fiduciary or agent thereof, the Trustee shall have
full power and authority to receive such money and to apply the
same to the purpose for which such money was received and shall
not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date; nor
shall the Trustee be charged with knowledge of the curing of
any such default or the elimination of the act or condition
preventing any such payment unless and until the Trustee shall
have received an Officers' Certificate from such Guarantor to
such effect.
(b) Subject to the provisions of Section 7.01, the
Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee, by a person representing himself
to be a holder of Guarantor Senior Indebtedness of any
Guarantor (or a trustee, fiduciary or agent therefor). In the
event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as
a holder of Guarantor Senior Indebtedness of any Guarantor to
participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to
the amount of Guarantor Senior Indebtedness of each Guarantor
held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such person under this
Article Ten, and if such evidence is not furnished, the Trustee
may defer any payment to such person pending judicial
determination as to the right of such person to receive such
payment.
Section 10.13. Reliance on Judicial Order or
Certificate of Liquidating Agent
Regarding Dissolution, etc., of
Guarantors.
Upon any payment or distribution of assets of any
Guarantor referred to in this Article Ten, the Trustee, subject
to the provisions of Section 7.01, and the Holders shall be
entitled to rely upon any order or decree entered by any court
of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution,
winding-up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of
ascertaining the persons entitled to participate in such
payment or distribution, the holders of Guarantor Senior
Indebtedness of such Guarantor and other Indebtedness of such
Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Ten; provided that the
foregoing shall apply only if such court has been fully
apprised of the provisions of this Article Ten.
Section 10.14. Rights of Trustee as a Holder of
Guarantor Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Ten with
respect to any Guarantor Senior Indebtedness of any Guarantor
which may at any time be held by the Trustee, to the same
extent as any other holder of such Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in this
Article Ten shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.08.
Section 10.15. Article Ten Applicable to Paying
Agents.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
Ten shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article Ten in addition to
or in place of the Trustee; provided that Section 10.14 shall
not apply to the Company or any Affiliate of the Company if it
or such Affiliate acts as Paying Agent.
Section 10.16. No Suspension of Remedies Subject
to Rights of Holders of Guarantor
Senior Indebtedness.
Nothing contained in this Article Ten shall limit the
right of the Trustee or the Holders of Notes to take any action
to accelerate the maturity of the Notes pursuant to Article Six
or to pursue any rights or remedies hereunder or under
applicable law, subject to the rights, if any, under this
Article Ten of the holders, from time to time, of Guarantor
Senior Indebtedness of the Guarantors.
Section 10.17. Trustee's Relation to Guarantor
Senior Indebtedness.
With respect to the holders of Guarantor Senior
Indebtedness of any Guarantor, the Trustee undertakes to
perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Ten
(and in Article Eleven with respect to Senior Indebtedness),
and no implied covenants or obligations with respect to the
holders of Guarantor Senior Indebtedness of any Guarantor shall
be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of
Guarantor Senior Indebtedness of any Guarantor and the Trustee
shall not be liable to any holder of Guarantor Senior
Indebtedness of any Guarantor if it shall mistakenly pay over
or deliver to Holders, the Company or any other person moneys
or assets to which any holder of Guarantor Senior Indebtedness
of any Guarantor shall be entitled by virtue of this Article
Ten or otherwise.
Section 10.18. Subrogation.
Upon the payment in full in cash or cash equivalents
of all amounts payable under or in respect of Guarantor Senior
Indebtedness of the Guarantors and of all Senior Indebtedness
of the Company, the Holders shall be subrogated to the rights
of the holders of such Guarantor Senior Indebtedness of the
Guarantors to receive payments or distributions of assets of
any Guarantor made on such Guarantor Senior Indebtedness of the
Guarantors until all amounts due under the Guarantee shall be
paid in full; and for the purposes of such subrogation, no
payments or distributions to holders of such Guarantor Senior
Indebtedness of the Guarantors of any cash, property or
securities to which Holders of the Notes would be entitled
except for the provisions of this Article Ten, and no payment
pursuant to the provisions of this Article Ten to holders of
such Guarantor Senior Indebtedness of the Guarantors by the
Holders, shall, as between each Guarantor, its creditors other
than holders of such Guarantor Senior Indebtedness of the
Guarantors and the Holders, be deemed to be a payment by such
Guarantor to or on account of such Guarantor Senior
Indebtedness of the Guarantors, its being understood that the
provisions of this Article Ten are solely for the purpose of
defining the relative rights of the holders of such Guarantor
Senior Indebtedness of the Guarantors, on the one hand, and the
Holders, on the other hand.
If any payment or distribution to which the Holders
would otherwise have been entitled but for the provisions of
this Article Ten shall have been applied, pursuant to the
provisions of this Article Ten, to the payment of all amounts
payable under the Guarantor Senior Indebtedness of the
Guarantors, then and in such case, the Holders shall be
entitled to to receive from the holders of such Guarantor
Senior Indebtedness of the Guarantors at the time outstanding
any payments or distributions received by such holders of
Guarantor Senior Indebtedness of the Guarantors in excess of
the amount sufficient to pay all amounts payable under or in
respect of such Guarantor Senior Indebtedness of the Guarantors
in full.
ARTICLE ELEVEN
SUBORDINATION OF NOTES
Section 11.01. Notes Subordinate to Senior
Indebtedness.
The Company covenants and agrees, and each Holder of
a Note, by his acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set
forth in this Article Eleven, the Indebtedness represented by
the Notes and the payment of the Senior Subordinated Note
Obligations are hereby expressly made subordinate and subject
in right of payment as provided in this Article to the prior
payment in full in cash or cash equivalents of all amounts
payable under all existing and future Senior Indebtedness.
This Article Eleven shall constitute a continuing
offer to all persons who, in reliance upon such provisions,
become holders of, or continue to hold Senior Indebtedness; and
such provisions are made for the benefit of the holders of
Senior Indebtedness; and such holders are made obligees
hereunder and they or each of them may enforce such provisions.
Section 11.02. Payment Over of Proceeds upon
Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case
or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding in connection therewith,
relating to the Company or to its assets, or (b) any
liquidation, dissolution or other winding-up of the Company,
whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshalling of assets or liabilities
of the Company (including, in the case of Credit Agreement
Obligations, Other Designated Senior Indebtedness Obligations
and Related Currency and Interest Rate Protection Obligations
of the Company, any interest accruing subsequent to the filing
of a petition for bankruptcy whether or not such interest is an
allowed claim in such bankruptcy proceeding), then and in any
such event:
(1) the holders of all Senior Indebtedness shall be
entitled to receive payment in full in cash or cash
equivalents of all Senior Indebtedness before the Holders
of the Notes are entitled to receive any payment or
distribution of any kind or character (excluding Permitted
Junior Securities) on account of Senior Subordinated Note
Obligations; and
(2) any payment or distribution of assets of the
Company of any kind or character, whether in cash,
property or securities (excluding Permitted Junior
Securities), by set-off or otherwise, to which the Holders
or the Trustee would be entitled but for the provisions of
this Article shall be paid by the liquidating trustee or
agent or other person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Senior
Indebtedness or their representative or representatives or
to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of the Senior
Indebtedness held or represented by each, to the extent
necessary to make payment in full in cash or cash
equivalents of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness;
and
(3) in the event that, notwithstanding the foregoing
provisions of this Section 11.02, the Trustee or the
Holder of any Note shall have received any payment or
distribution of properties or assets of the Company of any
kind or character, whether in cash, property or
securities, by set off or otherwise in respect of any
Senior Subordinated Note Obligations before all Senior
Indebtedness is paid or provided for in full in cash or
cash equivalents, then and in such event such payment or
distribution (excluding Permitted Junior Securities) shall
be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other person making payment or
distribution of assets of the Company for application to
the payment of all Senior Indebtedness remaining unpaid,
to the extent necessary to pay all Senior Indebtedness in
full in cash or cash equivalents, after giving effect to
any concurrent payment or distribution to or for the
holders of Senior Indebtedness.
The consolidation of the Company with, or the merger
of the Company with or into, another person or the liquidation
or dissolution of the Company following the conveyance,
transfer or lease of its properties and assets substantially as
an entirety to another person upon the terms and conditions set
forth in Article Five hereof shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the
benefit of creditors or marshalling of assets and liabilities
of the Company for the purposes of this Article if the person
formed by such consolidation or the surviving entity of such
merger or the person which acquires by conveyance, transfer or
lease such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation,
merger, conveyance, transfer or lease, comply with the
conditions set forth in such Article Five.
Section 11.03. Suspension of Payment When Senior
Indebtedness in Default.
(a) Unless Section 11.02 shall be applicable, upon
the occurrence of a Payment Default, no direct or indirect
payment or distribution of any assets of the Company of any
kind or character shall be made by or on behalf of the Company
on account of the Senior Subordinated Note Obligations or on
account of the purchase or redemption or other acquisition of
any Senior Subordinated Note Obligations unless and until such
Payment Default shall have been cured or waived or shall have
ceased to exist or such Senior Indebtedness shall have been
discharged or paid in full in cash in cash equivalents, after
which, subject to Section 11.02 (if applicable), the Company
shall resume making any and all required payments in respect of
the Notes and the other Senior Subordinated Note Obligations,
including any missed payments.
(b) Unless Section 11.02 shall be applicable, upon
(1) the occurrence of a Non-payment Default and (2) receipt by
the Trustee from a Senior Representative of written notice of
such occurrence stating that such notice is a Payment Blockage
Notice pursuant to Section 11.03(b) of this Indenture, no
payment or distribution of any assets of the Company of any
kind or character shall be made by or on behalf of the Company
on account of any Senior Subordinated Note Obligations or on
account of the purchase or redemption or other acquisition of
Senior Subordinated Note Obligations for a period ("Payment
Blockage Period") commencing on the date of receipt by the
Trustee of such notice unless and until the earlier to occur of
the following events (subject to any blockage of payments that
may then be in effect under Section 11.02 or subsection (a) of
this Section 11.03) (w) 179 days shall have elapsed since
receipt of such written notice by the Trustee, (x) such Non-
payment Default shall have been cured or waived or shall have
ceased to exist (provided that no other Payment Default or Non-
payment Default has occurred and is then continuing after
giving effect to such cure or waiver), (y) all Designated
Senior Indebtedness shall have been discharged or paid in full
in cash or cash equivalents or (z) such Payment Blockage Period
shall have been terminated by written notice to the Company or
the Trustee from the Senior Representative initiating such
Payment Blockage Period, after which, subject to Section 10.02
(if applicable), the Company shall promptly resume making any
and all required payments in respect of the Senior Subordinated
Note Obligations, including any missed payments.
Notwithstanding any other provision of this Indenture, only one
Payment Blockage Period whether with respect to the Notes, the
Guarantees or the Notes and the Guarantees collectively, may be
commenced within any consecutive 360-day period. No Non-
payment Default with respect to Designated Senior Indebtedness
that existed or was continuing on the date of the commencement
of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period
shall be, or can be made, the basis for the commencement of a
second Payment Blockage Period, whether or not within a period
of 360 consecutive days, unless such default shall have been
cured or waived for a period of not less than 90 consecutive
days (it being acknowledged that any subsequent action, or any
breach of any financial covenant for a period commencing after
the date of commencement of such Payment Blockage Period, that,
in either case, would give rise to a Non-payment Default
pursuant to any provision under which a Non-payment Default
previously existed or was continuing shall constitute a new
Non-payment Default for this purpose; provided that, in the
case of a breach of a particular financial covenant, the
Company shall have been in compliance for at least one full
period commencing after the date of commencement of such
Payment Blockage Period). In no event shall a Payment Blockage
Period extend beyond 179 days from the date of the receipt of
the notice referred to in clause (2) hereof and there must be a
181 consecutive day period in any 360 consecutive day period
during which no Payment Blockage Period is in effect pursuant
to this Section 11.03(b).
(c) In the event that, notwithstanding the
foregoing, the Trustee or the Holder of any Note shall have
received any payment or distribution prohibited by the
foregoing provisions of this Section 11.03, then and in such
event such payment or distribution shall be paid over and
delivered forthwith to the Senior Representatives or as a court
of competent jurisdiction shall direct for application to the
payment of any due and unpaid Senior Indebtedness, to the
extent necessary to pay all such due and unpaid Senior
Indebtedness in cash or cash equivalents, after giving effect
to any concurrent payment to or for the holders of Senior
Indebtedness.
Section 11.04. Trustee's Relation to Senior
Indebtedness.
With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of
its covenants and obligations as are specifically set forth in
this Article Eleven (and in Article Ten with respect to any
Guarantor Senior Indebtedness), and no implied covenants or
obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and the Trustee shall not be
liable to any holder of Senior Indebtedness if it shall
mistakenly pay over or deliver to Holders, the Company, the
Guarantors or any other person moneys or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of
this Article Eleven or otherwise.
Section 11.05. Subrogation to Rights of Holders
of Senior Indebtedness.
Upon the payment in full in cash or cash equivalents
of all Senior Indebtedness, the Holders of the Notes shall be
subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Senior Indebtedness
until the principal of and interest on the Notes shall be paid
in full in cash or cash equivalents. For purposes of such
subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or securities to
which the Holders of the Notes or the Trustee would be entitled
except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Notes or the Trustee
shall, as among the Company, its creditors other than holders
of Senior Indebtedness, and the Holders of the Notes, be deemed
to be a payment or distribution by the Company to or on account
of the Senior Indebtedness.
If any payment or distribution to which the Holders
would otherwise have been entitled but for the provisions of
this Article Eleven shall have been applied, pursuant to the
provisions of this Article Eleven, to the payment of all
amounts payable under the Senior Indebtedness of the Company,
then and in such case the Holders shall be entitled to receive
from the holders of such Senior Indebtedness at the time
outstanding any payments or distributions received by such
holders of such Senior Indebtedness in excess of the amount
sufficient to pay all amounts payable under or in respect of
such Senior Indebtedness in full in cash or cash equivalents.
Section 11.06. Provisions Solely To Define Relative
Rights.
The provisions of this Article Eleven are and are
intended solely for the purpose of defining the relative rights
of the Holders of the Notes on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing contained in
this Article Eleven or elsewhere in this Indenture or in the
Notes is intended to or shall (a) impair, as among the Company,
its creditors other than holders of Senior Indebtedness and the
Holders of the Notes, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders of the Notes
the principal of, premium, if any, and interest on the Notes as
and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against the
Company of the Holders of the Notes and creditors of the
Company other than the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Note from
exercising all remedies otherwise permitted by applicable law
upon a Default or an Event of Default under this Indenture,
subject to the rights, if any, under this Article Eleven of the
holders of Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 11.02, to
receive, pursuant to and in accordance with such Section, cash,
property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified
in Section 11.03, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 11.03(c).
The failure to make a payment on account of any
Senior Subordinated Note Obligations by reason of any provision
of this Article Eleven shall not be construed as preventing the
occurrence of a Default or an Event of Default hereunder.
Section 11.07. Trustee To Effectuate Subordination.
Each Holder of a Note by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination provided in this Article Eleven and appoints the
Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company whether in
bankruptcy, insolvency, receivership proceedings, or otherwise,
the timely filing of a claim for the unpaid balance of the
Indebtedness of the Company owing to such Holder in the form
required in such proceedings and the causing of such claim to
be approved. If the Trustee does not file such a claim prior
to 30 days before the expiration of the time to file such a
claim, the holders of Senior Indebtedness, or any Senior
Representative, may file such a claim on behalf of Holders of
the Notes.
Section 11.08. No Waiver of Subordination
Provisions.
(a) No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection
(a) of this Section 11.08, the holders of Senior Indebtedness
may, at any time and from time to time, without the consent of
or notice to the Trustee or the Holders of the Notes, without
incurring responsibility to the Holders of the Notes and
without impairing or releasing the subordination provided in
this Article Eleven or the obligations hereunder of the Holders
of the Notes to the holders of Senior Indebtedness, do any one
or more of the following: (1) change the manner, place or
terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is
outstanding; (2) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any person liable in any manner for
the collection or payment of Senior Indebtedness; and
(4) exercise or refrain from exercising any rights against the
Company and any other person; provided that in no event shall
any such actions limit the right of the Holders of the Notes to
take any action to accelerate the maturity of the Notes
pursuant to Article Six hereof or to pursue any rights or
remedies hereunder or under applicable laws if the taking of
such action does not otherwise violate the terms of this
Indenture.
Section 11.09. Notice to Trustee.
(a) The Company shall give prompt written notice to
the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in
respect of the Notes. Notwithstanding the provisions of this
Article Eleven or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Notes, unless and until the
Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee,
fiduciary or agent therefor; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of
this Section 11.09, shall be entitled in all respects to assume
that no such facts exist; provided that if the Trustee shall
not have received the notice provided for in this Section 11.09
at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose under
this Indenture (including, without limitation, the payment of
the principal of or interest on any Note), then, anything
herein contained to the contrary notwithstanding but without
limiting the rights and remedies of the holders of Senior
Indebtedness or any trustee, fiduciary or agent thereof, the
Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money
was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days
prior to such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the elimination
of the act or condition preventing any such payment unless and
until the Trustee shall have received an Officers' Certificate
to such effect.
(b) Subject to the provisions of Section 7.01, the
Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee by a person representing himself
to be a holder of Senior Indebtedness (or a trustee, fiduciary
or agent therefor) to establish that such notice has been given
by a holder of Senior Indebtedness (or a trustee, fiduciary or
agent therefor). In the event that the Trustee determines in
good faith that further evidence is required with respect to
the right of any person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this
Article Eleven, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such person, the
extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the
rights of such person under this Article Eleven, and if such
evidence is not furnished, the Trustee may defer any payment to
such person pending judicial determination as to the right of
such person to receive such payment.
Section 11.10. Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the
Company referred to in this Article Eleven, the Trustee,
subject to the provisions of Section 7.01, and the Holders,
shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization,
dissolution, winding-up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other person making such payment
or distribution, delivered to the Trustee or to the Holders,
for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of
Senior Indebtedness and other Indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or
to this Article; provided that the foregoing shall apply only
if such court has been fully apprised of the provisions of this
Article Eleven.
Section 11.11. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Eleven
with respect to any Senior Indebtedness which may at any time
be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in this
Article Eleven shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.08.
Section 11.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article Eleven in addition
to or in place of the Trustee; provided that Section 11.11
shall not apply to the Company or any Affiliate of the Company
if it or such Affiliate acts as Paying Agent.
Section 11.13. No Suspension of Remedies.
Nothing contained in this Article Eleven shall limit
the right of the Trustee or the Holders of Notes to take any
action to accelerate the maturity of the Notes pursuant to
Article Six or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this
Article Eleven of the holders, from time to time, of Senior
Indebtedness.
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. Trust Indenture Act of 1939.
This Indenture is subject to the provisions of the
TIA that are required to be a part of this Indenture, and
shall, to the extent applicable, be governed by such
provisions.
If any provision of this Indenture modifies 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.
Section 12.02. Notices.
Any notice or communication shall be sufficiently
given if in writing and delivered in person or mailed by first
class mail, postage prepaid, addressed as follows:
If to the Company or any Guarantor to:
Foodbrands America, Inc.
1601 Northwest Expressway
Suite 1700
Oklahoma City, OK 73118-1495
Attention: William L. Brady
With a copy to:
McAfee & Taft
A Professional Corporation
Two Leadership Square, Tenth Floor
Oklahoma City, OK 73102
Attention: Brice E. Tarzwell, Esq.
If to the Trustee to:
Liberty Bank and Trust Company of
Oklahoma City, National Association
100 North Broadway
Oklahoma City, Oklahoma 73102
Attention: Corporate Trust Division
The parties hereto by notice to the other parties may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed, postage prepaid,
to a Holder, including any notice delivered in connection with
TIA Section 310(b), TIA Section 313(c), TIA Section 314(a) and
TIA Section 315(b), shall be mailed by first class mail to such
Holder at the address of such Holder as it appears on the Notes
register maintained by the Registrar and shall be sufficiently
given to such Holder if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also
be mailed to the Trustee.
Failure to mail a notice or communication to a Note-
holder or any defect in it shall not affect its sufficiency
with respect to other Holders. Except for a notice to the
Trustee, which is deemed given only when received, if a notice
or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
Section 12.03. Communication by Holders with
Other Holders.
Holders may communicate pursuant to TIA Section
312(b) with other Holders with respect to their rights under this
Indenture or the Notes. The obligors, the Trustee, the Registrar
nd any other person shall have the protection of TIA Section
312(c).
Section 12.04. Certificate and Opinion as to
Conditions Precedent.
Upon any request or application by the Company or any
Guarantor to the Trustee to take any action under this
Indenture, such obligor shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent
have been complied with.
Section 12.05. Statements Required in Certificate
or Opinion.
Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or
condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statement
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such person,
he has made such examination or investigation as is
necessary to enable him to express an opinion as to
whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of such person, such condition or covenant has been
complied with; provided that with respect to matters of
fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
Section 12.06. Rules by Trustee, Paying Agent,
Registrar.
The Trustee may make reasonable rules for action by
or at a meeting of Noteholders. The Paying Agent or Registrar
may make reasonable rules for its functions.
Section 12.07. Governing Law.
The laws of the State of New York shall govern this
Indenture, the Notes and the Guarantees without regard to
principles of conflicts of law. The Trustee, the Company, the
Guarantors and the Holders agree to submit to the jurisdiction
of the courts of the State of New York in any action or
proceeding arising out of or relating to this Indenture, the
Notes and the Guarantees.
Section 12.08. No Interpretation of Other
Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company, the
Guarantors or any of their respective Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 12.09. No Recourse Against Others.
A director, officer, employee, stockholder or
Affiliate, as such, of the Company or the Guarantors shall not
have any liability for any obligations of the Company under the
Notes or this Indenture or of a Guarantor under any Guarantee
or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability.
Section 12.10. Successors.
All agreements of the Company and any Guarantors in
this Indenture, the Notes and the Guarantees shall bind their
successors. All agreements of the Trustee in this Indenture
shall bind its successors.
Section 12.11. Duplicate Originals.
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 12.12. Separability.
In case any provision in this Indenture, the Notes or
any Guarantee 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, and a Holder shall have no claim therefor against any
party hereto.
Section 12.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 12.14. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or
implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under
this Indenture.
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all as of
the day and year first above written.
FOODBRANDS AMERICA, INC.
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, NATIONAL
ASSOCIATION, as Trustee
By:/s/ Dee Anna M. Schmidt
Name: Dee Anna M. Schmidt
Title: Asst. Vice President
BRENNAN PACKING CO., INC.,
as Guarantor
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
CONTINENTAL DELI FOODS, INC.,
as Guarantor
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
DOSKOCIL FOOD SERVICE COMPANY,
L.L.C., as Guarantor
By: CONTINENTAL DELI
FOODS, INC.,
member-manager
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
By: RKR-GP, INC.,
member-manager
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
SPECIALTY BRANDS, INC.,
as Guarantor
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
FBAI INVESTMENTS CORPORATION,
as Guarantor
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
KPR HOLDINGS, L.P.,
as Guarantor
By: RKR-GP, INC.,
general partner
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
NATIONAL SERVICE CENTER, INC.,
as Guarantor
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
RKR-GP, INC., as Guarantor
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
<PAGE>
EXHIBIT A
FOODBRANDS AMERICA, INC.
10 3/4% SENIOR SUBORDINATED NOTE DUE 2006
No. $___________
FOODBRANDS AMERICA, 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 May 15,
2006, at the office or agency of the Company referred to below,
and to pay interest thereon on May 15 and November 15, in each
year, commencing on November 15, 1996, accruing from May 15,
1996 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, at the rate of
10 3/4% per annum, until the principal hereof is paid or duly
provided for. Interest shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in
the Indenture referred to on the reverse hereof, be paid to the
person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on the Regular
Record Date for such interest, which shall be May 1 or
November 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date (each a "Regular
Record Date"); provided that the record date with respect to
the first interest payment shall be the close of business on
the original date of issuance of this Note. Any such interest
not so punctually paid, or duly provided for, and interest on
such defaulted interest at the rate borne by the Notes, to the
extent lawful, shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may be paid to the
person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on a special
record date for the payment of such defaulted interest to be
fixed by the Trustee, notice of which shall be given to Holders
of Notes not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in
such Indenture.
Payment of the principal of and interest on this Note
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, 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 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 Note register maintained by
the Registrar.
Reference is hereby made to the further provisions of
this Note set forth on the reverse hereof.
Unless the certificate of authentication hereon has
been duly executed by the Trustee referred to on the reverse
hereof by manual signature, and a seal has been affixed hereon,
this Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated: FOODBRANDS AMERICA, INC.
By:
Name:
Title:
[SEAL]
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-
mentioned Indenture.
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, NATIONAL
ASSOCIATION, as Trustee
By____________________________
Authorized Signatory
<PAGE>
(Reverse of Note)
1. Indenture. This Note is one of a duly authorized
issue of Notes of the Company designated as its 10 3/4% Senior
Subordinated Notes due 2006, limited (except as otherwise
provided in the Indenture referred to below) in aggregate
principal amount to $120,000,000, which may be issued under an
indenture (herein called the "Indenture") dated as of May 15,
1996, by and among Foodbrands America, Inc., a Delaware
corporation, as issuer (the "Company"), as issuer, Brennan
Packing Co., Inc., a Delaware corporation, Continental Deli
Foods, Inc., a Delaware corporation, Doskocil Food Service
Company, L.L.C., an Oklahoma limited liability company,
Specialty Brands, Inc., a Delaware corporation, FBAI
Investments Corporation, an Oklahoma corporation, KPR Holdings,
L.P., a Delaware limited partnership, National Service Center,
Inc., a Delaware corporation, and RKR-GP, Inc., a Delaware
corporation, as guarantors (each a "Guarantor," and
collectively, the "Guarantors") and Liberty Bank and Trust
Company of Oklahoma City, National Association, as trustee (the
"Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Guarantors, the
Trustee and the Holders of the Notes, and of the terms upon
which the Notes are, and are to be, authenticated and
delivered.
All terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Indenture.
No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or
impair the absolute or unconditional obligation of the Company
and each of the Guarantors to pay the principal of and interest
on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
2. Guarantees. This Note is entitled to certain
senior subordinated Guarantees made for the benefit of the
Holders. Reference is hereby made to Section 4.18 and Article
Ten of the Indenture for terms relating to the Guarantees.
3. Subordination. The Indebtedness evidenced by the
Notes is, to the extent and in the manner provided in the
Indenture, subordinate and subject in right of payment to the
prior payment in full in cash or cash equivalents of all Senior
Indebtedness and Guarantor Senior Indebtedness as defined in
the Indenture, and this Note is issued subject to such
provisions. Each Holder of this Note, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder,
to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for
such purpose; provided that the Indebtedness evidenced by this
Note shall cease to be so subordinate and subject in right of
payment upon any defeasance of this Note referred to in
Paragraph 8 below.
4. Redemption.
(a) Optional Redemption. The Notes are subject to
redemption, at the option of the Company, as a whole or in
part, in principal amounts of $1,000 or any integral multiple
of $1,000, at any time on or after May 15, 2001 upon not less
than 30 nor more than 60 days' prior notice at the following
Redemption Prices (expressed as percentages of the principal
amount) if redeemed during the 12-month period beginning May 15
of the years indicated below:
Redemption
Year __Price___
2001 105.375%
2002 103.583%
2003 101.791%
2004 and thereafter 100.000%
plus accrued and unpaid interest, if any, to the Redemption
Date, all as provided in the Indenture.
(b) Optional Redemption upon Change of Control.
Upon the occurrence of a Change of Control, the Notes will be
redeemable, in whole but not in part, at the option of the
Company, upon not less than 30 nor more than 60 days' prior
notice to each holder of Notes to be redeemed, at a redemption
price equal to the sum of (i) the then outstanding principal
amount thereof, plus (ii) accrued and unpaid interest, if any,
to the redemption date plus (iii) the Applicable Premium.
(c) Optional Redemption upon Public Equity Offering.
On or prior to May 15, 1999, the Company may, at its option,
use the net proceeds of a Public Equity Offering which yields
gross proceeds (before discounts, commissions and expenses) of
$50.0 million or more to redeem up to an aggregate of 25% of
the principal amount of Notes originally issued from the
Holders of Notes, on a pro rata basis (or as nearly pro rata as
practicable), at a redemption price equal to 109.75% of the
principal amount thereof plus accrued and unpaid interest, if
any, to the date of redemption; provided that not less than
$75.0 million in aggregate principal amount of Notes is
outstanding following such redemption. In order to effect the
foregoing redemption with the net proceeds of a Public Equity
Offering, the Company shall send the redemption notice not
later than 60 days after the consummation of the Public Equity
Offering.
(d) Interest Payments. In the case of any
redemption of Notes, interest installments whose Stated
Maturity is on or prior to the Redemption Date will be payable
to the Holders of such Notes, or one or more Predecessor Notes,
of record at the close of business on the relevant Record Date
referred to on the face hereof. Notes (or portions thereof)
for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from
and after the Redemption Date.
(e) Partial Redemption. In the event of redemption
of this Note in part only, a new Note or Notes for the
unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
5. Offers to Purchase. Sections 4.12 and 4.13 of
the Indenture provide that upon the occurrence of a Change of
Control and following any Asset Sale, and subject to further
limitations contained therein, the Company shall make an offer
to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
6. Defaults and Remedies. If an Event of Default
shall occur and be continuing, the principal of all of the
outstanding Notes, plus all accrued and unpaid interest, if
any, to and including the date the Notes are paid, may be
declared due and payable in the manner and with the effect
provided in the Indenture.
7. Defeasance. The Indenture contains provisions
(which provisions apply to this Note) for defeasance at any
time of (a) the entire indebtedness of the Company and the
Guarantors on this Note 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.
8. Amendments and Waivers. The Indenture permits,
with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of
the Company, the Guarantors and the rights of the Holders under
the Indenture at any time by the Company, the Guarantors and
the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Notes at the time
outstanding. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal
amount of the Notes at the time outstanding, on behalf of the
Holders of all the Notes, to waive compliance by the Company
and the Guarantors with certain provisions of the Indenture and
certain past Defaults under the Indenture and this Note and
their consequences. Any such consent or waiver by or on behalf
of the Holder of this Note shall be conclusive and binding upon
such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of
such consent or waiver is made upon this Note.
9. Denominations, Transfer and Exchange. The Notes
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 Notes are exchangeable for a like
aggregate principal amount of Notes 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 Note is
registrable on the Note register of the Company, upon surrender
of this Note for registration of transfer at the office or
agency of the Company maintained for such purpose in the
Borough of Manhattan in The City of New York or at such other
office or agency of the Company as may be maintained for such
purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more
new Notes, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated
transferee or transferees.
No service charge shall be made for any registration
of transfer or exchange or redemption of Notes, but the Company
may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
10. Persons Deemed Owners. Prior to and at the time
of due presentment of this Note 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 Note is
registered as the owner hereof for all purposes, whether or not
this Note shall be overdue, and neither the Company, the
Trustee nor any agent shall be affected by notice to the
contrary.
11. Governing Law. This Note and the Guarantees
hereon shall be governed by and construed in accordance with
the laws of the State of New York, without regard to conflicts
of law principles.
12. Selection and Notice. In the event that less
than all of the Notes are to be redeemed at any time, selection
of such Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or,
if the Notes are not then listed on a national securities
exchange, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate; provided that no Notes
of a principal amount of $1,000 or less shall be redeemed in
part; provided, further, that any such redemption pursuant to
the provisions relating to a Public Equity Offering shall be
made on a pro rata basis or on as nearly a pro rata basis as
practicable (subject to the procedures of any applicable
Depository). Notice of redemption shall be mailed by first-
class mail at least 30 but not more than 60 days before the
redemption date to each Holder of Notes 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 surrender for cancellation of the original
Note. On and after the redemption date, interest will cease to
accrue on Notes or portions thereof called for redemption
unless the Company defaults in the payment of the redemption
price.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the
Company pursuant to Section 4.12 or 4.13 of the Indenture,
check the appropriate box:
Section 4.12 [ ]
Section 4.13 [ ]
If you wish to have a portion of this Note purchased
by the Company pursuant to Section 4.12 or 4.13 of the
Indenture, state the amount:
$______________
Date: __________________ Your Signature: ______________________
(Sign exactly as your
name appears on the
other side of this
Note)
Signature Guarantee: ______________________
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or
(we) assign and transfer this Note to
_________________________________________________________________
(insert assignee's soc. sec. or tax I.D. no.)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________ to transfer this
Note on the books of the Company. The agent may substitute
another to act for him.
_________________________________________________________________
Date: _____________ Your signature:______________________________
(Sign exactly as your name
appears on the face of
this Note)
Signature Guarantee:
<PAGE>
EXHIBIT B
SENIOR SUBORDINATED GUARANTEE
For value received, the undersigned hereby
unconditionally guarantees to the Holder of this Note the
payments of principal of, premium, if any, and interest on this
Note in the amounts and at the time when due and interest on
the overdue principal, premium, if any, and interest, if any,
of this Note, if lawful, and the payment or performance of all
other obligations of the Company under the Indenture or the
Notes, to the Holder of this Note and the Trustee, all in
accordance with and subject to the terms and limitations of
this Note, Article Ten of the Indenture and this Guarantee.
This Guarantee will become effective in accordance with Article
Ten of the Indenture and its terms shall be evidenced therein.
The validity and enforceability of any Guarantee shall not be
affected by the fact that it is not affixed to any particular
Note.
The obligations of the undersigned to the Holders of
Notes and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in Article Ten of the
Indenture and reference is hereby made to the Indenture for the
precise terms of the Guarantee and all of the other provisions
of the Indenture to which this Guarantee relates. The
Indebtedness evidenced by this Guarantee is, to the extent and
in the manner provided in the Indenture, subordinate and
subject in right of payment to the prior payment in full in
cash or cash equivalents of all Guarantor Senior Indebtedness
as defined in the Indenture, and this Guarantee is issued
subject to such provisions. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee, on behalf
of such Holder, to take such action as may be necessary to
appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; provided that such subordination
provisions shall cease to affect amounts deposited in
accordance with the defeasance provisions of the Indenture upon
the terms and conditions set forth therein.
This Guarantee is subject to release upon the terms
set forth in the Indenture.
BRENNAN PACKING CO., INC.,
CONTINENTAL DELI FOODS, INC.,
DOSKOCIL FOOD SERVICE COMPANY,
L.L.C.,
By: CONTINENTAL DELI FOODS, INC.,
member-manager
By: RKR-GP, INC.,
member-manager
SPECIALTY BRANDS, INC.,
FBAI INVESTMENTS CORPORATION,
KPR HOLDINGS, L.P.,
By: RKR-GP, INC.,
general partner,
NATIONAL SERVICE CENTER, INC.,
RKR-GP, INC.
By:_____________________________
Name:
Title:
FOODBRANDS AMERICA, INC.
10 3/4% SENIOR SUBORDINATED NOTE DUE 2006
CUSIP 344822 AA 9
FOODBRANDS AMERICA, 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 May 15, 2006,
at the office or agency of the Company referred to below, and to
pay interest thereon on May 15 and November 15, in each year,
commencing on November 15, 1996, accruing from May 15, 1996 or
from the most recent Interest Payment Date to which interest has
been paid or duly provided for, at the rate of 10 3/4% per annum,
until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in
the Indenture referred to on the reverse hereof, be paid to
the person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on the Regular
Record Date for such interest, which shall be May 1 or
November 1 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date (each a "Regular Record
Date"); provided that the record date with respect
to the first interest payment shall be the close of business on
the original date of issuance of this Note. Any such interest
not so punctually paid, or duly provided for, and interest on
such defaulted interest at the rate borne by the Notes, to the
extent lawful, shall forthwith cease to be payable to the Holder
on such Regular Record Date, and may be paid to the person
in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on a special record date for
the payment of such defaulted interest to be fixed by the
Trustee, notice of which shall be given to Holders of Notes not
less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in such
Indenture.
Payment of the principal of and interest on this Note 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,
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 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 Note register maintained by the
Registrar.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof.
Unless the certificate of authentication hereon has been
duly executed by the Trustee referred to on the reverse hereof by
manual signature, and a seal has been affixed hereon, this Note
shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned
Indenture.
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, NATIONAL ASSOCIATION,
as Trustee
By
Authorized Signatory
FOODBRANDS AMERICA, INC.
By: /s/ Bryant P. Bynum /s/ R. Randolph Devening
SECRETARY CHAIRMAN OF THE BOARD
<PAGE>
1. Indenture. This Note is one of a duly authorized issue of
Notes of the Company designated as its 10 3/4% Senior
Subordinated Notes due 2006, limited (except as otherwise
provided in the Indenture referred to below) in aggregate
principal amount to $120,000,000, which may be issued under an
indenture (herein called the "Indenture") dated as of May 15,
1996, by and among Foodbrands America, Inc., a Delaware
corporation, as issuer (the "Company"), Brennan Packing Co.,
Inc., a Delaware corporation, Continental Deli Foods, Inc., a
Delaware corporation, Doskocil Food Service Company, L.L.C., an
Oklahoma limited liability company, Specialty Brands, Inc., a
Delaware corporation, FBAI Investments Corporation, an Oklahoma
corporation, KPR Holdings, L.P., a Delaware limited partnership,
National Service Center, Inc., a Delaware corporation, and
RKR-GP, Inc., a Delaware corporation, as guarantors (each a
"Guarantor," and collectively, the "Guarantors") and Liberty Bank
and Trust Company of Oklahoma City, National Association, as
trustee (the "Trustee," which term includes any successor Trustee
under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the
Guarantors, the Trustee and the Holders of the Notes, and of the
terms upon which the Notes are, and are to be, authenticated and
delivered.
All terms used in this Note which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
No reference herein to the Indenture and no provisions of this
Note or of the Indenture shall alter or impair the absolute or
unconditional obligation of the Company and each of the
Guarantors to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein
prescribed.
2. Guarantees. This Note is entitled to certain senior
subordinated Guarantees made for the benefit of the Holders.
Reference is hereby made to Section 4.18 and Article Ten of the
Indenture for terms relating to the Guarantees.
3. Subordination. The Indebtedness evidenced by the Notes is, to
the extent and in the manner provided in the Indenture,
subordinate and subject in right of payment to the prior payment
in full in cash or cash equivalents of all Senior Indebtedness
and Guarantor Senior Indebtedness as defined in the Indenture,
and this Note is issued subject to such provisions. Each Holder
of this Note, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided that
the Indebtedness evidenced by this Note shall cease to be so
subordinate and subject in right of payment upon any defeasance
of this Note referred to in Paragraph 8 below.
4. Redemption.
(a) Optional Redemption. The Notes are subject to redemption, at
the option of the Company, as a whole or in part, in principal
amounts of $1,000 or any integral multiple of $1,000, at any time
on or after May 15, 2001 upon not less than 30 nor more than 60
days' prior notice at the following Redemption Prices (expressed
as percentages of the principal amount) if redeemed during the
12-month period beginning May 15 of the years indicated below:
Redemption
Year Price
____ ________
2001 105.375%
2002 103.583%
2003 101.791%
2004 and thereafter 100.000%
plus accrued and unpaid interest, if any, to the Redemption Date,
all as provided in the Indenture.
(b) Optional Redemption upon Change of Control. Upon the
occurrence of a Change of Control, the Notes will be redeemable,
in whole but not in part, at the option of the Company, upon not
less than 30 nor more than 60 days' prior notice to each holder
of Notes to be redeemed, at a redemption price equal to the sum
of (i) the then outstanding principal amount thereof, plus (ii)
accrued and unpaid interest, if any, to the redemption date plus
(iii) the Applicable Premium.
(c) Optional Redemption upon Public Equity Offering. On or prior
to May 15, 1999, the Company may, at its option, use the net
proceeds of a Public Equity Offering which yields gross proceeds
(before discounts, commissions and expenses) of $50.0 million or
more to redeem up to an aggregate of 25% of the principal amount
of Notes originally issued from the Holders of Notes, on a
pro rata basis (or as nearly pro rata as practicable), at a
redemption price equal to 109.75% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of
redemption; provided that not less than $75.0 million in
aggregate principal amount of Notes is outstanding following such
redemption. In order to effect the foregoing redemption with the
net proceeds of a Public Equity Offering, the Company shall send
the redemption notice not later than 60 days after the
consummation of the Public Equity Offering.
(d) Interest Payments. In the case of any redemption of Notes,
interest installments whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Notes, or
one or more Predecessor Notes, of record at the close of business
on the relevant Record Date referred to on the face hereof. Notes
(or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to
bear interest from and after the Redemption Date.
(e) Partial Redemption. In the event of redemption of this Note
in part only, a new Note or Notes for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
5. Offers to Purchase. Sections 4.12 and 4.13 of the Indenture
provide that upon the occurrence of a Change of Control and
following any Asset Sale, and subject to further limitations
contained therein, the Company shall make an offer to purchase
certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
6. Defaults and Remedies. If an Event of Default shall occur and
be continuing, the principal of all of the outstanding Notes,
plus all accrued and unpaid interest, if any, to and including
the date the Notes are paid, may be declared due and payable in
the manner and with the effect provided in the Indenture.
7. Defeasance. The Indenture contains provisions (which
provisions apply to this Note) for defeasance at any time of (a)
the entire indebtedness of the Company and the Guarantors on this
Note 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.
8. Amendments and Waivers. The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company, the
Guarantors and the rights of the Holders under the indenture at
any time by the Company, the Guarantors and the Trustee with
the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding.
The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Notes
at the time outstanding, on behalf of the Holders of all the
Notes, to waive compliance by the Company and the Guarantors
with certain provisions of the Indenture and certain past
Defaults under the Indenture and this Note and their
consequences. Any such consent or waiver by or on behalf of the
Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of
such consent or waiver is made upon this Note.
9. Denominations, Transfer and Exchange. The Notes 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 Notes are exchangeable for a like aggregate principal amount
of Notes 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 Note is registrable on
the Note register of the Company, upon surrender of this Note for
registration of transfer at the office or agency of the Company
maintained for such purpose in the Borough of Manhattan in The
City of New York or at such other office or agency of the
Company as may be maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations
and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
No service charge shall be made for any registration of transfer
or exchange or redemption of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
10. Persons Deemed Owners. Prior to and at the time of due
presentment of this Note 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 Note is registered as the
owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice of the contrary.
11. Governing Law. This Note and the Guarantees hereon shall be
governed by and construed in accordance with the laws of the
State of New York, without regard to conflicts of law principles.
12. Selection and Notice. In the event that less than all of the
Notes are to be redeemed at any time, selection of such Notes for
redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if
any, on which the Notes are listed or, if the Notes are not then
listed on a national securities exchange, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and
appropriate; provided that no Notes of a principal amount of
$1,000 or less shall be redeemed in part; provided, further, that
any such redemption pursuant to the provisions relating to a
Public Equity Offering shall be made on a pro rata basis or on as
nearly a pro rata basis as practicable (subject to the procedures
of any applicable Depository). Notice of redemption shall be
mailed by first-class mail at least 30 but not more than 60 days
before the redemption date to each Holder of Notes 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
surrender for cancellation of the original Note. On and after
the redemption date, interest will cease to accrue on Notes
or portions thereof called for redemption unless the Company
defaults in the payment of the redemption price.
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant
to Section 4.12 or 4.13 of the Indenture, check the appropriate
box:
Section 4.12 ___
Section 4.13 ___
If you wish to have a portion of this Note purchased by the
Company pursuant to Section 4.12 or 4.13 of the Indenture, state
the amount:
$__________________
Date:___________ Your Signature: ________________________________
Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ______________________________________
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we)
assign and transfer this Note to
_________________________________________________________________
(insert assignee's soc. sec. or tax I.D. no.)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint
_________________________________________________________________
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
_________________________________________________________________
Date:____________ Your signature _______________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee:
SENIOR SUBORDINATED GUARANTEE
For value received, the undersigned hereby unconditionally
guarantees to the Holder of this Note the payments of principal
of, premium, if any, and interest on this Note in the amounts and
at the time when due and interest on the overdue principal,
premium, if any, and interest, if any, of this Note, if lawful,
and the payment or performance of all other obligations of the
Company under the Indenture or the Notes, to the Holder of this
Note and the Trustee, all in accordance with and subject to
the terms and limitations of this Note, Article Ten of the
Indenture and this Guarantee. This Guarantee will become
effective in accordance with Article Ten of the Indenture and
its terms shall be evidenced therein. The validity and
enforceability of any Guarantee shall not be affected by the fact
that it is not affixed to any particular Note.
The obligations of the undersigned to the Holders of Notes and
to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth in Article Ten of the Indenture and reference
is hereby made to the Indenture for the precise terms of the
Guarantee and all of the other provisions of the Indenture
to which this Guarantee relates. The Indebtedness evidenced by
this Guarantee is, to the extent and in the manner provided in
the Indenture, subordinate and subject in right of payment to the
prior payment in full in cash or cash equivalents of all
Guarantor Senior Indebtedness as defined in the Indenture,
and this Guarantee is issued subject to such provisions. Each
Holder of a Note, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be
necessary to appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided that
such subordination provisions shall cease to affect amounts
deposited in accordance with the defeasance provisions of the
Indenture upon the terms and conditions set forth therein.
This Guarantee is subject to release upon the terms set forth in
the Indenture.
BRENNAN PACKING CO., INC.
CONTINENTAL DELI FOODS, INC.
DOSKOCIL FOOD SERVICE COMPANY, L.L.C.
By: CONTINENTAL DELI FOODS, INC., member-manager
By: RKR-GP, INC., member-manager
SPECIALTY BRANDS, INC.
FBAI INVESTMENTS CORPORATION
KPR HOLDINGS, L.P.
By: RKR-GP, INC., general partner
NATIONAL SERVICE CENTER, INC.
RKR-GP, INC.
By: /s/ Bryant P. Bynum
VICE PRESIDENT
______________________________
FOODBRANDS AMERICA, INC., as Issuer
and
the GUARANTORS as identified herein and
FIRST UNION NATIONAL BANK,
as Trustee
________________________________
FOURTH SUPPLEMENTAL INDENTURE
Dated as of May 15, 1996
_________________________________
$110,000,000
9 3/4% Senior Subordinated Redeemable Securities due 2000
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01. Definitions . . . . . . . . . . . . . . . . . 2
Section 1.02. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . 22
Section 1.03. Rules of Construction . . . . . . . . . . . . 23
ARTICLE TWO
THE SECURITIES
Section 2.01. Forms and Dating. . . . . . . . . . . . . . . 24
Section 2.02. Execution and Authentication. . . . . . . . . 24
Section 2.03. Registrar and Paying Agent. . . . . . . . . . 25
Section 2.04. Paying Agent To Hold Money in Trust . . . . . 26
Section 2.05. Securityholder Lists. . . . . . . . . . . . . 26
Section 2.06. Transfer and Exchange . . . . . . . . . . . . 26
Section 2.07. Replacement Securities. . . . . . . . . . . . 27
Section 2.08. Outstanding Securities. . . . . . . . . . . . 27
Section 2.09. Treasury Securities . . . . . . . . . . . . . 28
Section 2.10. Temporary Securities. . . . . . . . . . . . . 28
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . 28
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . 28
Section 2.13. CUSIP Number. . . . . . . . . . . . . . . . . 29
Section 2.14. Deposit of Moneys . . . . . . . . . . . . . . 29
ARTICLE THREE
REDEMPTION OF SECURITIES
Section 3.01. Notices to the Trustee. . . . . . . . . . . . 29
Section 3.02. Selection of Securities To Be Redeemed. . . . 30
Section 3.03. Notice of Redemption. . . . . . . . . . . . . 30
Section 3.04. Effect of Notice of Redemption. . . . . . . . 31
Section 3.05. Deposit of Redemption Price . . . . . . . . . 31
Section 3.06. Securities Redeemed or Purchased in Part. . . 32
____________________
Note: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
Page
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities . . . . . . . . . . . . 32
Section 4.02. Maintenance of Office or Agency . . . . . . . 32
Section 4.03. Corporate Existence . . . . . . . . . . . . . 33
Section 4.04. Payment of Taxes and Other Claims . . . . . . 33
Section 4.05. Maintenance of Properties; Insurance Books
and Records; Compliance with Law. . . . . . . 33
Section 4.06. Compliance Certificate. . . . . . . . . . . . 34
Section 4.07. SEC Reports . . . . . . . . . . . . . . . . . 35
Section 4.08. [Intentionally omitted] . . . . . . . . . . . 36
Section 4.09. [Intentionally omitted] . . . . . . . . . . . 36
Section 4.10. [Intentionally omitted] . . . . . . . . . . . 36
Section 4.11. [Intentionally omitted] . . . . . . . . . . . 36
Section 4.12. Change of Control Triggering Event. . . . . . 36
Section 4.13. Disposition of Proceeds of Asset Sales. . . . 38
Section 4.14. [Intentionally omitted] . . . . . . . . . . . 41
Section 4.15. [Intentionally omitted] . . . . . . . . . . . 41
Section 4.16. Waiver of Stay, Extension or Usury Laws . . . 41
Section 4.17. Limitation on Guarantees by Restricted
Subsidiaries. . . . . . . . . . . . . . . . . 42
Section 4.18. Limitation on Other Senior Subordinated
Indebtedness. . . . . . . . . . . . . . . . . 43
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc.. . . . . . . . . 43
Section 5.02. Successor Substituted . . . . . . . . . . . . 45
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default . . . . . . . . . . . . . . 45
Section 6.02. Acceleration. . . . . . . . . . . . . . . . . 47
Section 6.03. Other Remedies. . . . . . . . . . . . . . . . 48
Section 6.04. Waiver of Defaults. . . . . . . . . . . . . . 48
Section 6.05. Control by Majority . . . . . . . . . . . . . 49
Section 6.06. Limitation on Suits . . . . . . . . . . . . . 49
____________________
Note: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
Page
Section 6.07. Right of Holders To Receive Payment . . . . . 50
Section 6.08. Collection Suit by Trustee. . . . . . . . . . 50
Section 6.09. Trustee May File Proofs of Claims . . . . . . 50
Section 6.10. Priorities. . . . . . . . . . . . . . . . . . 51
Section 6.11. Undertaking for Costs . . . . . . . . . . . . 51
Section 6.12. Restoration of Rights and Remedies. . . . . . 51
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties. . . . . . . . . . . . . . . . . . . . 52
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . 53
Section 7.03. Individual Rights of Trustee. . . . . . . . . 54
Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . 54
Section 7.05. Notice of Default . . . . . . . . . . . . . . 54
Section 7.06. Money Held in Trust . . . . . . . . . . . . . 55
Section 7.07. Reports by Trustee to Holders . . . . . . . . 55
Section 7.08. Compensation and Indemnity. . . . . . . . . . 55
Section 7.09. Replacement of Trustee. . . . . . . . . . . . 56
Section 7.10. Successor Trustee by Merger, etc. . . . . . . 57
Section 7.11. Eligibility: Disqualification . . . . . . . . 57
Section 7.12. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . 58
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's Obligations. . . 58
Section 8.02. Legal Defeasance and Covenant Defeasance. . . 59
Section 8.03. Application of Trust Money. . . . . . . . . . 64
Section.8.04. Repayment to Company or Guarantors. . . . . . 64
Section 8.05. Reinstatement . . . . . . . . . . . . . . . . 64
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders. . . . . . . . . . 65
Section 9.02. With Consent of Holders . . . . . . . . . . . 66
Section 9.03. Compliance with Trust Indenture Act . . . . . 67
Section 9.04. Revocation and Effect of Consents . . . . . . 67
Section 9.05. Notation on or Exchange of Securities . . . . 68
Section 9.06. Trustee May Sign Amendments, etc. . . . . . . 68
____________________
Note: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
Page
ARTICLE TEN
SUBORDINATION OF SECURITIES
Section 10.01. Securities Subordinate to Senior
Indebtedness . . . . . . . . . . . . . . . . 69
Section 10.02. Payment Over of Proceeds upon Dissolution,
etc. . . . . . . . . . . . . . . . . . . . . 69
Section 10.03. Suspension of Payment When Senior
Indebtedness in Default. . . . . . . . . . . 71
Section 10.04. Trustee's Relation to Senior Indebtedness. . 72
Section 10.05. Subrogation to Rights of Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . 73
Section 10.06. Provisions Solely To Define Relative Rights. 73
Section 10.07. Trustee To Effectuate Subordination. . . . . 74
Section 10.08. No Waiver of Subordination Provisions. . . . 74
Section 10.09. Notice to Trustee. . . . . . . . . . . . . . 75
Section 10.10. Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . . . . . . . . 76
Section 10.11. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's
Rights . . . . . . . . . . . . . . . . . . . 76
Section 10.12. Article Applicable to Paying Agents. . . . . 76
Section 10.13. No Suspension of Remedies. . . . . . . . . . 77
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Trust Indenture Act of 1939. . . . . . . . . 77
Section 11.02. Notices. . . . . . . . . . . . . . . . . . . 77
Section 11.03. Communication by Holders with Other Holder . 78
Section 11.04. Certificate and Opinion as to Conditions
Precedent. . . . . . . . . . . . . . . . . . 78
Section 11.05. Statements Required in Certificate or
Opinion. . . . . . . . . . . . . . . . . . . 79
Section 11.06. Rules by Trustee, Paying Agent, Registrar. . 79
Section 11.07. Governing Law. . . . . . . . . . . . . . . . 79
Section 11.08. No Interpretation of Other Agreements. . . . 80
Section 11.09. No Recourse Against Others . . . . . . . . . 80
Section 11.10. Successors . . . . . . . . . . . . . . . . . 80
Section 11.11. Duplicate Originals. . . . . . . . . . . . . 80
Section 11.12. Separability . . . . . . . . . . . . . . . . 80
Section 11.13. Table of Contents, Headings, etc. . . . . . 80
Section 11.14. Benefits of Indenture. . . . . . . . . . . . 80
____________________
Note: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
Page
ARTICLE TWELVE
GUARANTEE OF SECURITIES
Section 12.01. Guarantee. . . . . . . . . . . . . . . . . . 81
Section 12.02. Execution and Delivery of Guarantee. . . . . 83
Section 12.03. [Intentionally omitted]. . . . . . . . . . . 83
Section 12.04. Guarantee Obligations Subordinated to
Guarantor Senior Indebtedness. . . . . . . . 83
Section 12.05. Payment Over of Proceeds Upon Dissolution,
etc., of a Guarantor . . . . . . . . . . . . 84
Section 12.06. Suspension of Guarantee Obligations When
Guarantor Senior Indebtedness in Default . . 86
Section 12.07. Release of a Guarantor . . . . . . . . . . . 87
Section 12.08. Waiver of Subrogation. . . . . . . . . . . . 87
Section 12.09. Guarantee Provisions Solely to Define
Relative Rights. . . . . . . . . . . . . . . 88
Section 12.10. Trustee to Effectuate Subordination of
Guarantee Obligations. . . . . . . . . . . . 89
Section 12.11. No Waiver of Guarantee Subordination
Provisions . . . . . . . . . . . . . . . . . 89
Section 12.12. Guarantors to Give Notice to Trustee . . . . 90
Section 12.13. Reliance on Judicial Order or Certificate
of Liquidating Agent Regarding Dissolution,
etc., of Guarantors. . . . . . . . . . . . . 91
Section 12.14. Rights of Trustee as a Holder of Guarantor
Senior Indebtedness; Preservation of
Trustee's Rights . . . . . . . . . . . . . . 92
Section 12.15. Article Twelve Applicable to Paying Agents . 92
Section 12.16. No Suspension of Remedies. . . . . . . . . . 92
Section 12.17. Trustee's Relation to Guarantor Senior
Indebtedness . . . . . . . . . . . . . . . . 92
Section 12.18. Subrogation. . . . . . . . . . . . . . . . . 93
SIGNATURES
EXHIBIT A Form of Security
EXHIBIT B Terms of Guaranty
EXHIBIT C Form of Guaranty
____________________
Note: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
FOURTH SUPPLEMENTAL INDENTURE, dated as of May 15,
1996, between FOODBRANDS AMERICA, INC., a corporation
incorporated under the laws of the State of Delaware (the
"Company"), and SPECIALTY BRANDS, Inc., a Delaware corporation,
CONTINENTAL DELI FOODS, INC., a Delaware corporation, NATIONAL
SERVICE CENTER, INC., a Delaware corporation, RKR-GP, INC., a
Delaware corporation, KPR HOLDINGS, L.P., a Delaware limited
partnership, DOSKOCIL FOOD SERVICE COMPANY, L.L.C., an Oklahoma
limited liability company, FBAI INVESTMENTS CORPORATION, an
Oklahoma corporation, and BRENNAN PACKING CO., INC., a Delaware
corporation (individually each a "Guarantor" and collectively the
"Guarantors"), and FIRST UNION NATIONAL BANK, a national banking
association, as trustee (the "Trustee").
WHEREAS, the Company and the Trustee (formerly known as
First Fidelity Bank, National Association, New York) previously
executed and delivered an Indenture dated as of April 28, 1993
providing for the issuance initially of $110,000,000 aggregate
principal amount of the Company's 9 3/4% Senior Subordinated
Redeemable Securities due 2000 (the "Securities"); and
WHEREAS, there were issued under the April 28, 1993
Indenture (the above-referenced indenture and each supplemental
indenture are collectively referred to herein as the
"Indenture"), Securities in the aggregate principal amount of
$110,000,000; and
WHEREAS, Specialty Brands, Inc. (formerly known as
Doskocil Specialty Brands Company and, prior to that,
International Multifoods Foodservice Corp.), Continental Deli
Foods, Inc. (formerly known as Wilson Foods Corporation and
successor in interest to Stoppenbach, Inc.), PAFCO Importing
Company, Inc., National Service Center, Inc. and Wilson Certified
Express, Inc. were made party to the Indenture as Guarantors by
the First Supplemental Indenture dated as of June 1, 1994; and
WHEREAS, pursuant to the Second Supplemental Indenture
dated as of May 16, 1995, the Company as the successor in
interest to Doskocil Companies Incorporated ("Doskocil")
expressly assumed all obligations of Doskocil under the
Indenture; and
WHEREAS, RKR-GP, Inc., KPR Holdings, L.P., Doskocil
Food Service Company, L.L.C., FBAI Investments Corporation, and
Brennan Packing Co., Inc. were made party to the Indenture as
Guarantors by the Third Supplemental Indenture dated as of
December 11, 1995; and
WHEREAS, pursuant to an Offer to Purchase and Consent
Solicitation dated March 29, 1996, the Supplement dated April 24,
1996, to the Offer to Purchase and Consent Solicitation and the
Second Supplement dated May 8, 1996, to the Offer to Purchase and
Consent Solicitation, the Company repurchased Securities in the
aggregate principal amount of $109,566,000 and received the
consent of the holders of such Securities to the amendments
contemplated by this Fourth Supplemental Indenture; and
WHEREAS, each of the Company and the Guarantors desires
by this Fourth Supplemental Indenture to amend and restate the
provisions of the Indenture; and
WHEREAS, the execution and delivery of this Fourth
Supplemental Indenture has been authorized by a resolution of the
Board of Directors of the Company and by a resolution of the
Board of Directors of each of the Guarantors, its general partner
or its members, as applicable; and
WHEREAS, all conditions and requirements necessary to
make this Fourth Supplemental Indenture a valid and binding
instrument in accordance with the terms have been performed, and
the execution and delivery of this Agreement have been in all
respects duly authorized;
THEREFORE, in consideration of the above premises, each
party agrees, for the benefit of the others and for the equal and
equitable benefit of the holders of the Securities as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a person
(a) assumed in connection with an Asset Acquisition from such
person or (b) existing at the time such person becomes a
Subsidiary of any other person.
"Affiliate" means, with respect to any specified
person, any other person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified person.
"Agent" means any Registrar or Paying Agent of the
Securities.
"Airlie Agreement" means the Stockholders Agreement by
and between the Company and The Airlie Group, L.P., dated March
22, 1993.
"Applicable Premium" means, with respect to a Security,
the greater of (i) 1.0% of the then outstanding principal amount
of such Security and (ii) the excess of (A) the present value of
the required interest and principal payments due on such
Security, computed using a discount rate equal to the Treasury
Rate plus 100 basis points, over (B) the then outstanding
principal amount of such Security; provided, however, that in no
event shall the Applicable Premium exceed the amount of the
applicable redemption price upon an optional redemption less
100%, at any time on or after July 15, 1998.
"Asset Acquisition" means (a) an Investment by the
Company or any Subsidiary in any other person pursuant to which
such person shall become a Restricted Subsidiary, or shall be
merged with or into the Company or any Restricted Subsidiary, or
(b) the acquisition by the Company or any Restricted Subsidiary
of the assets of any person which constitute all or substantially
all of the assets of such person or any division or line of
business of such person.
"Asset Sale" means any sale, issuance, conveyance,
transfer, lease or other disposition by the Company or any
Restricted Subsidiary to any person other than the Company or a
Wholly-Owned Restricted Subsidiary, in one or a series of related
transactions, of: (a) any Capital Stock of any Subsidiary; (b)
all or substantially all of the properties and assets of any
division or line of business of the Company or any Restricted
Subsidiary; or (c) any other properties or assets of the Company
or a Restricted Subsidiary (including proprietary brand names,
whether registered or otherwise) other than in the ordinary
course of business. For the purposes of this definition, the
term "Asset Sale" shall not include (i) any sale, issuance,
conveyance, transfer, lease or other disposition of properties or
assets that is governed by the provisions of Article Five, (ii)
sales of Assets Held for Sale or of obsolete equipment, and (iii)
any sale, issuance, conveyance, transfer, lease or other
disposition of properties or assets, whether in one transaction
or a series of related transactions, involving assets with a fair
market value, as determined by the Company, not in excess of
$500,000.
"Asset Sale Offer" shall have the meaning set forth in
Section 4.13(b).
"Asset Sale Offer Price" shall have the meaning set
forth in Section 4.13(b).
"Asset Sale Purchase Date" shall have the meaning set
forth in Section 4.13(b).
"Assets Held for Sale" means the facilities currently
owned by the Company or its Restricted Subsidiaries that are
located at Logansport, Indiana; Clarinda, Iowa; Sedalia,
Missouri; and Birmingham, Alabama.
"Average Life to Stated Maturity" means, with respect
to any Indebtedness, as at any date of determination, the
quotient obtained by dividing (a) the sum of the products of (i)
the number of years from such date to the date or dates of each
successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Indebtedness
multiplied by (ii) the amount of each such principal payment by
(b) the sum of all such principal payments.
"Bank" means any lender or lenders that are parties to
the Credit Agreement from time to time.
"Bank Agent" means Chemical Bank or any successor or
replacement agent under the Credit Agreement.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar federal, state or foreign law for the relief
of debtors.
"Bank Warrants" means the warrants evidencing the right
to purchase shares of Common Stock pursuant to the Warrant
Agreement dated as of October 31, 1991, between the Company and
the banks named therein as in effect on the date hereof.
"Board of Directors" means the board of directors of
the Company or any Guarantor, as the case may be, or any duly
authorized committee of such board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company or any Guarantor, as the case may be, to have been duly
adopted by the Board of Directors of the Company or any Guarantor
or its general partner(s) or member(s), as the case may be, 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, or the
city in which the Trustee has its Corporate Trust Office, are
authorized or obligated by law, regulation or executive order to
close.
"Capital Stock" means, with respect to any person, any
and all shares, interests, participations, rights in or other
equivalents (however designated) of such person's capital stock,
and any rights, (other than debt securities convertible into
capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Capitalized Lease Obligation" means any obligation
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
consistently applied.
"Cash Equivalents" means, at any time: (i) any evidence
of Indebtedness with a maturity of 180 days or less issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is
pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of 180 days or less of any financial
institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less
than $500,000,000; (iii) commercial paper with a maturity of 180
days or less issued by a corporation that is not an Affiliate of
the Company organized under the laws of any state of the United
States or the District of Columbia and rated at least A-1 by S&P
or at least P-1 by Moody's or at least an equivalent rating
category of another nationally recognized securities rating
agency; and (iv) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of the United States
of America or issued by any agency thereof and backed by the full
faith and credit of the United States of America, in each case
maturing within 180 days from the date of acquisition; provided
that the terms of such agreements comply with the guidelines set
forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by
the Comptroller of the Currency on October 31, 1985.
"Change of Control" means the occurrence of any of the
following events: (a) any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a person shall be deemed to have "beneficial ownership" of
all 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; (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
Redeemable Capital Stock) of the surviving or transferee
corporation or (2) cash, securities and other property
in an amount which could be paid by the Company as a Restricted
Payment under the 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), excluding
Permitted Holders, 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; (c) during any
consecutive two-year period, individuals who at the beginning of
such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of
the Company was approved by a vote of 66 2/3% of the directors
then still in office who (i) are entitled to vote to elect
such new director or who are entitled to nominate such director
pursuant to the Company's bylaws, the JLL Agreement or the Airlie
Agreement and (ii) were either directors at the beginning of such
period or persons whose election or nomination for election as
directors was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company
then in office; (d) during any consecutive two-year period
individuals who were Non Investor Directors (as defined below) at
the beginning of such period (together with any new Non Investor
Directors whose election by the Board of Directors of the Company
or whose nomination for election by the stockholders of the
Company was approved by a vote of 66 2/3% of the Non Investor
Directors then still in office who were either Non Investor
Directors at the beginning of such period or persons whose
election or nomination for election as directors was so approved)
cease for any reason to constitute a majority of the Non Investor
Directors then in office; or (e) JLL assigns any of its rights
under Section 4.6 of the JLL Agreement, or any successor
provision, to nominate directors of the Company and at any time
thereafter a majority of the directors of the Company designated
pursuant to the JLL Agreement are persons who were not directors
60 days prior to the date of such assignment or persons whose
election or nomination for election was approved by 66 2/3%
of the Non Investor Directors. For purposes of the foregoing, a
"Non Investor Director" means a director of the Company other
than a director nominated, designated or elected pursuant to the
JLL Agreement or the Airlie Agreement.
"Change of Control Offer" shall have the meaning set
forth in Section 4.12.
"Change of Control Purchase Date" shall have the
meaning set forth in Section 4.12.
"Change of Control Purchase Price" shall have the
meaning set forth in Section 4.12.
"Change of Control Triggering Event" means the
occurrence of both a Change of Control and a Rating Decline.
"Common Stock" means, with respect to any person, any
and all shares, interests or other participations in, and other
equivalents (however designated and whether voting or nonvoting)
of, such person's common stock, whether outstanding at the Issue
Date or issued after the Issue Date, and includes, without
limitation, all series and classes of such common stock.
"Company" means the party named as such in this
Indenture until a successor replaces it pursuant to this
Indenture, and thereafter means such successor.
"Company Common Stock" means the Common Stock, par
value $.01 per share, of the Company.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by any one of
its Chairman of the Board, its Vice-Chairman, its President or a
Vice President, and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidation" means, with respect to any person, the
consolidation of the accounts of such person and each of its
Subsidiaries if and to the extent the accounts of such person and
each of its Subsidiaries would normally be consolidated with
those of such person, all in accordance with GAAP. The term
"consolidated" shall have a meaning correlative to the foregoing.
"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 corporate trust
office of the Trustee at which at any particular time its
corporate trust business shall be principally administered, which
on the date hereof is 123 South Broad Street, 12th Floor,
Philadelphia, Pennsylvania (19109).
"covenant defeasance" shall have the meaning set forth
in Section 8.02(c).
"Credit Agreement" means either the New Credit
Agreement or the Existing Credit Agreement, whichever is in full
force and effect.
"Credit Agreement Obligations" means all monetary
obligations of every nature of the Company or a Restricted
Subsidiary, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters
of credit, fees, expenses and indemnities, from time to time owed
to the lenders, the agent, the co-agents or any collateral agent
under or in respect of the Credit Agreement.
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy
Law.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) all Senior
Indebtedness under the Credit Agreement Obligations and (ii) any
other Senior Indebtedness (or, for purposes of Article Twelve
including the definition of Senior Representative as used
therein, Guarantor Senior Indebtedness) which (a) at the time of
incurrence exceeds $25,000,000 in aggregate principal amount and
(b) is specifically designated by the Company (or, in the case of
Guarantor Senior Indebtedness, by the relevant Guarantor) in the
instrument evidencing such Senior Indebtedness as "Designated
Senior Indebtedness".
"Event of Default" has the meaning set forth in Section
6.01.
"Existing Credit Agreement" means that certain Credit
Agreement dated as of December 11, 1995, as amended by Amendment
No. 1 dated May 9, 1996, among the Company, Chemical Bank as
syndications agent, documentation agent and administrative agent
for the lenders and Citibank, N.A., as managing agent, and the
lenders which are or become parties from time to time thereto,
together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in
each case as such agreement may be amended (including any
amendment and restatement thereof), supplemented or otherwise
modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring
all or any portion of the Indebtedness under such agreement or
any successor or replacement agreement.
"Excess Proceeds" shall have the meaning set forth in
Section 4.13(a).
"GAAP" means generally accepted accounting principles
in the United States set forth in the Statements of Financial
Accounting Standards and Interpretations, Accounting Principles
Board Opinions and AICPA Accounting Research Bulletins which are
applicable as of the Issue Date.
"Guarantee" shall have the meaning set forth in Section
4.17(b).
"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments
for collection in the ordinary course of business), direct or
indirect, in any manner, of any part or all of such obligation
and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
non-performance) of all or any part of such obligation,
including, without limiting the foregoing, the payment of amounts
drawn down by letters of credit.
"Guarantor" means the issuer at any time of a Guarantee
(so long as such Guarantee remains outstanding).
"Guarantor Senior Indebtedness" means the principal of
and premium, if any, and interest on any Indebtedness of a
Guarantor, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing
the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of
payment to the Guarantee of such Guarantor. Without limiting the
generality of the foregoing, "Guarantor Senior Indebtedness"
shall also include the principal of, premium, if any, and
interest (including interest accruing after the filing of a
petition initiating any proceeding under any Bankruptcy
Law, whether or not such interest is an allowable claim in such
proceeding) on, and all other amounts owing in respect of (x) all
Credit Agreement Obligations and Other Designated Senior
Indebtedness Obligations of such Guarantor and (y) all Related
Currency and Interest Rate Protection Obligations of such
Guarantor. Notwithstanding the foregoing, "Guarantor Senior
Indebtedness" shall not include (a) Indebtedness evidenced by the
Guarantee of such Guarantor, (b) Indebtedness that is expressly
subordinate or junior in right of payment to any Guarantor Senior
Indebtedness of such Guarantor, (c) Indebtedness which, when
incurred and without respect to any election under Section
1111(b) of Title 11, United States Code, is by its terms without
recourse to such Guarantor, (d) any repurchase, redemption or
other obligation in respect of Redeemable Capital Stock of such
Guarantor, (e) to the extent it might constitute Indebtedness,
amounts owing for goods, materials or services purchased in the
ordinary course of business or consisting of trade payables or
other current liabilities (other than any current liabilities
owing under the Credit Agreement Obligations or the current
portion of any long-term Indebtedness which would constitute
Guarantor Senior Indebtedness but for the operation of this
clause (e)), (f) to the extent it might constitute Indebtedness,
amounts owed by such Guarantor for compensation to employees or
for services rendered to such Guarantor, (g) to the extent it
might constitute Indebtedness, any liability for federal, state,
local or other taxes owed or owing by such Guarantor, (h)
Indebtedness of such Guarantor to a Subsidiary of such Guarantor
or any other Affiliate of such Guarantor or any of such
Affiliate's Subsidiaries, and (i) that portion of any
Indebtedness of such Guarantor which at the time of issuance is
issued in violation of this Indenture (but, as to any such
Indebtedness, no such violation shall be deemed to exist for
purposes of this clause (i) if the holder(s) of such Indebtedness
or their representative or such Guarantor shall have furnished to
the Trustee an Opinion of Counsel unqualified in all material
respects of independent legal counsel, addressed to the Trustee
(which legal counsel may, as to matters of fact, rely upon an
Officers' Certificate of such Guarantor) to the effect that the
incurrence of such Indebtedness does not violate the provisions
of this Indenture).
"Guarantor Senior Subordinated Note Obligations" means,
with respect to any Guarantee, any amounts payable pursuant to
the terms of such Guarantee or Article Twelve of this Indenture,
including amounts received upon the exercise of right of
rescission or other rights of action (including claims for
damages) or otherwise, to the extent relating to the purchase
price of the Securities or amounts corresponding to such
principal, premium, if any, or interest on the Securities.
"Holder" or "Securityholder" means the person in whose
name a Security is registered on the Registrar's books. Each
Holder of a Security shall also be deemed to hold a Guarantee of
any Guarantor that has agreed to the terms of Article Twelve.
"Indebtedness" means, with respect to any person,
without duplication, (a) all liabilities of such person for
borrowed money or for the deferred purchase price of property or
services, excluding any trade payables and other accrued current
liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or
otherwise, of such person in connection with any letters of
credit, banker's acceptance or other similar credit transaction,
(b) all obligations of such person evidenced by bonds, notes,
debentures or other similar instruments, (c) all indebtedness
created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such
person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade
accounts payable arising in the ordinary course of business, (d)
all Capitalized Lease Obligations of such person, (e) all
Indebtedness referred to in the preceding clauses of other
persons and all dividends of other persons, the payment of which
is secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any
Lien upon property (including, without limitation, accounts and
contract rights) owned by such person, even though such person
has not assumed or become liable for the payment of such
Indebtedness (the amount of such obligations being deemed to be
the lesser of the value of such property or asset or the amount
of the obligation so secured), (f) all guarantees of Indebtedness
referred to in this definition by such person, (g) all Redeemable
Capital Stock valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued
dividends, (h) all obligations under or in respect of currency
exchange contracts and Interest Rate Protection Obligations of
such person and (i) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any liability of the
types referred to in clauses (a) through (h) above. For purposes
hereof: (x) the "maximum fixed repurchase price" of any
Redeemable Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to
be determined pursuant to the Indenture, and if such price is
based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be
determined in good faith by the board of directors of the issuer
of such Redeemable Capital Stock; and (y) Indebtedness is deemed
to be incurred pursuant to a revolving credit facility each time
an advance is made thereunder.
"Indenture" means this Indenture, as amended, modified
or supplemented from time to time, including, without limitation,
any supplemental indenture delivered under Section 4.17.
"Independent Financial Advisor" means a firm (i) which
does not, and whose directors, officers and employees or
Affiliates do not, have a direct or indirect financial interest
in the Company and (ii) which, in the judgment of the Board of
Directors of the Company, is otherwise independent and qualified
to perform the task for which it is to be engaged.
"interest" means, with respect to any Security, the
amount of all interest accruing on such Security, including all
interest accruing subsequent to the occurrence of any events
specified in Section 6.01(i) and (j) or which would have accrued
but for any such event, whether or not such claims are allowable
under applicable law.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities, as set forth therein.
"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.
"Issue Date" means April 28, 1993.
"Investment Grade" means BBB- or higher by S&P and Baa3
or higher by Moody's or the equivalent of such ratings by S&P or
Moody's.
"JLL" means Joseph Littlejohn & Levy Fund, L.P.
"JLL Agreement" means the Stock Purchase Agreement
between JLL and the Company, dated February 16, 1993.
"legal defeasance" shall have the meaning set forth in
Section 8.02(b).
"Lien" means any mortgage, charge, pledge, lien
(statutory or other), security interest, hypothecation,
assignment for security, claim, or preference or priority or
other encumbrance upon or with respect to any property of any
kind. A person shall be deemed to own subject to a Lien any
property which such person 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.
"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 Services, Inc. and
its successors.
"Net Cash Proceeds" means, with respect to any Asset
Sale, the proceeds thereof in the form of cash or Cash
Equivalents, including payments in respect of deferred payment
obligations when received in the form of cash or Cash Equivalents
(except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary) net of
(i) brokerage commissions and other fees and expenses (including,
without limitation, fees and expenses of legal counsel and
investment bankers) related to such Asset Sale, (ii) provisions
for all taxes payable as a result of such Asset Sale, (iii)
amounts required to be paid and which have been paid, or amounts
required to be pledged and which are pledged, to secure
Indebtedness owed, to any person (other than the Company or any
Restricted Subsidiary) owning a beneficial interest in the assets
subject to the Asset Sale (which, in the case of a Lien, is being
pledged to permanently reduce Indebtedness secured by such Lien)
and (iv) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve required
in accordance with GAAP consistently applied against any
liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary, as the case may be, after
such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee.
"New Credit Agreement" means a credit agreement entered
into in anticipation of, or on or after, the Issue Date among the
Company, as borrower, a designated bank, as agent, the co-agents,
if any, and the lenders which are or become parties from time to
time thereto, which initially provides for a New Working Capital
Facility, together with the related documents thereto (including,
without limitation, any guarantee agreements permitted under this
Indenture and security documents), in each case as such agreement
may be amended (including any amendment and restatement thereof),
supplemented or otherwise modified from time to time, including
any agreement extending the maturity of, refinancing, replacing
or otherwise restructuring (including, subject to the covenants
of this Indenture, adding Restricted Subsidiaries as additional
borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement
agreement permitted under this Indenture.
"Non-payment Default" means, for purposes of Article
Ten, any event (other than a Payment Default described in clause
(i) of the definition thereof) the occurrence of which entitles
one or more persons to act to accelerate the maturity of any
Designated Senior Indebtedness.
"Officer" means the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the
Treasurer, the Secretary or the Controller of the Company or a
Guarantor, as the case may be.
"Officers' Certificate" means a certificate signed by
two Officers or by an Officer and an Assistant Treasurer or
Assistant Secretary of the Company or a Guarantor, as the case
may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. Subject to
any express provision hereof, the counsel may be an employee of
or counsel to the Company.
"Other Designated Senior Indebtedness Obligations"
means all monetary obligations of every nature of the Company or
a Restricted Subsidiary, including, without limitation,
obligations to pay principal and interest, reimbursement
obligations under letters of credit, fees, expenses and
indemnities, from time to time owed (by reason of a guarantee or
otherwise) to any holder of Designated Senior Indebtedness in
respect of Designated Senior Indebtedness.
"Paying Agent" has the meaning set forth in Section
2.03, except that, for the purposes of Section 4.12 and 4.13 and
Articles Three and Eight, the Paying Agent shall not be the
Company or a Subsidiary or any of their respective Affiliates.
"Payment Blockage Period" shall have the meaning set
forth in Section 10.03(b).
"Payment Default" means (i) for purposes of Article
Ten, any default in the payment when due (whether at stated
maturity, by acceleration or otherwise) of principal, premium, if
any, or interest on, or of unreimbursed amounts under drawn
letters of credit or fees relating to letters of credit
constituting, any Senior Indebtedness, (ii) for purposes of
Article Twelve, any default in the payment when due (whether at
stated maturity, by acceleration or otherwise) of principal,
premium, if any, or interest on, or of unreimbursed amounts under
drawn letters of credit or fees relating to letters of credit
constituting any Guarantor Senior Indebtedness, or (iii) any
event with respect to the Company which is of a type described in
clauses (a), (b) or (c) of Section 10.02. In addition, for
purposes of Article Twelve, it shall also constitute a Payment
Default with respect to any Guarantor which is also an obligor or
a guarantor in respect of any Senior Indebtedness of the Company
if there shall occur any default in the payment when due (whether
at stated maturity, by acceleration or otherwise) of principal,
premium, if any, or interest on, or of unreimbursed amounts under
drawn letters of credit or fees relating to letters of credit
constituting, such Senior Indebtedness of the Company.
"Permitted Holders" means (i) JLL and its Affiliates
and (ii) any "group" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) comprised solely of JLL and its
Affiliates and The Airlie Group, L.P. and its Affiliates (it
being understood that a "group" that includes any other person
shall not be a Permitted Holder).
"Permitted Junior Securities" means, (i) for purposes
of Article Ten (so long as the effect of any exclusion employing
this definition is not to cause the Securities to be treated in
any case or proceeding or similar event described in clauses (a),
(b) or (c) of Section 10.02 as part of the same class of claims
as the Senior Indebtedness or any class of claims pari passu
with, or senior to, the Senior Indebtedness for purposes of any
payment or distribution) debt or equity securities of the Company
or any successor corporation provided for by a plan of
reorganization or readjustment that are subordinated at least to
the same extent that the Securities are subordinated to the
payment of all Senior Indebtedness; provided that (a) if a new
corporation results from such reorganization or readjustment,
such corporation assumes any Senior Indebtedness not paid in full
in cash or Cash Equivalents in connection with such
reorganization or readjustment and tb) the rights of the holders
of such Senior Indebtedness are not, without the consent of such
holders, altered or impaired by such reorganization or
readjustment, and (ii) for purposes of Article Twelve, any
guarantee by a Guarantor of a Permitted Junior Security of the
Company described in clause (i) above; provided that such
guarantee is subordinated to the payment of all Guarantor Senior
Indebtedness at least to the same extent that the Guarantees are
subordinated to the payment of all Guarantor Senior Indebtedness,
and such guarantee is subject to provisions substantially similar
to those set forth in Section 12.07.
"Permitted Liens" means the following types of Liens:
(a) Liens for taxes, assessments or governmental
charges or claims either (i) not delinquent or (ii) contested in
good faith by appropriate proceedings and as to which the Company
or any of its Restricted Subsidiaries shall have set aside on its
books such reserves as may be required pursuant to GAAP;
(b) Statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made in respect
thereof;
(c) Liens incurred or deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(d) Judgment Liens not giving rise to an Event of
Default;
(e) Easements, rights-of-way, zoning restrictions
and other similar charges or encumbrances in respect of real
property not interfering in any material respect with the
ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries;
(f) Any interest or title of a lessor under any
Capitalized Lease Obligation or operating lease permitted under
this Indenture;
(g) Liens incurred in the ordinary course of
business securing solely Purchase Money Obligations;
(h) 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;
(i) Liens upon specific items of inventory or
other goods and proceeds of any person securing such person's
obligations in respect of bankers' acceptances issued or created
for the account of such person to facilitate the purchase,
shipment, or storage of such inventory or other goods;
(j) Liens securing reimbursement obligations with
respect to commercial letters of credit which encumber documents
and other property relating to such letters of credit and
products and proceeds thereof;
(k) Liens encumbering property or assets under
construction arising from progress or partial payments by a
customer of the Company or its Restricted Subsidiaries relating
to such property or assets;
(l) Liens encumbering deposits made to secure
obligations arising from statutory, regulatory, contractual or
warranty requirements of the Company or any of its Restricted
Subsidiaries, including rights of offset and set-off;
(m) Liens securing Interest Rate Protection
Obligations, which Interest Rate Protection Obligations relate to
indebtedness that is secured by Liens otherwise permitted under
this Indenture; and
(n) Liens representing the interest of a licensee
or sub-licensee in any trademarks of the Company or any
Restricted Subsidiary pursuant to customary licensing or
sub-licensing arrangements in the ordinary course of business.
"person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"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 2.07 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.
"principal" means, with respect to any debt security,
the principal of the security plus, with respect to the
Securities only, the premium, if any, on the security and any
interest on overdue principal.
"Rating Agencies" means (i) S&P, (ii) Moody's or (iii)
if S&P or Moody's or both shall not make a rating of the
Securities publicly available, a nationally recognized securities
rating agency or agencies, as the case may be, selected by the
Company, which shall be substituted for S&P or Moody's or both,
as the case may be.
"Rating Category" means (i) with respect to S&P, 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) the equivalent of any such
category of S&P or Moody's used by another Rating Agency. In
determining whether the rating of the Securities has decreased by
one or more gradations, gradations within Rating Categories (+
and - for S&P; 1, 2 and 3 for Moody's; or the equivalent
gradations for another Rating Agency) shall be taken into account
(e.g., with respect to S&P, a decline in a rating from BB+ to BB,
as well as from BB- to B+, shall 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 that on or within 90 days after
the date of public notice of the occurrence of a Change of
Control or of the intention by the Company to effect a Change of
Control (which period shall be extended so long as the rating of
the Securities is under publicly announced consideration for
possible downgrade by any of the Rating Agencies) the following
shall occur: (a) in the event the Securities are rated by either
Moody's or S&P on the Rating Date as Investment Grade, the rating
of the Securities by both Rating Agencies shall be below
Investment Grade; or (b) in the event the Securities are rated
below Investment Grade by both Rating Agencies on the Rating
Date, the rating of the Securities by either Rating Agency shall
be decreased by one or more gradations (including gradations
within Rating Categories as well as between Rating Categories).
"Redeemable Capital Stock" means any class or series of
Capital Stock that, either by its terms, by the terms of any
security into which it is convertible or exchangeable or by
contract or otherwise, is, or upon the happening of an event or
passage of time would be, required to be redeemed prior to any
Stated Maturity of the Securities or is redeemable at the option
of the holder thereof at any time prior to any Stated Maturity of
the Securities, or, at the option of the holder thereof, is
convertible into or exchangeable for debt securities at any time
prior to any Stated Maturity of the Securities. Notwithstanding
the foregoing, Redeemable Capital Stock shall not include the
Bank Warrants.
"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 the Securities.
"Redemption Price" means, with respect to any Security
to be redeemed, the price fixed for such redemption pursuant to
the terms of this Indenture and the Securities.
"Registrar" shall have the meaning set forth in Section
2.03.
"Related Currency and Interest Rate Protection Obliga-
tions" means all monetary obligations of every nature of the
Company or a Restricted Subsidiary under or in respect of
currency exchange contracts and Interest Rate Protection
Obligations of the Company or such Restricted Subsidiary either
(a) to the extent such monetary obligations relate to Credit
Agreement Obligations or Other Designated Senior Indebtedness
Obligations or (b) to the extent such monetary obligations are
secured by collateral securing Credit Agreement Obligations or
Other Designated Senior Indebtedness Obligations (in either case,
as conclusively evidenced by an Officers' Certificate of the
Company or such Restricted Subsidiary delivered to the Trustee at
the time such obligations are initially incurred by the Company
or such Restricted Subsidiary).
"Replacement Assets" shall have the meaning set forth
in Section 4.13(a).
"Restricted Subsidiary" means any Subsidiary other than
an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation and its
successors.
"SEC" 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.
"Securities" means the securities that are issued under
this Indenture, as amended or supplemented from time to time pur-
suant to this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Securities Exchange Act" or "Exchange Act" means the
Securities Exchange Act of 1934, as amended from time to time.
"Senior Indebtedness" means the principal of and
premium, if any, and interest on any Indebtedness of the Company,
whether outstanding on the Issue Date or thereafter created,
incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that
such Indebtedness shall not be senior in right of payment to the
Securities. Without limiting the generality of the foregoing,
"Senior Indebtedness" shall also include the principal of,
premium, if any, and interest (including interest accruing after
the filing of a petition initiating any proceeding under any
Bankruptcy Law whether or not such interest is an allowable claim
in such proceeding) on, and all other amounts owing in respect of
(i) all Credit Agreement Obligations and Other Designated Senior
Indebtedness Obligations of the Company and (ii) all Related
Currency and Interest Rate Protection Obligations of the Company.
Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (a) Indebtedness evidenced by the Securities, (b)
Indebtedness that is expressly subordinate or junior in
right of payment to any Senior Indebtedness of the Company, (c)
Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Title 11, United States Code,
is by its terms without recourse to the Company, (d) any
repurchase, redemption or other obligation in respect of
Redeemable Capital Stock of the Company, (e) to the extent it
might constitute Indebtedness, amounts owing for goods, materials
or services purchased in the ordinary course of business or
consisting of trade payables or other current liabilities (other
than any current liabilities owing under the Credit Agreement
Obligations or the current portion of any long-term Indebtedness
which would constitute Senior Indebtedness but for the operation
of this clause (e)), (f) to the extent it might constitute
Indebtedness, amounts owed by the Company for compensation to
employees or for services rendered to the Company, (g) to the
extent it might constitute Indebtedness, any liability for
federal, state, local or other taxes owed or owing by the
Company, (h) Indebtedness of the Company to a Subsidiary of the
Company or any other Affiliate of the Company or any of such
Affiliate's Subsidiaries, and (i) that portion of any
Indebtedness of the Company which at the time of issuance is
issued in violation of this Indenture (but, as to any such
Indebtedness, no such violation shall be deemed to exist for
purposes of this clause (i) if the holder(s) of such Indebtedness
or their representative or the Company shall have furnished to
the Trustee an Opinion of Counsel unqualified in all material
respects of independent legal counsel, addressed to the Trustee
(which legal counsel may, as to matters of fact, rely upon
an Officers' Certificate of the Company) to the effect that the
incurrence of such Indebtedness does not violate the provisions
of this Indenture).
"Senior Representative" means the Bank Agent or any
other representatives designated in writing to the Trustee by the
holders of any class or issue of Designated Senior Indebtedness;
provided that, in the absence of a representative of the type
described above, any holder or holders of a majority of the
principal amount outstanding of any class or issue of Designated
Senior Indebtedness may collectively act as Senior Representative
for such class or issue.
"Senior Subordinated Indebtedness" means the Securities
and any other indebtedness, guarantee or obligation of the
Company that specifically provides that such indebtedness,
guarantee or obligation is to rank pari passu with, or is not to
be subordinated to, the Securities and is not subordinated by its
terms to any indebtedness, guarantee or obligation of the Company
which is not Senior Indebtedness.
"Senior Subordinated Note Obligations" means any
principal of, premium, if any, and interest on, and any other
amounts owing in respect of, the Securities payable pursuant to
the terms of the Securities or this Indenture or upon
acceleration of the Securities, including, without limitation,
amounts received upon the exercise of rights of rescission or
other rights of action (including claims for damages) or
otherwise, to the extent relating to the purchase price of the
Securities or amounts corresponding to such principal, premium,
if any, interest on, or other amounts owing with respect to, the
Securities.
"Significant Subsidiary" shall have the same meaning as
in Rule 1.02(v) of Regulation S-X under the Securities Act,
provided that (i) each Guarantor shall in all events be deemed a
Significant Subsidiary and (ii) no Unrestricted Subsidiary shall
be deemed a Significant Subsidiary.
"Stated Maturity" means, when used with respect to any
Security or any installment of interest thereon, the date
specified in such Security as the fixed date on which any
principal of such Security or such installment of interest is due
and payable, and when used with respect to any other Indebtedness
or any installment of interest thereon, means any date specified
in the instrument governing such Indebtedness as the fixed date
on which the principal of such Indebtedness, or such installment
of interest thereon, is due and payable.
"Subordinated Indebtedness" means, with respect to the
Company, Indebtedness of the Company which is expressly
subordinated in right of payment to the Securities or, with
respect to any Guarantor, Indebtedness of such Guarantor which is
expressly subordinated in right of payment to the Guarantee of
such Guarantor.
"Subsidiary" means, with respect to any person, (i) a
corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such person, by one or more
Subsidiaries of such person or by such person and one or more
Subsidiaries of such person and (ii) any other person (other than
a corporation), including, without limitation, a joint venture,
in which such person, one or more Subsidiaries of such person or
such person and one or more Subsidiaries of such person, directly
or indirectly, at the date of determination thereof, has at least
a majority ownership interest entitled to vote in the election of
directors, managers or trustees thereof (or other person
performing similar functions). For purposes of this definition,
any directors' qualifying shares or investments by foreign
nationals mandated by applicable law shall be disregarded in
determining the ownership of a Subsidiary.
"Surviving Entity" shall have the meaning set forth in
Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code Sections 77aaa-77bbbb) as in effect on the date of this
Indenture.
"Treasury Rate" means the yield to maturity at the time
of computation of United States Treasury securities with a
constant maturity (as compiled 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 of the Securities following a Change of
Control (or, if such Statistical Release is no longer published,
any publicly available source of similar market data)) most
nearly equal to the then remaining Average Life to Stated
Maturity of the Securities; provided, however, that if the
Average Life to Stated Maturity 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 Rate 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 to Stated Maturity 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.
"Trustee" means the party named as such in this
Indenture until a successor replaces such party (or any previous
successor) in accordance with the provisions of this Indenture,
and thereafter means such successor.
"Trust Officer" means any officer in the Corporate
Trust Administration of the Trustee or any other officer of the
Trustee customarily performing functions similar to those
performed by any of the above-designated officers and also means,
with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge
of and familiarity with the particular subject.
"Unrestricted Subsidiary" means a Subsidiary designated
as such by the Company (a) no portion of the Indebtedness or any
other obligation (contingent or otherwise) of which (i) is
guaranteed by the Company or any other Subsidiary, (ii) is
recourse to or obligates the Company or any other Subsidiary in
any way or (iii) subjects any property or asset of the Company or
any other Subsidiary, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, (b) which has no
Indebtedness or any other obligation that, if in default in any
respect (including a non-payment default), would permit (upon
notice, lapse of time or both) any holder of any other
Indebtedness to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to
its Stated Maturity, (c) with which the Company or any other
Subsidiary has no contract, agreement, arrangement, understanding
or is subject to an obligation of any kind, whether written or
oral, other than a transaction on terms no less favorable to the
Company or any other Subsidiary than those which might be
obtained at the time from persons who are not Affiliates of the
Company, and (d) with which neither the Company nor any other
Subsidiary has any obligation (other than by the terms of this
Indenture) (i) to.subscribe for additional shares of Capital
Stock or other equity interest therein or (ii) to maintain or
preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve certain levels of operating results;
provided, however, that in no event shall any Guarantor be an
Unrestricted Subsidiary. The Company may designate an
Unrestricted Subsidiary as a Restricted Subsidiary by written
notice to the Trustee under this Indenture; provided, however,
that the Company shall not be permitted to designate any
Unrestricted Subsidiary as a Restricted Subsidiary unless (A)
after giving pro forma effect to such designation, the Company
would be permitted to incur $1.00 of additional Indebtedness
(other than Indebtedness permitted under the second paragraph of
Section 4.08 of this Indenture) and (B) any Indebtedness or Liens
of such Unrestricted Subsidiary would be permitted to be incurred
by such Restricted Subsidiary under this Indenture. A
designation of an Unrestricted Subsidiary as a Restricted
Subsidiary may not thereafter be rescinded.
"U.S. Government Obligations" shall have the meaning
set forth in Section 8.02.
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any
person (irrespective of whether or not, at the time, stock of any
other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
"Wholly-Owned Restricted Subsidiary" means any
Restricted Subsidiary of which 100% of the outstanding Capital
Stock is owned by the Company and/or another Wholly-Owned
Restricted Subsidiary. For purposes of this definition, any
directors' qualifying shares or investments by foreign nationals
mandated by applicable law shall be disregarded in determining
the ownership of a Restricted Subsidiary.
Section 1.02. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities and the
Guarantees, if any;
"indenture security holder" means a Securityholder or
Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee; and
"obligor" on the indenture securities means the Company
and the Guarantors, if any, jointly and severally, or any other
obligor on the Securities or the Guarantees, if any.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule and not otherwise defined herein have the
meanings assigned to them therein.
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) words in the singular include the plural, and
words in the plural include the singular;
(c) "or" is not exclusive;
(d) provisions apply to successive events and transac-
tions;
(e) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP;
(f) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision;
and
(g) all references to $ or dollars shall refer to the
lawful currency of the United States of America.
ARTICLE TWO
THE SECURITIES
Section 2.01. Forms and Dating.
The Securities and the Trustee's certificate of
authentication thereon shall be in substantially the form of
Exhibit A 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 any securities exchange or as may, consistently
herewith, be determined by the Officers executing such
Securities, as evidenced by their execution thereof. The
Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and integral
multiples thereof.
The definitive Securities and the Guarantees, if any,
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 form of the
Securities, annexed hereto as Exhibit A shall constitute, and are
hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.
Section 2.02. Execution and Authentication.
Two Officers shall execute the Securities on behalf of
the Company by either manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or
reproduced on the Securities.
If an Officer whose signature is on a Security no
longer holds that office at the time the Trustee authenticates
the Security or at any time thereafter, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of
authentication on the Security. Such Signature shall be
conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Securities for original
issue in an aggregate principal amount not to exceed $110,000,000
upon receipt of an Officers' Certificate signed by two Officers
of the Company directing the Trustee to authenticate the
Securities and certifying that all conditions precedent to the
issuance of the Securities contained herein have been complied
with. The aggregate principal amount of Securities outstanding
at any time may not exceed $110,000,000, except as provided in
Section 2.07.
With the approval of the Company, the Trustee may
appoint an authenticating agent acceptable to the Company to
authenticate Securities. 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 rights as
the Trustee in any dealings hereunder with the Company or with
any of the Company's Affiliates.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for
exchange (the "Registrar"), an office or agency where Securities
may be presented for payment (the "Paying 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" includes any additional paying agent. Except as
otherwise expressly provided in this Indenture, the Company or
any Affiliate thereof may act as Paying Agent.
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 TIA. 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, Paying Agent or agent for service of notices and
demands, or fails to give the foregoing notice, the Trustee shall
act as such and shall be entitled to appropriate compensation in
accordance with Section 7.08.
The Company initially appoints the Trustee as
Registrar, Paying Agent and agent for service of notices and
demands in connection with the Securities.
Section 2.04. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, or interest on, the Securities
(whether such money has been distributed to it by the Company or
any other obligor on the Securities), and the Company and the
Paying Agent shall notify the Trustee of any default by the
Company (or any other obligor on the Securities) in making any
such payment. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate the money and hold it as a separate
trust fund. The Company at any time may require a Paying Agent
to distribute 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 payment default with respect to the
Securities, upon written request to a Paying Agent, require
such Paying Agent to pay all money held by it to the Trustee and
to account for any funds distributed. Upon doing so, the Paying
Agent (other than an obligor under the Securities or any
Guarantees) shall have no further liability for the money so paid
over to the Trustee.
Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Holders and shall otherwise comply
with TIA Section 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least ten Business
Days before each Interest Payment Date and at such other times as
the Trustee may request in writing a list in such form and as of
such date as the Trustee may reasonably require of the names and
addresses of Holders, which list may be conclusively relied upon
by the Trustee.
Section 2.06. Transfer and Exchange.
When Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal principal
amount of Securities of other authorized denominations, the
Registrar or co-Registrar shall register the transfer or make the
exchange as requested if its requirements for such transaction
are met; provided, however, that the Securities surrendered for
transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Securities at
the Registrar's or co-Registrar's request. No service charge
shall be made for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant
to Sections 2.02, 2.07, 2.10, 3.06, 4.12, 4.13 or 9.05). The
Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Security (i) during a period
beginning at the opening of business 15 days before the mailing
of a notice of redemption of Securities and ending at the close
of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article Three, except
the unredeemed portion of any Security being redeemed in part.
Section 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee
or if the Holder of a Security claims that the Security has been
lost, destroyed or wrongfully taken, the Company shall issue and
the Trustee shall authenticate a replacement Security if the
Trustee's requirements are met. If required by the Trustee or
the Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is replaced.
The Company may charge such Holder for its reasonable,
out-of-pocket expenses in replacing a Security, including
reasonable fees and expenses of counsel. Every replacement
Security is an additional obligation of the Company.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all the
Securities that have been authenticated by the Trustee except
those cancelled by it, those delivered to it for cancellation and
those described in this Section as not outstanding. A Security
does not cease to be outstanding because the Company or any of
their respective Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07
(other than a mutilated Security surrendered for replacement), it
ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant
to Section 2.07.
If on a Redemption Date or a Maturity Date the Paying
Agent (other than the Company or an Affiliate of the Company)
holds cash or U.S. Government Obligations sufficient to pay all
of the principal and interest due on the Securities payable on
that date, and is not prohibited from paying such cash or U.S.
Government Obligations to the Holders of such Securities pursuant
to the terms of this Indenture, then on and after that date such
Securities cease to be outstanding and interest on them shall
cease to accrue.
Section 2.09. Treasury Securities.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or any of
their respective Affiliates shall be disregarded, except that,
for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent,
only Securities that the Trustee knows are so owned shall be
disregarded.
Section 2.10. Temporary Securities.
Until definitive Securities are prepared and ready for
delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Securities
in exchange for temporary Securities. Until such exchange,
temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
Section 2.11. Cancellation.
The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them
for transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no
one else, shall cancel and, at the written direction of the
Company, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation. Subject to Section
2.07, the Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for
cancellation. If the Company shall acquire any of the
Securities, such acquisition shall not operate as a redemp-
tion or satisfaction of the Indebtedness represented by such
Securities unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.
Section 2.12. Defaulted Interest.
If the Company defaults on a payment of interest on the
Securities, it shall pay the defaulted interest, plus (to the
extent permitted by law) any interest payable on the defaulted
interest, in accordance with the terms hereof, to the persons who
are Securityholders on a subsequent special record date, which
date shall be at least five Business Days prior to the payment
date. The Company shall fix such special record date and payment
date in a manner satisfactory to the Trustee. At least 15 days
before such special record date, the Company shall mail to each
Securityholder a notice that states the special record date, the
payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Section 2.13. 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 number in notices of redemption or exchange as a con-
venience 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 of any change in the CUSIP
number.
Section 2.14. Deposit of Moneys.
On or before each Interest Payment Date and Maturity
Date (but in no event later than 10:00 A.M. New York time on such
date), the Company shall deposit with the Trustee or Paying Agent
in immediately available funds money sufficient to make cash
payments, if any, due on such Interest Payment Date or Maturity
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 or Maturity Date, as the case may be.
ARTICLE THREE
REDEMPTION OF SECURITIES
Section 3.01. Notices to the Trustee.
If the Company elects to redeem Securities pursuant to
Paragraphs 4(a) or 4(b) of the Securities, or is obligated to
make a Change of Control Offer or an Asset Sale Offer pursuant to
Sections 4.12 or 4.13 of this Indenture, respectively, it shall
notify the Trustee of the Redemption Date and principal amount of
Securities to be redeemed.
The Company shall notify the Trustee of any redemption,
Change of Control Offer or Asset Sale Offer at least 40 days (or
such shorter period as shall be satisfactory to the Trustee)
before the Redemption Date, Change of Control Purchase Date or
Asset Sale Purchase Date, as the case may be. Such notice shall
include a statement that the redemption, Change of Control Offer
or Asset Sale Offer will comply with the provisions of this
Indenture and the Securities.
Section 3.02. Selection of Securities To Be Redeemed.
If less than all the Securities are to be redeemed, the
particular Securities or portions thereof to be redeemed shall be
selected from the outstanding Securities not previously called
for redemption either (x) in such manner as complies with the
requirements of the principal national securities exchange, if
any, on which the Securities being redeemed are listed, or (y) if
the Securities are not listed on any such exchange, pro rata, by
lot or by such other method as the Trustee considers to be fair
and appropriate. The amounts to be redeemed shall be-equal to
$1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and the
Registrar in writing of the Securities selected for redemption
and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of
Securities shall relate, in the case of any Security redeemed or
to be redeemed only in part, to the portion of the principal
amount of such Security which has been or is to be redeemed.
Section 3.03. Notice of Redemption.
Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities
to be redeemed, at the address of such Holder appearing in the
Security register maintained by the Registrar.
All notices of redemption shall identify the Securities
to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(c) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption
ceases to accrue on and after the Redemption Date, and the only
remaining right of the Holders of such Securities is to receive
payment of the Redemption Price upon surrender to the Paying
Agent of the Securities redeemed;
(d) if any Security is to be redeemed in part, the
portion of the principal amount (equal to $1,000 or any integral
multiple thereof) of such Security to be redeemed, and that on
and after the Redemption Date, upon surrender for cancellation of
such Security to the Paying Agent, a new Security or Securities
in the aggregate principal amount equal to the unredeemed portion
thereof shall be issued without charge to the Securityholder;
(e) that Securities called for redemption must be sur-
rendered to the Paying Agent to collect the Redemption Price and
the name and address of the Paying Agent;
(f) the CUSIP number, if any, relating to such Securi-
ties; and
(g) 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 shall be given by the Company or, at
the Company's written request, by the Trustee in the name and at
the expense of the Company.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called
for redemption become due and payable on the Redemption Date and
at the Redemption Price. Upon surrender to the Paying Agent,
such Securities called for redemption shall be paid at the
Redemption Price plus accrued interest to the Redemption Date,
but interest installments whose maturity is on or prior to such
Redemption Date shall be payable on the relevant Interest Payment
Dates to the Holders of record at the close of business on the
relevant record dates referred to in the Securities.
Section 3.05. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall
deposit with the Paying Agent 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, other than Securities or portions
thereof called for redemption on that date which have been
delivered by the Company to the Trustee for cancellation.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such
Redemption Price, interest on the Securities to be redeemed shall
cease to accrue on and after the applicable Redemption Date,
whether or not such Securities are presented for payment. If any
Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal, premium, if any,
and, to the extent lawful, accrued interest thereon shall, until
paid, bear interest from the Redemption Date at the rate provided
in the Securities.
Section 3.06. Securities Redeemed or Purchased in
Part.
Upon surrender to the Paying Agent of a Security which
is to be redeemed in part, the Company shall execute, any
Guarantor shall guarantee and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a
new Security or Securities (accompanied by a notation of
Guarantee, if any, duly endorsed by any Guarantor), 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.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities.
The Company shall pay, or cause to be paid, the
principal of and interest on the Securities on the dates and in
the manner provided in the Securities and this Indenture. An
installment of principal or interest shall be considered paid on
the date due if the Trustee or Paying Agent (other than the
Company, a Subsidiary of the Company or any Affiliate of any
thereof) holds on that date money designated for and sufficient
to pay the installment and is not prohibited from paying such
money to the Holders of the Securities pursuant to the terms of
this Indenture.
The Company shall pay interest on overdue principal at
the rate and in the manner provided in the Securities; it shall
pay interest on overdue installments of interest at the same rate
and in the same manner, to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan,
The City of New York, an office or agency where Securities may be
surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may
be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the
address of the Trustee as set forth in Section 11.02.
The Company may also from time to time designate one or
more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York, for
such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby initially designates the office of
the Trustee at 520 Madison Avenue, New York, New York 10022, as
such office of the Company in accordance with this Section 4.02.
Section 4.03. Corporate Existence.
Subject to Article Five, the Company shall do or cause
to be done all things necessary to and shall cause each of its
Subsidiaries to, preserve and keep in full force and effect the
corporate or partnership existence and rights (charter and
statutory), licenses and/or franchises of the Company and each of
its Subsidiaries; provided, however, that the Company or any of
its Subsidiaries shall not be required to preserve any such
existence (in the case of Subsidiaries), rights, licenses or
franchises if (x) the Board of Directors of the Company shall
reasonably determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its
Subsidiaries taken as a whole or (y) the loss thereof is not
materially adverse to either the Company and its Subsidiaries
taken as a whole or to the ability of the Company to otherwise
satisfy its obligations hereunder.
Section 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid
or discharged, before any penalty accrues from the failure to so
pay or discharge, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any of
its Subsidiaries or upon the income, profits or property of the
Company or any of its Subsidiaries, and (b) all material lawful
claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged
any such tax, assessment, charge or claim the amount,
applicability or validity of which is being contested in good
faith by appropriate proceedings and for which adequate provision
has been made to the extent required by GAAP or where the failure
to effect such payment or discharge is not adverse in any
material respect to the Holders.
Section 4.05. Maintenance of Properties; Insurance;
Books and Records: Compliance with Law.
(a) The Company shall, and shall cause each of its
Subsidiaries to, cause all properties and assets to be maintained
and kept in good condition, repair and working order (reasonable
wear and tear excepted) and supplied with all necessary
equipment, and shall cause to be made all necessary repairs,
renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct
of its business; provided, however, that nothing in this Section
4.05(a) shall prevent the Company or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its
properties (x) if such discontinuance is, in the judgment of the
Board of Directors of the Company or such Subsidiary, desirable
in the conduct of its business or (y) if such discontinuance or
disposal is not materially adverse to either the Company and its
Subsidiaries taken as a whole or the ability of the Company to
otherwise satisfy its obligations hereunder.
(b) The Company shall, and shall cause each of its
Subsidiaries to, maintain such insurance as may be required by
law (other than with respect to any environmental impairment
liability insurance not commercially available) and such other
insurance to such extent and against such hazards and
liabilities, as is consistent with the Company's past practices
(which may include self-insurance in the same form as is
consistent with the Company's past practices).
(c) The Company shall, and shall cause each of its
Subsidiaries to, keep proper books of record and account, in
which full and correct entries shall be made of all business and
financial transactions of the Company and each Subsidiary and
reflect on its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP
consistently applied to the Company and its Subsidiaries taken as
a whole.
(d) The Company shall and shall cause each of its
Subsidiaries to comply with all statutes, laws, ordinances, or
government rules and regulations to which it is subject,
noncompliance with which would materially adversely affect the
business, earnings, properties, assets or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole.
Section 4.06. Compliance Certificate.
(a) The Company shall deliver to the Trustee within 60
days after the end of each of the Company's first three fiscal
quarters and within 90 days after the end of each of the
Company's fiscal years an Officers' Certificate stating whether
or not the signers know of any Default or Event of Default under
this Indenture by the Company that occurred during such fiscal
period. If they do know of such a Default or Event of Default,
the certificate shall describe any such Default or Event of
Default and its status. The first certificate to be delivered
pursuant to this Section 4.06(a) shall be for the first fiscal
quarter of the Company ending after the Issue Date. The Company
shall also deliver a certificate to the Trustee at least annually
from its principal executive, financial or accounting officer as
to his or her knowledge of the Company's compliance with all
conditions and covenants under this Indenture, such compliance to
be determined without regard to any period of grace or
requirement of notice provided herein.
(b) The Company shall deliver to the Trustee within 90
days after the end of each fiscal year (or 105 days to the extent
that the SEC has granted the Company an extension of the deadline
for the filing of its financial statements with the SEC for such
fiscal period) a written statement by the Company's independent
certified public accountants stating (i) that their audit
examination has included a review of the terms of this Indenture
and the Securities as they relate to accounting matters, and (ii)
whether, in connection with their audit examination, any Default
or Event of Default under this Indenture has come to their
attention and, if such a Default or Event of Default has come to
their attention, specifying the nature and period of existence
thereof; provided, however, that without any restriction as to
the scope of the audit examination, such independent certified
public accountants shall not be liable by reason of any failure
to obtain knowledge of any such Default or Event of Default that
would not be disclosed in the course of an examination of the
consolidated financial statements of the Company and its
Subsidiaries conducted in accordance with generally accepted
auditing standards.
(c) The Company shall deliver to the Trustee as soon
as possible, and in any event within ten days after the Company
becomes aware or should reasonably have become aware of the
occurrence of any Default or Event of Default, an Officers'
Certificate specifying such Default or Event of Default, the
period of existence thereof and what action the Company is taking
or proposes to take with respect thereto.
Section 4.07. SEC Reports.
The Company shall file with the SEC the annual reports,
quarterly reports and the information, documents and other
reports required to be filed with the SEC pursuant to Sections 13
and 15 of the Exchange Act, whether or not the Company has a
class of securities registered under the Exchange Act. In
accordance with the provisions of TIA Section 314(a), the Company
shall file with the Trustee, within 15 days after it files them
with the SEC, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15 of the Exchange Act. The
Company also shall comply with the other provisions of TIA
Section 314(a). In addition, the Company shall file its annual
report to stockholders and any quarterly or other financial
reports furnished by it to stockholders generally with the
Trustee and shall mail such materials, no later than the date
such materials are mailed or made available to the Company's
stockholders, to the Holders at their addresses as set forth in
the register of Securities maintained by the Registrar.
Section 4.08. [Intentionally Omitted.]
Section 4.09. [Intentionally omitted.]
Section 4.10. [Intentionally omitted.]
Section 4.11. [Intentionally omitted.]
Section 4.12. Change of Control Triggering Event.
Upon the occurrence of a Change of Control Triggering
Event, the Company shall be obligated to make an offer to
purchase (a "Change of Control Offer") and shall, subject to the
provisions described below, purchase, on a Business Day (the
"Change of Control Purchase Date") not more than 60 nor less than
30 days following the occurrence of the Change of Control
Triggering Event, all of the then outstanding Securities at a
purchase price (the "Change of Control Purchase Price") equal to
101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the Change of Control Purchase Date. The
Company shall, subject to the provisions described below, be
required to purchase all Securities properly tendered into the
Change of Control Offer and not withdrawn. Prior to the mailing
of the notice to Holders provided for below, the Company shall
have (x) terminated all commitments and repaid in full all
Indebtedness under the Credit Agreement, or offered to terminate
such commitments and repay in full such Indebtedness and have in
fact terminated the commitments of and repaid all Indebtedness of
any lender under the Credit Agreement Obligations who accepts
such offer, or (y) obtained the requisite consents under the
Credit Agreement Obligations to permit the purchase of the
Securities as provided for under this Section 4.12. If a notice
has been mailed when such condition precedent has not been
satisfied, the Company shall have no obligation to (and shall
not) effect the purchase of Securities until such time as such
condition precedent is satisfied. Failure to mail the notice on
the date specified below or to have satisfied the foregoing
condition precedent by the date that the notice is required to be
mailed shall in any event constitute a covenant Default under
Section 6.01(d).
Notice of a Change of Control Offer shall be mailed by
the Company not later than the 30th day after the Change of
Control Triggering Event to the Holders of Securities at their
last registered addresses with a copy to the Trustee and the
Paying Agent. The Change of Control Offer shall remain open from
the time of mailing for at least 20 Business Days and until 5:00
p.m., New York City time, on the Change of Control Purchase 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 4.12 and that all Securities validly
tendered into the Change of Control Offer and not withdrawn shall
be accepted for payment;
(b) the Change of Control 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 Change of Control Purchase Price, any Security
accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control
Purchase Date;
(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 tested telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase, the Security
certificate number (if any) and a statement that such Holder is
withdrawing its election to have such Securities purchased;
(g) that Holders whose Securities are purchased only
in part will be issued Securities 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 SEC pursuant to the Securities Exchange
Act (or, if the Company is not then required to file any such
reports with the SEC, the comparable reports prepared pursuant to
Section 4.07), a description of material developments in the
Company's business, 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 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, including
information regarding the persons acquiring control and such
persons' business plans going forward.
On the Change of Control Purchase Date, the Company
shall (i) accept for payment Securities or portions thereof
validly tendered pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent money, in immediately available
funds, sufficient to pay Change of Control 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 shall promptly mail or deliver to the
Holders of Securities so accepted payment in an amount equal to
the Change of Control Purchase Price, and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of
the Security surrendered. Any Securities not so accepted shall
be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the
Change of Control Offer not later than the first Business Day
following the Change of Control Purchase Date.
The Company shall not be required to make a Change of
Control Offer upon a Change of Control Triggering Event if a
third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements
applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
The Company shall comply, to the extent applicable,
with the requirements of Section 14c-1 of the Securities Exchange
Act, and any other securities laws or regulations in connection
with the repurchase of Securities pursuant to a Change of Control
Offer.
Section 4.13. Disposition of Proceeds of Asset Sales.
(a) The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, make any Asset Sale unless (i)
the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least
equal to the fair market value, as determined in good faith by
the Board of Directors of the Company, of the shares or assets
sold or otherwise disposed of and (ii) at least 85% of such
consideration consists of cash, Cash Equivalents, readily
marketable securities which the Company in good faith expects to
liquidate promptly following such Asset Sale or the assumption of
liabilities (including, in the case of the sale of the Capital
Stock of a Restricted Subsidiary, liabilities of such Restricted
Subsidiary). Net Cash Proceeds of any Asset Sale may be applied
for the following purposes (provided that such Net Cash Proceeds
may be applied for the purpose set forth in the following clause
(B) only to the extent that any Net Cash Proceeds remain after
first being applied for the purpose set forth in the following
clause (A)): (A) to the extent required by the terms of any
Senior Indebtedness, to repay Senior Indebtedness (but only if
the commitments or amounts available to be borrowed under such
Senior Indebtedness are permanently reduced by the amount of
such payment); and (B) to repay any Senior Indebtedness that is
outstanding under a revolving credit facility provided for in the
Credit Agreement (whether or not such payment permanently reduces
the commitments under such facility). To the extent that such
Net Cash Proceeds are not applied as provided in the preceding
sentence, the Company or a Restricted Subsidiary, as the case may
be, may apply the Net Cash Proceeds from such Asset Sale, within
360 days of such Asset Sale, to an investment in properties and
assets that replace the properties and assets that were the
subject of such Asset Sale or in properties and assets that shall
be used in the business of the Company and its Restricted
Subsidiaries existing on the Issue Date or in businesses
reasonably related thereto ("Replacement Assets"), so long as the
Company or such Restricted Subsidiary has notified the Trustee in
writing within 270 days of such Asset Sale that it has determined
to apply the Net Cash Proceeds from such Asset Sale to an
investment in such Replacement Assets. Any Net Cash Proceeds
from any Asset Sale not applied as provided in the preceding two
sentences, within 360 days of such Asset Sale, constitute "Excess
Proceeds."
(b) When the aggregate amount of Excess Proceeds
exceeds $5,000,000, the Company shall make an offer to purchase
(an "Asset Sale Offer"), from all Holders of the Securities, on a
day not more than 40 Business Days thereafter (the "Asset Sale
Purchase Date"), the maximum principal amount (expressed as a
multiple of $1,000) of Securities that may be purchased with the
aggregate Excess Proceeds at a price, payable in cash, equal to
100 of the principal amount of the Securities plus accrued and
unpaid interest, if any, to the purchase date (the "Asset Sale
Offer Price").
(c) Notice of an Asset Sale Offer shall be mailed by
the Company to all Holders of Securities not less than 20
Business Days nor more than 40 Business Days before the Asset
Sale Purchase Date at their last registered address with a copy
to the Trustee and the Paying Agent. The Asset Sale Offer shall
remain open from the time of mailing for at least 20 Business
Days and until at least 5:00 p.m., New York City time, on the
Asset Sale Purchase Date. The notice, which shall govern the
terms of the Asset Sale Offer, shall include such disclosures as
are required by law and shall state:
(1) that the Asset Sale Offer is being made pur-
suant to this Section 4.13;
(2) the Asset Sale Offer Price (including the
amount of accrued interest, if any) for each Security,
the Asset Sale Purchase Date and the date on which the
Asset Sale Offer expires;
(3) that any Security not tendered or accepted
for payment will continue to accrue interest in
accordance with the terms thereof;
(4) that, unless the Company shall default in the
payment of the Asset Sale Offer Price, any Security
accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest after the Asset Sale
Purchase Date;
(5) that Holders electing to have Securities pur-
chased pursuant to an Asset Sale 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 Asset Sale Purchase Date and
must complete any form letter of transmittal proposed
by the Company and acceptable to the Trustee and the
Paying Agent;
(6) that Holders 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 Asset Sale
Purchase Date, a tested telex, facsimile transmission
or letter setting forth the name of the Holder, the
principal amount of Securities the Holder delivered for
purchase, the Security certificate number (if any) and
a statement that such Holder is withdrawing its
election to have such Securities purchased;
(7) that if Securities in a principal amount in
excess of the Holder's pro rata share of the amount of
Excess Proceeds are tendered pursuant to the Asset Sale
Offer, the Company shall purchase Securities on a pro
rata basis among the Securities tendered (with such ad-
justments as may be deemed appropriate by the Company
so that only Securities in denominations of $1,000 or
integral multiples of $1,000 shall be acquired);
(8) that Holders whose Securities are purchased
only in part will be issued new Securities equal in
principal amount to the unpurchased portion of the
Securities surrendered;
(9) the instructions that Holders must follow in
order to tender their Securities; and
(10) information concerning the business of the
Company, the most recent annual and quarterly reports
of the Company filed with the SEC pursuant to the
Securities Exchange Act (or, if the Company is not
required to file any such reports with the Commission,
the comparable reports prepared pursuant to Section
4.07), a description of material developments in the
Company's business, pro forma historical financial
information after giving effect to such Asset Sale and
Asset Sale Offer and information concerning
the circumstances and relevant facts regarding such
Asset Sale and Asset Sale Offer as would be material to
a Holder of the Securities in connection with the
decision of such Holder as to whether or not it
should tender Securities pursuant to the Asset Sale
Offer.
(d) On the Asset Sale Purchase Date, the Company shall
(i) accept for payment, on a pro rata basis, Securities or
portions thereof tendered pursuant to the Asset Sale Offer, (ii)
deposit with the Paying Agent money, in immediately available
funds, in an amount sufficient to pay the Asset Sale Offer 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 shall promptly mail or
deliver to Holders of Securities so accepted payment in an amount
equal to the Asset Sale Offer Price, and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of
the Security surrendered. Any Securities not 80 accepted
shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results
of the Asset Sale Offer not later than the first Business Day
following the Asset Sale Purchase Date. To the extent that the
aggregate principal amount of Securities tendered pursuant to an
offer to purchase is less than the Excess Proceeds, the Company
may use such deficiency for general corporate purposes. Upon
completion of such an offer to purchase, the amount of Excess
Proceeds shall be reset to zero. For purposes of this Section
4.13, the Trustee shall act as Paying Agent.
(e) The Company shall comply, to the extent
applicable, with the requirements of Section 14c-1 of the
Securities Exchange Act, and any other securities laws or
regulations in connection with the repurchase of Securities
pursuant to the Asset Sale Offer.
Section 4.14. [Intentionally omitted.]
Section 4.15. [Intentionally omitted.]
Section 4.16. Waiver of Stay; Extension or Usury Laws.
Each of the Company and the Guarantors, if any,
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 law or other law which would prohibit
or forgive the Company or such Guarantor, as the case may be,
from paying all or any portion of the principal of, premium, if
any, or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which
may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) each of the
Company and the Guarantors, if any, 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 4.17. Limitation on Guarantees by Restricted
Subsidiaries.
(a) At no time before May 15, 1996 shall the Company
permit any Restricted Subsidiary, directly or indirectly, to
assume, guarantee or in any other manner become liable with
respect to any Indebtedness of the Company or any Guarantor,
unless such Restricted Subsidiary is a Guarantor or
simultaneously executes and delivers to the Company and the
Trustee a supplemental indenture to this Indenture providing for
the guarantee of payment of the Securities by such Restricted
Subsidiary pursuant to the terms of Exhibit B hereto.
(b) [Intentionally omitted.]
(c) [Intentionally omitted.]
(d) Notwithstanding anything to the contrary contained
in this Indenture, in the event that a Guarantor is released from
all obligations which pursuant to Section 4.17(a) obligated it to
become a Guarantor, such Guarantor shall be released from all
obligations under its Guarantee. In addition, upon any sale or
disposition (by merger or otherwise) of any Guarantor by the
Company or a Restricted Subsidiary to any person that is not an
Affiliate of the Company or any of its Restricted Subsidiaries
which is otherwise in compliance with the terms of this
Indenture, such Guarantor shall be deemed to be released from all
obligations under its Guarantee; provided, however, that each
such Guarantor is sold or disposed of in accordance with Section
4.13; provided, further, that the foregoing proviso shall not
apply to the sale or disposition of a Guarantor in a foreclosure
to the extent that such proviso would be inconsistent with the
requirements of the Uniform Commercial Code.
Section 4.18. Limitation on Other Senior Subordinated
Indebtedness.
The Company shall not issue, directly or indirectly,
any Indebtedness which is subordinate or junior in ranking in any
respect to Senior Indebtedness unless such Indebtedness is Senior
Subordinated Indebtedness or is expressly subordinated in right
of payment to Senior Subordinated Indebtedness.
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc.
(a) The Company shall not, in any transaction or
series of transactions, merge or consolidate with or into, or
sell, assign, convey, transfer, lease or otherwise dispose of all
or substantially all of its properties and assets as an entirety
to, any person or persons, and the Company shall not permit any
of its Restricted Subsidiaries to enter into any such transaction
or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale,
assignment, conveyance, transfer, lease or other disposition of
all or substantially all of the properties and assets of the
Company or of the Company and its Restricted Subsidiaries, taken
as a whole, to any other person or persons, unless at the time
and after giving effect thereto either (i) (A) if the transaction
or transactions is a merger or consolidation involving the
Company, the Company shall be the surviving person of such merger
or consolidation, or (B) if the transaction or transactions is a
merger or consolidation involving a Restricted Subsidiary of the
Company, such Restricted Subsidiary shall be the surviving person
of such merger or consolidation and such surviving person shall
be a Restricted Subsidiary of the Company, or (ii) (A) the person
formed by such consolidation or into which the Company or such
Restricted Subsidiary is merged or to which the properties
and assets of the Company or such Restricted Subsidiary, as the
case may be, substantially as an entirety, are transferred (any
such surviving person or transferee person being the "Surviving
Entity") shall be a corporation organized and existing under the
laws of the United States of America, any state thereof or the
District of Columbia and (B) (1) in the case of a transaction
involving the Company, the Surviving Entity shall expressly
assume by a supplemental indenture executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations
of the Company under the Securities and this Indenture, and in
each case, this Indenture shall remain in full force and effect;
or (2) in the case of a transaction involving a Restricted
Subsidiary that is a Guarantor, the Surviving Entity shall
expressly assume by a supplemental indenture executed and
delivered to the Trustee, in form satisfactory to the Trustee,
all the obligations of such Restricted Subsidiary under its
Guarantee and related supplemental indenture, and in each case,
such Guarantee and supplemental indenture shall remain in full
force and effect.
In connection with any consolidation, merger, transfer,
lease or other disposition contemplated hereby, the Company shall
deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer, lease or other disposition and
the supplemental indenture in respect thereof comply with the
requirements under this Indenture. In addition, each Guarantor,
if any, unless it is the other party to the transaction or unless
its Guarantee will be released and discharged in accordance with
its terms as a result of the transaction, shall be required to
confirm, by supplemental indenture, that its Guarantee of the
Securities will apply to the obligations of the Company or the
Surviving Entity under this Indenture.
(b) A Guarantor shall not, and the Company shall not
permit a Guarantor to, consolidate with or merge with or into any
Person unless:
(i) except in the circumstances where the
Guarantee of the Guarantor is to be released in
accordance with Section 12.07, such Guarantor or, if
the merger or consolidation involves the Company, the
Company shall be the continuing person or the resulting
or surviving person (the "surviving entity") and shall
be a corporation organized and existing under the laws
of the United States or any State thereof or the
District of Columbia;
(ii) except in the circumstances where the
Guarantee of the Guarantor is to be released in
accordance with Section 12.07 or where the Company is
the surviving entity, the surviving entity shall
expressly assume, by a supplemental indenture executed
and delivered to the Trustee, in form and substance
reasonably satisfactory to the Trustee, all of the
obligations of such Guarantor under this Indenture, as
modified by such supplemental indenture, and its
Guarantee; and
(iii) the Company shall have delivered to the
Trustee an Officer's Certificate and an Opinion of
Counsel, each stating that such consolidation or
merger, and if a supplemental indenture is required in
connection with such transaction ar series of
transactions, such supplemental indenture complies with
this Section 5.01(b) and that all conditions precedent
provided for in this Indenture relating to the
transaction or series of transactions have been
satisfied.
Section 5.02. Successor Substituted.
Upon any consolidation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company in
accordance with Section 5.01(a) hereof, the successor person or
persons formed by such consolidation or into which the Company is
merged or the successor person to which such sale, assignment,
conveyance, transfer, lease or other disposition 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
with the same effect as if such successor had been named as the
Company herein; and thereafter, except in the case of (a) a lease
or (b) any sale, assignment, conveyance, transfer, lease or other
disposition to an Affiliate of the Company, the Company shall be
discharged from all obligations and covenants under this
Indenture and the Securities.
ARTICLE SIX
REMEDIES
Section 6.01. Events of Default.
An "Event of Default" means any of the following
events:
(a) default in the payment of the principal of, or
premium, if any, when due and payable, on any of the Securities
(at its Stated Maturity, upon optional redemption, required
purchase, or otherwise);
(b) default in the payment of an installment of
interest on any of the Securities, when due and payable, and such
Default is continuing for 30 days;
(c) the failure by the Company to comply with its
obligations under Article Five;
(d) the failure by the Company to comply with its
obligations under Sections 4.07, 4.12, 4.13 and 4.18, and such
Default continues for a period of 30 days after written notice of
such Default (which notice shall specify the Default, demand that
it be remedied and state that it is a "Notice of Default")
requiring the Company to remedy the same shall have been given
(i) to the Company by the Trustee or (ii) to the Company and the
Trustee by the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding;
(e) the failure by the Company to perform or observe
any other term, covenant or agreement contained in the Securities
or this Indenture (other than a default specified in clause (a),
(b), (c) or (d) of this Section 6.01), and such Default continues
for a period of 60 days after written notice of such Default
(which notice shall specify the Default, demand that it be
remedied and state that it is a "Notice of Default") requiring
the Company to remedy the same shall have been given (i) to the
Company by the Trustee or (ii) to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding;
(f) [Intentionally omitted]
(g) [Intentionally omitted]
(h) any Guarantee ceases to be in full force and
effect or is declared null and void (other than as provided in
Section 4.17(d)), or any Guarantor denies that it has any further
liability under any Guarantee, or gives notice to such effect
(other than by reason of the termination of this Indenture or the
release of any such Guarantee in accordance with Section 12.07)
and such condition shall have continued for a period of 60 days
after written notice of such failure (which notice shall specify
the Default, demand that it be remedied and state that it is a
"Notice of Default") requiring the Guarantor and the Company to
remedy the same shall have been given (i) to the Company by the
Trustee or (ii) to the Company and the Trustee by Holders of at
least 25% in aggregate principal amount of the Securities then
outstanding; or
(i) the Company or any Significant Subsidiary of the
Company, pursuant to or under or within the meaning of any Bank-
ruptcy Law;
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of an order for relief
against it in an involuntary case or proceeding;
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property; or
(iv) makes a general assignment for the benefit of
its creditors; or
(j) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Sig-
nificant Subsidiary of the Company in an involuntary
case or proceeding,
(ii) appoints a Custodian of the Company or any
Significant Subsidiary of the Company for all or
substantially all of its properties, or
(iii) orders the liquidation of the Company or any
Significant Subsidiary of the Company,
and in each case the order or decree remains unstayed and in
effect for 60 days.
Subject to the provisions of Sections 7.01 and 7.02,
the Trustee shall not be charged with knowledge of any Default or
Event of Default (other than those set forth in Section 6.01(a),
(b) or, to the extent relating to Section 4.01, (e)) unless
written notice thereof shall have been given to a Trust Officer
at the Corporate Trust Office of the Trustee by the Company, the
Paying Agent, any Holder, any holder of Senior Indebtedness or
Guarantor Senior Indebtedness or any of their respective agents.
Section 6.02. Acceleration.
If an Event of Default (other than as specified in
Section 6.01(i) or (j) above with respect to the Company or any
Significant Subsidiary) shall occur and be continuing, the
Trustee, by notice to the Company, or the holders of at least 25
in aggregate principal amount of the Securities then outstanding,
by notice to the Trustee and the Company, may declare the
principal of, premium, if any, and accrued interest on all of the
outstanding Securities due and payable immediately, upon which
declaration, all amounts payable in respect of the Securities
shall be immediately due and payable; provided, however, that so
long as the Credit Agreement shall be in full force and effect,
if an Event of Default shall have occurred and be continuing
(other than an Event of Default under clause Section 6.01(i) or
(j) with respect to the Company or any Significant Subsidiary),
any such acceleration shall not be effective until the earlier to
occur of (x) five Business Days following delivery of a notice of
such acceleration to the Bank Agent under the Credit Agreement
and (y) the acceleration of any Indebtedness under the Credit
Agreement. If an Event of Default specified in Section 6.01(i)
or (j) above with respect to the Company or any Significant
Subsidiary occurs and is continuing, then the principal of,
premium, if any, and accrued interest on all of the outstanding
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 Securities.
After a declaration of acceleration in accordance with
this Section 6.02, but before a judgment or decree for payment of
money due has been obtained by the Trustee, the Holders of a ma-
jority in aggregate principal amount of the outstanding
Securities, by written notice to the Company and the Trustee, may
rescind such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee
a sum sufficient to pay:
(1) all sums paid or advanced by the Trustee
under this Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee,
its agents and counsel;
(2) all overdue interest on all Securities;
(3) the principal of and premium, if any, on any
Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at the
rate borne by the Securities; and
(4) to the extent that payment of such interest
is lawful, interest upon overdue interest and overdue
principal at the rate borne by the Securities which has
become due otherwise than by such declaration of
acceleration;
(b) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction; and
(c) all Events of Default, other than the non-payment
of principal of, premium, if any, and interest on the Securities
that has become due solely by such declaration of acceleration,
have been cured or waived.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if
any, or interest on the Securities or to enforce the performance
of any provision of the Securities or this Indenture.
All rights of action and claims under this Indenture or
the Securities may be enforced by the Trustee even if it does not
possess any of the Securities or does not produce any of them in
the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default.
No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
Section 6.04. Waiver of Defaults.
Subject to the provisions of Sections 6.07 and 9.02,
the Holders of not less than a majority in aggregate principal
amount of the outstanding Securities by notice to the Trustee
may, on behalf of the Holders of all the Securities, waive any
existing Default or Event of Default and its consequences, except
a Default or Event of Default specified in Section 6.01(a) or (b)
or in respect of any provision hereof which cannot be modified or
amended without the consent of the Holder so affected pursuant to
Section 9.02. When a Default or Event of Default is so waived,
it shall be deemed cured and shall cease to exist.
Section 6.05. Control by Majority.
The Holders of at least a majority in aggregate
principal amount of the outstanding Securities shall have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee; or exercising
any trust or power conferred on the Trustee; provided, however,
that the Trustee may refuse to follow any direction that (a)
conflicts with any rule of law or this Indenture, (b) the Trustee
determines may be unduly prejudicial to the rights of another
Securityholder, or (c) may expose the Trustee to personal
liability unless the Trustee has indemnification satisfactory to
it in its sole discretion against any loss or expense caused by
its following such direction; and provided, further, that the
Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction.
Section 6.06. Limitation on Suits.
No Holder of any Securities shall have any right to
institute any proceeding or pursue any remedy with respect to
this Indenture or the Securities unless:
(a) the Holder gives written notice to the
Trustee of a continuing Event of Default;
(b) the Holders of at least 25% in principal
aggregate amount of the outstanding Securities make a
written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if
requested, provide to the Trustee reasonable indemnity
satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request
within 15 days after receipt of the request and, if re-
quested, provision of indemnity; and
(e) during such 15-day period the Holders of a
majority in aggregate principal amount of the
outstanding Securities do not give the Trustee a
direction which is inconsistent with the request.
The foregoing limitations shall not apply to a suit
instituted by a Holder for the enforcement of the payment of
principal of, premium, if any, or accrued interest on, such
Security held by such Holder on or after the respective due dates
set forth in such Security.
A Holder may not use this Indenture to prejudice the
rights of any other Holders or to obtain priority or preference
over such other Holders.
Section 6.07. Right of Holders To Receive Payment.
Notwithstanding any other provision in this Indenture,
the right of any Holder of Security to receive payment of the
principal of and interest on such Security, on or after the
respective Stated Maturities expressed in such Security, or to
bring suit for the enforcement of any such payment on or after
the respective Stated Maturities, is absolute and unconditional
and shall not be impaired or affected without the consent of the
Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in clause (a) or (b)
of Section 6.01 occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust
against the Company, any Guarantor or any other obligor on the
Securities for the whole amount of principal of, premium, if any,
and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest,
in each case at the rate per annum borne by the Securities and
such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09. Trustee May File Proofs of Claims.
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders allowed in
any judicial proceedings relative to the Company or the
Restricted Subsidiaries (or any other obligor upon the
Securities), their creditors or their property and shall be
entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial
proceedings is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel, and any other amounts due the
Trustee under Section 7.08. 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 6.10. Priorities.
If the Trustee collects any money pursuant to this
Article Six, it shall pay out such money in the following order:
First: to the Trustee for amounts due under
Section 7.08;
Second: subject to Article Ten and, if
applicable, Article Twelve, 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: subject to Article Ten and, if applicable,
Article Twelve, to Holders for principal amounts
(including any premium) owing under the Securities,
ratably, without preference or priority of any kind,
according to the amounts due and payable on the
Securities for principal (including any premium); and
Fourth: the balance, if any, to the Company or,
to the extent the Trustee collects any amount-from any
Guarantor, to such Guarantor.
The Trustee, upon prior written notice to the Company,
may fix a record date and payment date for any payment to
Security-holders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court may in its
discretion require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to
any suit by the Trustee, any suit by a Holder pursuant to Section
6.07, or a suit by Holders of more than 10% in aggregate
principal amount of the outstanding Securities.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture,
any Security or any Guarantee and such proceeding has been
discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every
such case the Company, each Guarantor, if any, 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.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties.
(a) 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.
(b) Except during the continuance of an Event of
Default:
(i) the Trustee need perform 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;
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions
expressed therein upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture; 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; and
(iii) the Trustee shall have no duty or obligation
to inquire as to the Company's compliance with its
covenants set forth in Article Four (except Sections
4.01, 4.06(a) and (b), and 4.16).
(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;
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error
of judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect
to any action it takes or omits to take in good faith
in accordance with a direction received by it pursuant
to Section 6.05.
(d) 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 here-
under or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and
(d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on
any assets received by it except as the Trustee may agree with
the Company. Assets held in trust by the Trustee need not be
segregated from other assets except to the extent required by
law.
Section 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed
by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document;
(b) before the Trustee acts or refrains from act-
ing, it may consult with counsel and may require an
Officers' Certificate or an Opinion of Counsel or both,
which shall conform to Sections 11.04 and 11.05. The
Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such
Officer's Certificate or Opinion of Counsel;
(c) the Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct
or negligence of any Agent appointed with due care;
(d) 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;
(e) the Trustee may consult with counsel of its
own choosing and the advice or opinion of such counsel
as to matters of law shall be full and complete
authorization and protection in respect of any action
taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of
such counsel;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order,
bond, debenture, or other paper or document, but the
Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as
it may see fit; and
(g) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request, order or direction of
any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be
incurred therein or thereby.
Section 7.03. Individual Rights of Trustee.
The Trustee, any Paying Agent, Registrar or any other
agent of the Company, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to
Sections 7.11 and 7.12 and TIA Sections 310 and 311, may
otherwise deal with the Company and its Subsidiaries with the
same rights it would have if it were not the Trustee, Paying
Agent, Registrar or such other agent.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities or of any
Guarantee, it shall not be accountable for the Company's use or
application of the proceeds from the Securities, it shall not be
responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be
responsible for any statement in the Securities other than the
Trustee's certificate of authentication.
Section 7.05. Notice of Default.
If a Default or an Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall
mail to each Holder notice of the Default or Event of Default
within 60 days thereafter; provided, however, that, except in the
case of a Default in the payment of the principal of or interest
on any Security, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the
executive committee of the board of directors or a committee of
the directors of the Trustee and/or a committee of Trust Officers
in good faith determines that the withholding of such notice is
in the interest of the Holders.
Section 7.06. 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 7.07. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May
15 following the date of this Indenture, the Trustee shall, to
the extent that any of the events described in TIA Section 313(a)
occurred within the previous twelve months, but not otherwise,
mail to each Holder a brief report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply
with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be mailed to the Company and filed with the SEC and
each securities exchange, if any, on which the Securities are
listed.
The Company shall notify the Trustee in writing if the
Securities become listed on any securities exchange.
Section 7.08. Compensation and Indemnity.
The Company covenants and agrees to pay the Trustee
from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compen-
sation of a trustee of an express trust. The Company shall reim-
burse the Trustee upon request for all reasonable disbursements,
expenses and advances incurred or made by it. Such expenses
shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold
it harmless against, any loss or liability incurred by it arising
out of or in connection with the administration of this trust and
its rights or duties hereunder, including the costs and expenses
of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any
claim asserted against the Trustee for which it may seek
indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and
expenses of such counsel. The Company need not pay for any
settlement made without its written consent. The Company need
not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this
Section 7.08, the Trustee shall have a Lien prior to the
Securities on all assets held or collected by the Trustee, in its
capacity as Trustee, except assets held in trust to pay principal
of, premium, if any, or interest on particular Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 6.01(i)
or (j) with respect to the Company or a Significant Subsidiary,
the expenses and the compensation for the services are intended
to constitute expenses of administration under any Bankruptcy
Law.
The Company's obligations under this Section 7.08 and
any Lien arising hereunder shall survive the resignation or
removal of any trustee, the discharge of the Company's
obligations pursuant to Article Eight and/or the termination of
this Indenture.
Section 7.09. Replacement of Trustee.
The Trustee may resign by so notifying the Company.
The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and
the Trustee and may appoint a successor trustee with the
Company's consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section
7.11;
(b) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law;
(c) a receiver or other public officer takes
charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall
notify each Holder of such event and shall promptly appoint a
successor Trustee. The Trustee shall be entitled to payment of
its fees and reimbursement of its expenses while acting as
Trustee, and to the extent such amounts remain unpaid, the
Trustee that has resigned or has been removed shall retain the
Lien afforded by Section 7.08. Within one year after the
successor Trustee takes office, the Holders of a majority
in-principal amount of the outstanding Securities may appoint a
successor Trustee to replace the successor Trustee appointed by
the Company.
A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.
Immediately after that, the retiring Trustee shall transfer all
property held by it as Trustee to the successor Trustee, subject
to the Lien provided in Section 7.08, the resignation or removal
of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company or the Holders of at least 10% in
principal amount of the outstanding Securities may petition any
court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.11, any
Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee.
Notwithstanding replacement of the Trustee pursuant to
this Section 7.09, the Company's obligations under Section 7.08
shall continue for the benefit of the retiring Trustee.
Section 7.10. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation
or national banking association without any further act shall, if
such resulting, surviving or transferee corporation or national
banking association is otherwise eligible hereunder, be the
successor Trustee.
Section 7.11. Eligibility: Disqualification.
There shall at all times be a Trustee hereunder which
shall be eligible to act as Trustee under TIA Sections 310(a)(1)
and 310(a)(5) and which shall either (i) have a combined capital
and surplus of at least $50,000,000, or (ii) have a combined
capital and surplus of at least $25,000,000 and be the subsidiary
of a bank or bank holding company having a combined capital and
surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.12. Preferential Collection of Claims
Against Company.
The Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b).
If the present or any future Trustee shall resign or be removed,
it shall be subject to TIA Section 311(a) to the extent provided
therein.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's
Obligations.
The Company may terminate its obligations under the
Securities and this Indenture, and the obligations of any
Guarantor shall terminate, except those obligations referred to
in the penultimate paragraph of this Section 8.01, if the events
described in clause (a) or (b) below shall have occurred and, in
either such case, the further conditions specified in clauses
(c), (d) and (e) below shall have been satisfied:
(a) all Securities previously authenticated and
delivered (other than destroyed, lost or stolen Securities which
have been replaced or paid or Securities for whose payment money
has theretofore been deposited with the Trustee or the Paying
Agent in trust or segregated and held in trust by the Company and
thereafter repaid to the Company, as provided in Section 8.04)
have been delivered to the Trustee for cancellation; or
(b)(1) either (x) pursuant to Article Three, the
Company shall have given notice to the Trustee and mailed a
notice of redemption to each Holder of the redemption of all of
the Securities under arrangements satisfactory to the Trustee for
the giving of such notice or (y) all Securities not theretofore
delivered to the Trustee for cancellation have otherwise become
due and payable hereunder; and (2) the Company shall have
irrevocably deposited or caused to be deposited with the Trustee
or a trustee satisfactory to the Trustee, under the terms of an
irrevocable trust agreement in form and substance satisfactory to
the Trustee, as trust funds in trust solely for the benefit of
the Holders for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such
interest, to pay principal of, premium, if any, and interest on
the outstanding Securities to maturity or redemption; provided
that the Trustee shall have been irrevocably instructed to apply
such money to the payment of said principal, premium, if any, and
interest with respect to the Securities; and provided, further,
that from and after the time of deposit, the money deposited
shall not be subject to the rights of holders of Senior
Indebtedness pursuant to the provisions of Articles Ten and
Twelve; and
(c) no Default or Event of Default with respect to
this Indenture or the Securities shall have occurred and be
continuing on the date of such deposit or shall occur as a result
of such deposit and such deposit shall not result in a breach or
violation of, or constitute a default under, any other instrument
to which the Company is a party or by which it is bound; and
(d) the Company shall have paid all other sums payable
by it hereunder; and
(e) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent providing for the satisfaction and
discharge of the Company's and any Guarantor's obligation under
the Securities, this Indenture and, in the case of a Guarantor,
its Guarantee have been complied with, which Opinion of Counsel
shall also state that such satisfaction and discharge does not
result in a default under the Credit Agreement (if then in
effect) or any other agreement or instrument then known to such
counsel that binds or affects the Company.
Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02 and
7.08 and any Guarantor's obligations in respect thereof shall
survive until the Securities are no longer outstanding pursuant
to the last paragraph of Section 2.08. After the Securities are
no longer outstanding, the Company's obligations in Sections
7.08, 8.04 and 8.05 and any Guarantor's obligations in respect
thereof shall survive.
After such delivery or irrevocable deposit the Trustee
upon request shall acknowledge in writing the discharge of the
Company's and any Guarantor's obligations under the Securities
and this Indenture except for those surviving obligations
specified above.
Section 8.02. Legal Defeasance and Covenant
Defeasance.
(a) The Company may, at its option by Board Resolution
of the Company, at any time, with respect to the Securities,
elect to have either paragraph (b) or paragraph (c) below be
applied to the outstanding Securities upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of
the option applicable to this paragraph (b), the Company and any
Guarantor shall be deemed to have been released and discharged
from its obligations with respect to the outstanding Securities
on the date the conditions set forth below are satisfied
(hereinafter, "legal defeasance"). For this purpose, such legal
defeasance means that the Company shall be deemed to have paid
and discharged the entire Indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of paragraph (e) below and
the other Sections of and matters under this Indenture referred
to in clauses (i) and (ii) of this paragraph, 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, shall execute proper
instruments acknowledging the same), and Holders of the
Securities and the Guarantees and any amounts deposited under
paragraph (d) below shall cease to be subject to any obligations
to, or the rights of, any holder of Senior Indebtedness or
Guarantor Senior Indebtedness under Article Ten, Article Twelve
or otherwise, except for the following, which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Securities to receive, solely from the
trust fund described in paragraph (d) below and as more fully set
forth in such paragraph, payments in respect of the principal of,
premium, if any, and interest on such Securities when such
payments are due; (ii) the Company's obligations with respect to
such Securities under Sections 2.06, 2.07 and 4.02 and, with
respect to the Trustee, under Section 7.08 and any Guarantor's
obligations in respect thereof; (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder; and (iv) this
Section 8.02 and Section 8.05. Subject to compliance with this
Section 8.02, the Company may exercise its option under this
paragraph (b) notwithstanding the prior exercise of its option
under paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of
the option applicable to this paragraph (c), the Company shall be
released and discharged from its obligations under any covenant
contained in Articles Five and Ten and in Sections 4.05 through
4.15 and 4.17 and 4.18 with respect to the outstanding Securities
on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the
Securities shall thereafter be deemed to be not "outstanding" for
the purpose 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 and Holders of the
Securities and the Guarantees and any amounts deposited under
paragraph (d) below shall cease to be subject to any obligations
to, or the rights of, any holder of Senior Indebtedness or
Guarantor Senior Indebtedness under Article Ten, Article Twelve
or otherwise. For this purpose, such covenant defeasance means
that, with respect to the outstanding Securities, the Company and
any Guarantor may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein
or in any other document, and such omission to comply shall not
constitute a Default or an Event of Default under Section
6.01(c), (d) and (e); provided, however, that, except as
specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to the
outstanding Securities:
(1) the Company shall irrevocably have deposited
or caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 7.11 who
shall agree to comply with the provisions of this
Section 8.02 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, (x) money in an amount or (y) direct
non-callable obligations of, or non-callable
obligations guaranteed by, the United States of America
for the payment of which guarantee or obligation the
full faith and credit of the United States is pledged
("U.S. Government Obligations) maturing as to
principal, premium, if any, and interest in such
amounts of money and at such times as are sufficient
without consideration of any reinvestment of such
interest, to pay principal of and interest on the
outstanding Securities not later than one day before
the due date of any payment, or (z) a combination
thereof 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 principal of, premium, if any, and
interest on the outstanding Securities on the Maturity
Date or otherwise in accordance with the terms of this
Indenture and of such Securities; provided, however,
that the Trustee (or other qualifying trustee) shall
have received an irrevocable written order from the
Company instructing the Trustee (or other qualifying
trustee) to apply such money or the proceeds of such
U.S. Government Obligations to said payments with
respect to the Securities;
(2) in the case of an election under paragraph
(b) above, 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 of this Indenture, there has been a change in
the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain
or loss for Federal income tax purposes as a result of
such legal 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
legal defeasance had not occurred;
(3) in the case of an election under paragraph
(c) above, 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;
(4) no Default or Event of Default or event which
with notice or lapse of time or both would become a De-
fault or an Event of Default with respect to the
Securities shall have occurred and be continuing on the
date of such deposit or, insofar as Section 6.01(a) is
concerned, at any time during the period ending on the
91st day after the date of such deposit (it being
understood that this condition shall not be deemed
satisfied until the expiration of such period);
(5) such legal defeasance or covenant defeasance
shall not cause the Trustee to have a conflicting
interest with respect to any Securities of the Company
or any Guarantor;
(6) such legal defeasance or covenant defeasance
shall not result in a breach or violation of, or
constitute a Default or Event of Default under, this
Indenture or any other material agreement or instrument
to which the Company or any Guarantor is a party or by
which it is bound;
(7) the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that (x)
the trust funds will not be subject to any rights of
any holders of Senior Indebtedness of the Company,
including, without limitation, rights arising under
this Indenture, and (y) after the 91st day following
the deposit, the trust funds will not be subject to the
effect of any applicable Bankruptcy Law; provided,
however, that if a court were to rule under any such
law in any case or proceeding that the trust funds
remained property of the Company, no opinion needs to
be given as to the effect of such laws on the trust
funds except the following: (A) assuming such trust
funds remained in the Trustee's possession prior to
such court ruling to the extent not paid to Holders of
Securities, the Trustee will hold, for the benefit of
the Holders of Securities, a valid and enforceable
security interest in such trust funds that is not
avoidable in bankruptcy or otherwise, subject only to
principles of equitable subordination; (B) the Holders
of Securities will be entitled to receive adequate
protection of their interests in such trust funds if
such trust funds are used; and (C) no property, rights
in property or other interests granted to the Trustee
or the Holders of Securities in exchange for or with
respect to any of such funds will be subject to any
prior rights of any other person, subject only to prior
Liens granted under Section 364 of Title 11 of the U.S.
Bankruptcy Code (or any section of any other Bankruptcy
Law having the same effect), but still subject to the
foregoing clause (B); and
(8) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that (x) all conditions precedent
provided for relating to either the legal defeasance
under paragraph (b) above or the covenant defeasance
under paragraph (c) above, as the case may be, have
been complied with and (y) if any other Indebtedness of
the Company shall then be outstanding or committed,
such legal defeasance or covenant defeasance will not
violate the provisions of the agreements or instruments
evidencing such Indebtedness.
(e) All money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this
paragraph (e), the "Trustee") pursuant to paragraph (d) above in
respect of the outstanding 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 or any Affiliate
of 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.
The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the
U.S. Government Obligations deposited pursuant to paragraph (d)
above 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 outstanding
Securities.
Anything in this Section 8.02 to the contrary notwith-
standing, the Trustee shall deliver or pay to the Company from
time to time upon the request, in writing, by the Company any
money or U.S. Government Obligations held by it as provided in
paragraph (d) above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant
defeasance.
Section 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to Sections
8.01 and 8.02, and shall apply the deposited money and the money
from U.S. Government Obligations in accordance with this
Indenture to the payment of principal of, premium, if any, and
interest on the Securities.
Section 8.04. Repayment to Company or Guarantors.
Subject to Sections 7.08, 8.01 and 8.02, the Trustee
shall promptly pay to the Company, or if deposited with the
Trustee by any Guarantor, to such Guarantor, upon receipt by the
Trustee of an Officers' Certificate, any excess money, determined
in accordance with Section 8.02, held by it at any time. The
Trustee and the Paying Agent shall pay to the Company or any
Guarantor, as the case may be, upon receipt by the Trustee or the
Paying Agent, as the case may be, of an Officers' Certificate,
any money held by it for the payment of principal, premium, if
any, or interest that remains unclaimed for two years after
payment to the Holders is required; provided, however, that the
Trustee and the Paying Agent before being required to make any
payment may, but need not, at the expense of the Company cause to
be published once in a newspaper of general circulation in The
City of New York or mail to each Holder entitled to such money
notice that such money remains unclaimed and that after a date
specified therein, which shall be at least 30 days from the date
of such publication or mailing, any unclaimed balance of such
money then remaining shall be repaid to the Company. After
payment to the Company or any Guarantor, as the case may be,
Securityholders entitled to money must look solely to the Company
for payment as general creditors unless an applicable abandoned
property law designates another person, and all liability of the
Trustee or Paying Agent with respect to such money shall
thereupon cease.
Section 8.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this
Indenture by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application,
then and only then the Company's and each Guarantor's, if any,
obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had been made
pursuant to this Indenture until such time as the Trustee is
permitted to apply all such money or U.S. Government Obligations
in accordance with this Indenture; provided, however, that if the
Company or the Guarantors, as the case may be, has made any
payment of principal of, premium, if any, or interest on any
Securities because of the reinstatement of its obligations, the
Company or the Guarantors, as the case may be, shall be,
subrogated to the rights of the holders of such Securities
to receive such payment from the money or U.S. Government Obliga-
tions held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
The Company, when authorized by a Board Resolution of
the Company, and the Trustee may amend, waive or supplement this
Indenture (including, at any time, Article Twelve) or the
Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or
inconsistency; provided that such amendment or
supplement does not adversely affect the rights of any
Holder;
(b) to comply with Article Five;
(c) to provide for uncertificated Securities in
addition to certificated Securities;
(d) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this
Indenture under the TIA;
(e) to make any change that would provide any
additional benefit or rights to the Holders or that
does not adversely affect the rights of any Holder; or
(f) to add any Subsidiary as a Guarantor pursuant
to the terms of Article Twelve; provided that the terms
of Sections 12.01 and 12.08 may be modified in the
manner described in the last paragraphs thereof without
the consent of the Holders.
Notwithstanding the above, the Trustee and the Company
may not make any change that adversely affects the legal rights
of any Holders hereunder. The Company shall be required to
deliver to the Trustee an Opinion of Counsel stating that any
such change under this Section 9.01 does not adversely affect the
rights of any Holder.
Section 9.02. With Consent of Holders.
Subject to Section 6.04, the Company when authorized by
a Board Resolution of the Company, and the Trustee may amend this
Indenture or the Securities with the written consent of the
Holders of not less than a majority in aggregate principal amount
of the Securities then outstanding, and the Holders of not less
than a majority in aggregate principal amount of the Securities
then outstanding by written notice to the Trustee may waive
future compliance by the Company or the Guarantors with any
provision of this Indenture, the Securities or the Guarantees.
Notwithstanding the provisions of this Section 9.02,
without the consent of each Holder affected, an amendment or
waiver, including a waiver pursuant to Section 6.04, may not:
(a) reduce the principal amount outstanding of or
extend the fixed maturity of any Security or alter the
redemption provisions with respect thereto;
(b) make the principal of, premium, if any, or
interest on any Security payable in money other than
that stated in the Security;
(c) reduce the percentage in outstanding
aggregate principal amount of Securities the Holders of
which must consent to an amendment, supplement or
waiver of any provision of this Indenture, the
Securities or any Guarantee;
(d) impair the right to institute suit for the
enforcement of any payment on or with respect to the
Securities;
(e) waive a default in the payment of the
principal of, premium, if any, or interest on, or
redemption or an offer to purchase required hereunder
with respect to, any Security;
(f) amend, change or modify the obligation of the
Company to make and consummate a Change of Control
Offer in the event of a Change of Control Triggering
Event or make and consummate the offer with respect to
any Asset Sale or modify any of the provisions or
definitions with respect thereto;
(g) reduce or change the rate or time for payment
of interest on any Security;
(h) modify or change any provision of this Inden-
ture affecting the subordination of the Securities or
any Guarantee in a manner adverse to the Holders;
(i) release any Guarantor from any of its obliga-
tions under its Guarantee or this Indenture other than
in compliance with Section 12.07; or
(j) modify this Section 9.02 or Section 6.04 or
Section 6.07.
Notwithstanding the foregoing, no amendment shall
modify any provision of this Indenture so as to affect adversely
the rights of any holder of Designated Senior Indebtedness or any
holder of Guarantor Senior Indebtedness representing Credit
Agreement Obligations or Other Designated Senior Indebtedness
Obligations or any holder of Related Currency and Interest Rate
Protection Obligations at the time outstanding to the benefits of
subordination under this Indenture and the Securities or any
Guarantee without the consent of such Holder.
It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form of
any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Company shall mail to the
Holders of each Security affected thereby, with a copy to the
Trustee, a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect
the validity of any supplemental indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment of or supplement to this Indenture, the
Securities or any Guarantees shall comply with the TIA as then in
effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effec-
tive, a consent to it by a Holder is a continuing consent by such
Holder and every subsequent Holder of that Security or portion of
that Security that evidences the same debt as the consenting
Holder's Security, even if 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
prior to such amendment, supplement or waiver becoming effective.
Such revocation shall be effective only if the Trustee receives
the notice of revocation before the date the amendment,
supplement or waiver becomes effective. Notwithstanding the
above, nothing in this paragraph shall impair the right of any
Holder under Section 316(b) of the TIA.
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 amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the second and third
sentences of the immediately preceding paragraph, 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 amendment, supplement or waiver or to revoke any consent
previously given, whether or not such persons continue to be
Holders after such record date. Such consent shall be effective
only for actions taken within 90 days after such record date.
After an amendment, supplement or waiver becomes effec-
tive, it shall bind every Holder unless it makes a change
described in any of clauses (a) through (j) of Section 9.02; if
it makes such a change, the amendment, supplement or waiver shall
bind every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's
Security.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms
of a Security, the Company shall direct the Trustee to, and upon
receipt of such direction, the Trustee shall, request the Holder
of the Security to deliver it to the Trustee. The Trustee shall
(in accordance with the specific direction of the Company) place
an appropriate notation on the Security about the changed terms
and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Failure to make the
appropriate notation or issue a new Security shall not affect the
validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee May Sign Amendments etc.
The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article Nine if the amendment,
supplement or waiver does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing or refusing
to sign such amendment, supplement or waiver, the Trustee shall
be entitled to receive, and shall be fully protected in relying
upon an Officers' Certificate and an Opinion of Counsel stating
that the execution of any amendment, supplement or waiver is
authorized or permitted by this Indenture, that it is not
inconsistent herewith and that it will be valid and binding upon
the Company in accordance with its terms.
ARTICLE TEN
SUBORDINATION OF SECURITIES
Section 10.01. Securities Subordinate to Senior
Indebtedness.
The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set
forth in this Article Ten, the Indebtedness represented by the
Securities and the payment of the Senior Subordinated Note
Obligations are hereby expressly made subordinate and subject in
right of payment as provided in this Article to the prior payment
in full in cash or Cash Equivalents of all amounts payable under
all existing and future Senior Indebtedness.
This Article Ten shall constitute a continuing offer to
all persons who, in reliance upon such provisions, become holders
of, or continue to hold Senior Indebtedness; and such provisions
are made for the benefit of the holders of Senior Indebtedness;
and such holders are made obligees hereunder and they or each of
them may enforce such provisions.
Section 10.02. Payment Over of Proceeds upon Dissolu-
tion, etc.
In the event of (a) any insolvency or bankruptcy case
or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding in connection therewith,
relative to the Company or to its assets, or (b) any liquidation,
dissolution or other winding-up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets or liabilities of the Company,
then and in any such event:
(1) all Senior Indebtedness (including, in the
case of Credit Agreement Obligations, Other Designated
Senior Indebtedness Obligations and Related Currency
and Interest Rate Protection Obligations of the
Company, any interest accruing subsequent to the filing
of a petition for bankruptcy at the rate provided for
in the documentation governing such Credit Agreement
Obligations, Other Designated Senior Indebtedness
Obligations or Related Currency and Interest Rate
Protection Obligations of the Company, as the case may
be, whether or not such interest is an allowed claim in
such bankruptcy proceeding) shall be paid in full in
cash or Cash Equivalents before any payment or
distribution of any kind or character, whether in cash,
property or securities (excluding Permitted Junior
Securities of the Company) is made to the Holders
of the Securities on account of Senior Subordinated
Note Obligations; and
(2) any payment or distribution of assets of the
Company of any kind or character, whether in cash,
property or securities (excluding Permitted Junior
Securities of the Company), by set-off or otherwise, to
which the Holders or the Trustee would be entitled but
for the provisions of this Article, shall be paid by
the liquidating trustee or agent or other person making
such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of Senior
Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to
the aggregate amounts remaining unpaid on account of
the Senior Indebtedness held or represented by each, to
the extent necessary to make payment in full in cash or
Cash Equivalents of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment
or distribution to the holders of such Senior
Indebtedness; and
(3) in the event that, notwithstanding the fore-
going provisions of this Section 10.02, the Trustee or
the Holder of any Security shall have received any pay-
ment or distribution of assets of the Company of any
kind or character, whether in cash, property or
securities, in respect of any Senior Subordinated Note
Obligations before all Senior Indebtedness is paid in
full in cash or Cash Equivalents, then and in such
event such payment or distribution (excluding Permitted
Junior Securities of the Company) shall be held in
trust for the holders of Senior Indebtedness and shall
be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other person making payment or
distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Senior
Indebtedness in full in cash or Cash Equivalents, after
giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of
the Company with or into, another person or the liquidation or
dissolution of the Company following the conveyance, transfer or
lease of its properties and assets substantially as an entirety
to another person upon the terms and conditions set forth in
Article Five hereof shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the
benefit of creditors or marshalling of assets and liabilities of
the Company for the purposes of this Article if the person formed
by such consolidation or the surviving entity of such merger or
the person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation, merger,
conveyance, transfer or lease, comply with the conditions set
forth in Article Five.
Section 10.03. Suspension of Payment When Senior In-
debtedness in Default.
(a) Unless Section 10.02 shall be applicable, upon the
occurrence of a Payment Default, no direct or indirect payment or
distribution of any assets of the Company or any Subsidiary of
any kind or character shall be made by or on behalf of the
Company on account of the Senior Subordinated Note Obligations or
on account of the purchase or redemption or other acquisition of
any Senior Subordinated Note Obligations unless and until such
Payment Default shall have been cured or waived or shall have
ceased to exist or such Senior Indebtedness shall have been
discharged or paid in full in cash or Cash Equivalents, after
which, subject to Section 10.02 (if applicable), the Company
shall resume making any and all required payments in respect of
the Securities and the other Senior Subordinated Note
Obligations, including any missed payments.
(b) Unless Section 10.02 shall be applicable, upon (i)
the occurrence of a Non-payment Default and (ii) receipt by the
Trustee from a Senior Representative of written notice of such
occurrence stating that such notice is a "Payment Blockage
Notice" pursuant to Section 10.03(b) of this Indenture, no
payment or distribution of any-assets of the Company of any kind
or character shall be made by or on behalf of the Company on
account of any Senior Subordinated Note Obligations or on account
of the purchase or redemption or other acquisition of Senior
Subordinated Note Obligations for a period (a "Payment Blockage
Period") commencing on the date of receipt by the Trustee of such
notice unless and until the earlier to occur of the following
events (subject to any blockage of payments that may then be in
effect under Section 10.02 or subsection (a) of this Section
10.03): (A) 179 days shall have elapsed since receipt of such
written notice by the Trustee; (B) such Non-payment Default shall
have been cured or waived or shall have ceased to exist (provided
that no other Payment Default or Non-payment Default has occurred
and is then continuing after giving effect to such cure or
waiver); (C) all Designated Senior Indebtedness shall have been
discharged or paid in full in cash or Cash Equivalents; or (D)
such Payment Blockage Period shall have been terminated by
written notice to the Trustee from the Senior Representative
initiating such Payment Blockage Period; after which, subject to
Section 10.02 and 10.03(a) (if applicable), the Company shall
resume making any and all required payments in respect of the
Senior Subordinated Note Obligations, including any missed
payments. Notwithstanding any other provision of this Indenture,
only one Payment Blockage Period may be commenced within any
consecutive 360-day period. No Non-payment Default with respect
to Designated Senior Indebtedness which existed or was continuing
on the date of the commencement of any Payment Blockage Period
shall be, or can be made, the basis for the commencement of a
second Payment Blockage Period, whether or not within a period of
360 consecutive days, unless such default shall have been cured
or waived for a period of not less than 90 consecutive days (it
being acknowledged that any subsequent action, or any breach of
any financial covenant for a period commencing after the date of
commencement of such Payment Blockage Period, that, in either
case, would give rise to a Non-payment Default pursuant to any
provision under which a Non-payment Default previously existed or
was continuing shall constitute a new Non-payment Default for
this purpose; provided that, in the case of a breach of a
particular financial covenant, the Company shall have been in
compliance for at least one full period commencing after the
date of commencement of such Payment Blockage Period). In no
event shall a Payment Blockage Period extend beyond 179 days from
the date of the receipt of the notice referred to in clause (2)
of this Section 10.03(b) and there must be a 181 consecutive day
period in any 360 consecutive day period during which no Payment
Blockage Period is in effect pursuant to this Section 10.03(b).
(c) In the event that, notwithstanding the foregoing,
the Trustee or the Holder of any Security shall have received any
payment prohibited by the foregoing provisions of this Section
10.03, then and in such event such payment shall be held in trust
for the holders of Senior Indebtedness and shall be paid over and
delivered forthwith to the Senior Representatives or as a court
of competent jurisdiction shall direct for application to the
payment of any due and unpaid Senior Indebtedness, to the extent
necessary to pay all such due and unpaid Senior Indebtedness in
cash or Cash Equivalents, after giving effect to any concurrent
payment to or for the holders of Senior Indebtedness.
Section 10.04. Trustee's Relation to Senior Indebted-
ness.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this
Article Ten (and in Article Twelve with respect to any Guarantor
Senior Indebtedness), and no implied covenants or obligations
with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall mistakenly pay over or deliver to
Holders, the Company or any other person moneys or assets to
which any holder of Senior Indebtedness shall be entitled by
virtue of this Article Ten or otherwise.
Section 10.05. Subrogation to Rights of Holders of
Senior Indebtedness.
Upon the payment in full in cash or Cash Equivalents of
all Senior Indebtedness, the Holders of the Securities shall be
subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Senior Indebtedness
until the principal of, premium, if any, and interest on the
Securities shall be paid in full in cash or Cash Equivalents.
For purposes of such subrogation, no payments or distributions to
the holders of Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and
no payments over pursuant to the provisions of this Article to
the holders of Senior Indebtedness by Holders of the Securities
or the Trustee shall, as among the Company, its creditors other
than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
If any payment or distribution to which the Holders
would otherwise have been entitled but for the provisions of this
Article Ten shall have been applied, pursuant to the provisions
of this Article Ten, to the payment of all amounts payable under
the Senior Indebtedness of the Company, then and in such case the
Holders shall be entitled to receive from the holders of such
Senior Indebtedness at the time outstanding any payments or
distributions received by such holders of such Senior
Indebtedness in excess of the amount sufficient to pay all
amounts payable under or in respect of such Senior Indebtedness
in full in cash or Cash Equivalents.
Section 10.06. Provisions Solely To Define Relative
Rights.
The provisions of this Article Ten are and are intended
solely for the purpose of defining the relative rights of the
Holders of the Securities on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing contained in this
Article Ten or elsewhere in this Indenture or in the Securities
is intended to or shall: (a) impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the
Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the
Securities as and when the same shall become due and payable in
accordance with their terms; (b) affect the relative rights
against the Company of the Holders of the Securities and
creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by
applicable law upon a Default or an Event of Default under this
Indenture, subject to the rights, if any, under this Article Ten
of the holders of Senior Indebtedness (i) in any case,
proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company referred to in Section
10.02, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (ii) under the
conditions specified in Section 10.03, to prevent any payment
prohibited by such Section or enforce their rights pursuant
to Section 10.03(c).
The failure to make a payment on account of any Senior
Subordinated Note Obligations by reason of any provision of this
Article Ten shall not be construed as preventing the occurrence
of a Default or an Event of Default hereunder.
Section 10.07. Trustee To Effectuate Subordination.
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination provided in this Article Ten and appoints the
Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company whether in
bankruptcy, insolvency, receivership proceedings, or otherwise,
the timely filing of a claim for the unpaid balance of the
Indebtedness of the Company owing to such Holder in the form
required in such proceedings and the causing of such claim to be
approved. If the Trustee does not file such a claim prior to 30
days before the expiration of the time to file such a claim, the
holders of Senior Indebtedness, or any Senior Representative, may
file such a claim on behalf of Holders of the Securities.
Section 10.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of the Company or by any act or
failure to act by any such holder, or by any non-compliance by
the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a)
of this Section 10.08, the holders of Senior Indebtedness may, at
any time and from time to time, without the consent of or notice
to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and
without impairing or releasing the subordination provided in this
Article Ten or the obligations hereunder of the Holders of the
Securities to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii)
sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness;
(iii) release any person liable in any manner for the collection
or payment of Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other
person; provided, however, that in no event shall any such
actions limit the right of the Holders of the Securities to
take any action to accelerate the maturity of the Securities pur-
suant to Article Six hereof or to pursue any rights or remedies
hereunder or under applicable laws if the taking of such action
does not otherwise violate the terms of this Indenture.
Section 10.09. Notice to Trustee.
(a) The Company shall give prompt written notice to
the Trustee of any fact known to the Company which would prohibit
the making of any payment to or by the Trustee in respect of the
Securities. Notwithstanding the provisions of this Article Ten
or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a Senior
Representative; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of this Section
10.09, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall not
have received the notice provided for in this Section 10.09 at
least two Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose under this
Indenture (including, without limitation, the payment of the
principal of, premium, if any, or interest on any Security),
then, anything herein contained to the contrary notwithstanding
but without limiting the rights and remedies of the holders of
Senior Indebtedness or any trustee, fiduciary or agent thereof,
the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money
was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days
prior to such date; nor shall the Trustee be charged with
knowledge of the curing of any such default or the elimination of
the act or condition preventing any such payment unless and until
the Trustee shall have received an Officers' Certificate to such
effect.
(b) The Trustee shall be entitled to rely on the
delivery to it of a written notice to the Trustee by a person
representing himself to be a Senior Representative to establish
that such notice has been given by a Senior Representative. In
the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a
holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article Ten, the Trustee may
request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such person, the extent to which such person
is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such person under this
Article Ten, and if such evidence is not furnished, the Trustee
may defer any payment to such person pending judicial
determination as to the right of such person to receive such
payment.
Section 10.10. Reliance on Judicial Order or Certifi-
cate of Liquidating Agent.
Upon any payment or distribution of assets of the
Company referred to in this Article Ten, the Trustee and the
Holders shall be entitled to rely conclusively upon any order or
decree entered by any court of competent jurisdiction in which
any insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding-up or similar case or
proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other person making such
payment or distribution, delivered to the Trustee or to the
Holders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of
Senior Indebtedness and other Indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article; provided that the foregoing shall apply only if
such court has been fully apprised of the provisions of, or the
order or decree makes reference to, this Article Ten.
Section 10.11. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's
Rights.
The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Ten with
respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in this
Article Ten shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 7.08.
Section 10.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article Ten in addition to or in
place of the Trustee; provided, however, that Section 10.11 shall
not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as Paying Agent.
Section 10.13. No Suspension of Remedies.
Nothing contained in this Article Ten shall limit the
right of the Trustee or the Holders of Securities to take any
action to accelerate the maturity of the Securities pursuant to
Article Six or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this
Article Ten of the holders, from time to time, of Senior
Indebtedness.
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Trust Indenture Act of 1939.
This Indenture is subject to the provisions of the TIA
that are required to be a part of this Indenture, and shall, to
the extent applicable, be governed by such provisions.
If any provision of this Indenture modifies or excludes
any provision of the TIA that may be so modified or excluded, the
provision of the TIA shall be deemed to apply to this Indenture
as so modified or excluded, as the case may be.
Section 11.02. Notices.
Any notice or communication shall be sufficiently given
if in writing and delivered in person or mailed by first class
mail, postage prepaid, addressed as follows:
If to the Company to:
Foodbrands America, Inc.
1601 N.W. Expressway, Suite 1700
Oklahoma City, OK 73118
Attention: Bryant P. Bynum
If to any Guarantor:
[Insert Guarantor's Name]
1601 N.W. Expressway, Suite 1700
Oklahoma City, OK 73118
Attention: Bryant P. Bynum
With a copy to:
McAfee & Taft A Professional Corporation
10th Fl., Two Leadership Square
211 North Robinson
Oklahoma City, OK 73102
Attention: Brice E. Tarzwell, Esq.
If to the Trustee to:
First Union National Bank
123 South Broad Street, 12th Floor
Philadelphia, Pennsylvania 19109
Attention: Corporate Trust Administration
The parties hereto by notice to the other parties may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed to a Holder,
including any notice delivered in connection with TIA Section
310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section
315(b), shall be mailed by first class mail, postage prepaid, to
such Holder at the address of such Holder as it appears on the
Securities register maintained by the Registrar and shall be
sufficiently given to such Holder if so mailed within the time
prescribed. Copies of any such communication or notice to a
Holder shall also be mailed to the Trustee.
Failure to mail a notice or communication to a Security
holder or any defect in it shall not affect its sufficiency with
respect to other Holders. Except for a notice to the Trustee,
which is deemed given only when received, if a notice or
communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 11.03. Communication by Holders with Other
Holders.
Holders may communicate pursuant to TIA Section 312(b)
with other Holders with respect to their rights under this
Indenture or the Securities. The obligors, the Trustee, the
Registrar and any other person shall have the protection of TIA
Section 312(c).
Section 11.04. Certificate and Opinion as to
Conditions Precedent.
Upon any request or application by the Company or any
Guarantor to the Trustee to take any action under this Indenture,
such obligor shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if
any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent
have been complied with.
Section 11.05. Statements Required in Certificate or
Opinion.
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall
include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condi-
tion;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the
statement or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of such per-
son, he has made such examination or investigation as
is necessary to enable him to express an opinion as to
whether or not such covenant or condition has been com-
plied with; and
(4) a statement as to whether or not, in the
opinion of such person, such condition or covenant has
been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of
public officials.
Section 11.06. Rules by Trustee, Paying Agent, Regis-
trar.
The Trustee may make reasonable rules for action by or
at a meeting of Securityholders. The Paying Agent or Registrar
may make reasonable rules for its functions.
Section 11.07. Governing Law.
The laws of the State of New York shall govern this
Indenture, the Securities and the Guarantees without regard to
principles of conflicts of law. The Trustee, the Company, each
Guarantor, if any, and the Holders agree to submit to the
jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Indenture, the
Securities and the Guarantees.
Section 11.08. No Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company, any Guarantor
or any of their respective Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this
Indenture.
Section 11.09. No Recourse Against Others.
A director, officer, employee, stockholder or
Affiliate, as such, of the Company or any Guarantor shall not
have any liability for any obligations of the Company under the
Securities or this Indenture or for any obligations of a
Guarantor under any Guarantee or for any claim based on, in
respect of or by reason of, such obligations or their creation.
Each Holder by accepting a Security waives and releases all such
liability.
Section 11.10. Successors.
All agreements of the Company and any Guarantor in this
Indenture, the Securities and the Guarantees shall bind their
successors. All agreements of the Trustee in this Indenture
shall bind its successors.
Section 11.11. Duplicate Originals.
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all such
executed copies together represent the same agreement.
Section 11.12. Separability.
In case any provision in this Indenture, the Securities
or any Guarantee 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, and a
Holder shall have no claim therefor against any party hereto.
Section 11.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 11.14. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express
or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under
this Indenture, except as specifically provided in Section 10.01
hereof.
ARTICLE TWELVE
GUARANTEE OF SECURITIES
Section 12.01. Guarantee.
Subject to the provisions of this Article Twelve, each
Guarantor hereby jointly and severally unconditionally guarantees
to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee, irrespective of the validity and en-
forceability of this Indenture, the Securities or the obligations
of the Company or any other Guarantors to the Holders or the
Trustee hereunder or thereunder, that: (a) the principal of,
premium, if any, and interest on the Securities will be duly and
punctually paid in full when due, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal
and (to the extent permitted by law) interest, if any, on the
Securities and all other obligations of the Company or the
Guarantors to the Holders or the Trustee hereunder or thereunder
(including fees, expenses or other) and all other Senior
Subordinated Note Obligations will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of
any Securities or any of such other Senior Subordinated Note
Obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or
otherwise. This Guarantee is a present and continuing guarantee
of payment and performance, and not of collectibility only.
Accordingly, failing payment when due of any amount so
guaranteed, or failing performance of any other obligation of the
Company to the Holders under this Indenture or the Securities,
for whatever reason, each Guarantor shall be obligated to pay, or
to perform or cause the performance of, the same immediately. An
Event of Default under this Indenture or the Securities shall
constitute an event of default under this Guarantee, and shall
entitle the Holders of Securities to accelerate the obligations
of the Guarantors hereunder in the same manner and to the same
extent as the obligations of the Company.
Each of the Guarantors hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Securities or this
Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to
any provisions hereof or thereof, any release of any other
Guarantor, the recovery of any judgment against the Company, any
action to enforce the same, whether or not a Guarantee is affixed
to any particular Security, or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of
a guarantor. Each of the Guarantors hereby waives the benefit of
diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that its
Guarantee will not be discharged except by complete performance
of the obligations contained in the Securities, this Indenture
and this Guarantee. If any Holder or the Trustee is required by
any court or otherwise to return to the Company or to any
Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or such Guarantor, any
amount paid by the Company or such Guarantor to the Trustee or
such Holder, this Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between it, on the one hand,
and the Holders of Securities and the Trustee, on the other hand,
(a) subject to this Article Twelve, the maturity of the
obligations guaranteed hereby may be accelerated as provided in
Article Six hereof for the purposes of this Guarantee, notwith-
standing any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed
hereby, and (b) in the event of any acceleration of such
obligations as provided in Article Six hereof, such obligations
(whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Guarantee.
This Guarantee shall remain in full force and effect
and continue to be effective should any petition be filed by or
against the Company for liquidation or reorganization, should the
Company become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or
any significant part of the Company's assets, and shall, to the
fullest extent permitted by law, continue to be effective or be
reinstated, as the case may be, if at any time payment and
performance of the Securities are, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Securities, whether as a "voidable
preference," "fraudulent transfer" or otherwise, all as though
such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored
or returned, the Securities shall, to the fullest extent
permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or incorpo-
rator, past, present or future, or any Guarantor, as such, shall
have any personal liability under this Guarantee by reason of
his, her or its status as such stockholder, officer, director,
employer or incorporator.
The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the Holders
under this Guarantee.
The Guarantee of any Guarantor, and this Section 12.01
as applicable to any Guarantor, may be modified, without the
consent of the Holders, to reflect such fraudulent conveyance
savings provisions, net worth or maximum amount limitations as to
recourse or similar provisions as are set forth in, and after
giving effect to, any guarantee by such Guarantor of any Credit
Agreement Obligations at the time that the Guarantee hereunder is
first issued and shall thereafter be required to be modified in
the same manner as such guarantee under the Credit Agreement is
thereafter amended or modified; provided that no such amendment
or modification to thereafter conform to the Credit Agreement
shall be in a manner which is adverse to the Holders in any
respect. No modification or amendment referred to in the
preceding sentence shall be permitted if it would disadvantage
the Holders relative to the holders of Credit Agreement
Obligations of such Guarantor other than by operation of the sub-
ordination provisions of this Article Twelve and any Permitted
Liens.
Section 12.02. Execution and Delivery of Guarantee.
The validity and enforceability of any Guarantee shall
not be affected by the fact that it is not affixed to any
particular Security. Each of the Guarantors hereby agrees that
its Guarantee set forth in Section 12.01 shall remain in full
force and effect notwithstanding any failure to endorse on each
Security a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on the
Indenture or a Guarantee no longer holds that office at the time
the Trustee authenticates any Security or at any time thereafter,
such Guarantor's Guarantee of such Security shall be valid
nevertheless.
The delivery of any Guarantee to the Trustee as
required by Section 4.17(a) shall constitute due delivery of such
Guarantee on behalf of the Guarantor to and for the benefit of
all Holders of the Securities.
Section 12.03. [Intentionally omitted]
Section 12.04. Guarantee Obligations Subordinated to
Guarantor Senior Indebtedness.
Each Guarantor covenants and agrees, and each Holder of
a Security, by its acceptance thereof, likewise covenants and
agrees, that all payments pursuant to the Guarantee made by or on
behalf of such Guarantor are hereby expressly made subordinate
and subject in right of payment as provided in this Article
Twelve to the prior payment in full in each or Cash Equivalents
of all amounts payable under all existing and future Guarantor
Senior Indebtedness of such Guarantor.
This Section 12.04 and the following Sections 12.05
through 12.17 of this Article Twelve shall constitute a
continuing offer to all person who, in reliance upon such
provisions, become holders of, or continue to hold, Guarantor
Senior Indebtedness of any Guarantor and, to the extent set forth
in Section 12.06(b), holders of Designated Senior Indebtedness;
and such provisions are made for the benefit of the holders of
Guarantor Senior Indebtedness of each Guarantor and, to the
extent set forth in Section 12.06(b), holders of Designated
Senior Indebtedness; and such holders (to such extent) are made
obligees hereunder and they or each of them may enforce such
provisions.
Section 12.05. Payment Over of Proceeds Upon Dissolu-
tion, etc., of a Guarantor.
In the event of (a) any insolvency or bankruptcy case
or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding in connection therewith,
relative to any Guarantor, as such, or to its assets, or (b) any
liquidation, dissolution or other winding-up of any Guarantor,
whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshalling of assets or liabilities of
any Guarantor, then and in any such event:
(i) all Guarantor Senior Indebtedness of
such Guarantor (including, in the case of
Credit Agreement Obligations, Other Designated
Senior Indebtedness Obligations and Related
Currency and Interest Rate Protection Obliga-
tions of such Guarantor, any interest accruing
subsequent to the filing of a petition for
bankruptcy at the rate provided for in the
documentation governing such Credit Agreement
Obligations, Other Designated Senior Indebted-
ness Obligations or Related Currency and
Interest Rate Protection Obligations or Related
Currency and Interest Rate Protection Obliga-
tions of such Guarantor, as the case may be,
whether or not such interest is an allowed
claim in such bankruptcy proceeding) shall be
paid in full in cash or Cash Equivalents before
any payment or distribution of any kind or
character (excluding Permitted Junior Securi-
ties of such Guarantor), by or on behalf of
such Guarantor, is made to the Holders of the
Securities pursuant to this Guarantee on
account of the Guarantor Senior Subordinated
Note Obligations; and
(ii) any payment or distribution of assets
of such Guarantor of any kind or character,
whether in cash, property or securities (ex-
cluding Permitted Junior Securities of such
Guarantor), by set-off or otherwise, to which
the Holders or the Trustee would be entitled
but for the provisions of this Article Twelve,
shall be paid by the liquidating trustee or
agent or other person making such payment or
distribution, whether a trustee in bankruptcy,
a receiver or liquidating trustee or otherwise,
directly to the holders of Guarantor Senior
Indebtedness of such Guarantor or their repre-
sentative or representatives or to the trustee
or trustees under any indenture under which any
instruments evidencing any of such Guarantor
Senior Indebtedness may have been issued,
ratably according to the aggregate amounts
remaining unpaid on account of such Guarantor
Senior Indebtedness held or represented by
each, to the extent necessary to make payment
in full in cash or Cash Equivalents of all such
Guarantor Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment
or distribution to the holders of such Guar-
antor Senior Indebtedness; and
(iii) in the event that, notwithstanding
the foregoing provisions of this Section 12.05,
the Trustee or the Holder of any Security shall
have received any payment or distribution of
assets of such Guarantor of any kind or charac-
ter, whether in cash, property or securities,
in respect of any Guarantor Senior Subordinated
Note Obligations of such Guarantor under this
Guarantee before all Guarantor Senior Indebted-
ness of such Guarantor is paid in full in cash
or Cash Equivalents or payment thereof is pro-
vided of, then and in such event such payment
or distribution (excluding Permitted Junior
Securities of such Guarantor) shall be held in
trust for the holders of Guarantor Senior In-
debtedness and shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiv-
er, liquidating trustee, custodian, assignee,
agent or other person making payment or distri-
bution of assets of such Guarantor for applica-
tion to the payment of all such Guarantor
Senior Indebtedness remaining unpaid, to the
extent necessary to pay all of such Guarantor
Senior Indebtedness in full in cash or Cash
Equivalents, after giving effect to any concur-
rent payment or distribution to or for the
holders of such Guarantor Senior Indebtedness.
Section 12.06. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness in
Default.
(a) Unless Section 12.05 shall be applicable, after
the occurrence of a Payment Default no direct or indirect payment
or distribution of any assets of such Guarantor of any kind or
character shall be made by or on behalf of such Guarantor on
account of the Guarantor Senior Subordinated Note Obligations or
on account of the purchase, redemption, defeasance or other
acquisition of the Senior Subordinated Note Obligations or the
Guarantor Senior Subordinated Note Obligations or any of the
obligations of such Guarantor under this Guarantee unless and
until such Payment Default shall have been cured or waived or
shall have ceased to exist or the Senior Indebtedness as to which
such Payment Default relates shall have been discharged or paid
in full in cash or Cash Equivalents, after which, subject to
Section 12.05 (if applicable), such Guarantor shall resume making
any and all required payments in respect of its obligations under
this Guarantee.
(b) Unless Section 12.05 shall be applicable, during
any Payment Blockage Period in respect of the Securities, no
payment or distribution of any assets of a Guarantor of any kind
or character shall be made by or on behalf of a Guarantor on
account of the Senior Subordinated Note Obligations or the
Guarantor Senior Subordinated Note Obligations or on account of
the purchase, redemption, defeasance or other acquisition of the
Guarantor Senior Subordinated Note Obligations or on account of
the purchase, redemption, defeasance or other acquisition of the
Guarantor Senior Subordinated Note Obligations or on account of
any of the other obligations of such Guarantor under this
Guarantee; provided, however, that the foregoing prohibition
shall not apply unless such Payment Blockage Period has been
instituted under Section 10.03(b) by a Senior Representative
acting for holders of Designated Senior Indebtedness which also
constitutes Guarantor Senior Indebtedness. Upon the termination
of any Payment Blockage Period, subject to Section 12.05 and
Section 12.06(a) (if applicable), such Guarantor shall resume
making any and all required payments in respect of its
obligations under this Guarantee.
(c) In the event that, notwithstanding the foregoing,
the Trustee or the Holder of any Security shall have received any
payment from a Guarantor prohibited by the foregoing provisions
of this Section 12.06, then and in such event such payment shall
be held in trust for holders of Guarantor Senior Indebtedness
and, upon written direction of the Senior Representative, shall
be paid over and delivered forthwith to the Senior Representative
initiating the Payment Blockage Period, in trust for distribution
to the holders of Guarantor Senior Indebtedness or, if no amounts
are then due in respect of Guarantor Senior Indebtedness, prompt
return to the Guarantor, or as a court of competent jurisdiction
shall direct.
Section 12.07. Release of a Guarantor.
(a) Notwithstanding anything to the contrary contained
in this Indenture, in the event that a Guarantor is released from
all obligations which pursuant to Section 4.17(a) obligated it to
become a Guarantor, such Guarantor shall be released from all
obligations under its Guarantee.
(b) In addition, except in the case where the
prohibition on transfer in Section 5.01(a) is applicable, upon
the sale or disposition of all of the Capital Stock of a
Guarantor by the Company or a Subsidiary, or upon the
consolidation or merger of a Guarantor with or into any Person
(in each case, other than to the Company or an Affiliate of the
Company), such Guarantor shall be deemed automatically and
unconditionally released and discharged from all obligations
under this Article Twelve without any further action required on
the part of the Trustee or any Holder, and all obligations of
such Guarantor, if any, in respect of any Senior Indebtedness
shall also terminate upon such transaction; provided, however,
that each such Guarantor is sold or disposed of in accordance
with Section 4.13 hereof; and provided, further, that the
foregoing proviso shall not apply to the sale or disposition of a
Guarantor in a foreclosure to the extent that such proviso would
be inconsistent with the requirements of the Uniform Commercial
Code.
(c) The Trustee shall deliver an appropriate
instrument evidencing the release of a Guarantor upon receipt of
a request of the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 12.07. Any
Guarantor not so released or the entity surviving such Guarantor,
as applicable, shall remain or be liable under its Guarantee as
provided in this Article Twelve.
The Trustee shall execute any documents reasonably re-
quested by the Company or a Guarantor in order to evidence the
release of such Guarantor from its obligations under its
Guarantee endorsed on the Securities and under this Article
Twelve.
Except as set forth in Articles Four and Five and this
Section 12.07, nothing contained in the Indenture or in any of
the Securities shall prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor or shall
prevent any sale or conveyance of the property of a Guarantor as
an entirety or substantially as an entirety to the Company or
another Guarantor.
Section 12.08. Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or
other rights which it may now or hereafter acquire against the
Company that arises from the existence, payment, performance or
enforcement of such Guarantor's obligations under this Guarantee
and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any
right to participate in any claim or remedy of any Holder of
Securities against the Company, whether or not such claim, remedy
or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive
from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or
security on account of such claim or other rights. If any amount
shall be paid to any Guarantor in violation of the preceding
sentence and the Securities shall not have been paid in full,
such amount shall be deemed to have been paid to such Guarantor
for the benefit of, and held in trust for the benefit of, the
Holders of the Securities and shall, subject to the subordination
provisions of this Article and to Article Ten, forthwith be paid
to the Trustee for the benefit of such Holders to be credited and
applied upon the Securities, whether matured or unmatured, in
accordance with the terms of this Indenture. Each Guarantor
acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture
and that the waiver set forth in this Section 12.08 is knowingly
made in contemplation of such benefits.
This Section 12.08, as applicable to any particular
Guarantor, may be amended or modified, without the consent of the
Holders, in a manner to be consistent with the terms of any
waiver of subrogation language set forth in any guarantee of such
Guarantor issued under the Credit Agreement at the time that the
Guarantee hereunder is first issued and shall thereafter be
required to be modified in the same manner as such guarantee
under the Credit Agreement is thereafter amended or modified;
provided that no such amendment or modification to thereafter
conform to the Credit Agreement shall be in a manner which is
adverse to the Holders in any respect. No modification or
amendment referred to in the preceding sentence shall be
permitted if it would disadvantage the Holders relative to the
holders of Credit Agreement Obligations of such Guarantor other
than by operation of the subordination provisions of this Article
Twelve and any Permitted Liens.
Section 12.09. Guarantee Provisions Solely to Define
Relative Rights.
The subordination provisions of this Article are and
are intended solely for the purpose of defining the relative
rights of the Holders of the Securities on the one hand and the
holders of Guarantor Senior Indebtedness of each Guarantor and,
to the extent set forth in Section 12.06, holders of Designated
Senior Indebtedness on the other hand. Nothing contained in this
Article Twelve (other than a release pursuant to Section 12.07)
or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as among each Guarantor, its creditors
other than holders of its Guarantor Senior Indebtedness and the
Holders of the Securities, the obligation of such Guarantor,
which is absolute and unconditional, to make payments to the
Holders in respect of its obligations under this Guarantee as and
when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against such
Guarantor of the Holders of the Securities and creditors of such
Guarantor other than the holders of the Guarantor Senior
Indebtedness of such Guarantor; or (c) prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon Default or an Event of Default
under this Indenture, subject to the rights, if any, under
the subordination provisions of this Article Twelve of the
holders of Guarantor Senior Indebtedness of the Guarantors
hereunder and, to the extent set forth in Section 12.06, holders
of Designated Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding-up, assignment for the
benefit of creditors or other marshalling of assets and
liabilities of the Guarantor referred to in Section 12.05, to
receive, pursuant to and in accordance with such Section, cash,
property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in
Section 12.06, to prevent any payment prohibited by such Section
or enforce their rights pursuant to Section 12.06(c).
The failure by any Guarantor to make a payment in
respect of its obligations under this Guarantee by reason of any
provision of this Article Twelve shall not be construed as
preventing the occurrence of a Default or an Event of Default
hereunder.
Section 12.10. Trustee to Effectuate Subordination of
Guarantee Obligations.
Each Holder of a Security by his acceptance thereof
authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination provided in this Article Twelve and appoints the
Trustee his attorney in fact for any and all such purposes,
including, in the event of any dissolution, winding-up,
liquidation or reorganization of any Guarantor whether in
bankruptcy, insolvency, receivership proceedings, or otherwise,
the timely filing of a claim for the unpaid balance of the
indebtedness of such Guarantor owing to such Holder in the form
required in such proceedings and the causing of such claim to be
approved. If the Trustee does not file such a claim prior to 30
days before the expiration of the time to file such a claim, the
holders of Guarantor Senior Indebtedness, or any Senior
Representative, may file such a claim on behalf of Holders of the
Securities.
Section 12.11. No Waiver of Guarantee Subordination
Provisions.
(a) No right of any present or future holder of any
Guarantor Senior Indebtedness of any Guarantor or Designated
Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act
or failure to act on the part of the Company or any Guarantor or
by any act or failure to act by any such holder, or by any
non-compliance by the Company or any Guarantor with the terms,
provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of subsection (a)
of this Section 12.11, the holders of Guarantor Senior
Indebtedness of any Guarantor may, at any time and from time to
time, without the consent of or notice to the Trustee or the
Holders of the Securities, without incurring responsibility to
the Holders of the Securities and without impairing or releasing
the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Securities to the
holders of such Guarantor Senior Indebtedness, do any one or more
of the following: (1) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, such
Guarantor Senior Indebtedness or any Senior Indebtedness as to
which such Guarantor Senior Indebtedness relates or any
instrument evidencing the same or any agreement under which
such Guarantor Senior Indebtedness or such Senior Indebtedness is
outstanding; (2) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such
Guarantor Senior Indebtedness or any Senior Indebtedness as to
which such Guarantor Senior Indebtedness relates; (3) release any
person liable in any manner for the collection or payment of such
Guarantor Senior Indebtedness or any Senior Indebtedness as to
which such Guarantor Senior Indebtedness relates; and (4)
exercise or refrain from exercising any rights against such
Guarantor and any other person; provided, however, that in no
event shall any such actions limit the right of the Holders of
the Securities to take any action to accelerate the maturity of
the Securities pursuant to Article Six hereof or to pursue any
rights or remedies hereunder or under applicable laws if the
taking of such action does not otherwise violate the terms of
this Indenture.
Section 12.12. Guarantors to Give Notice to Trustee.
(a) The Company and each Guarantor shall give prompt
written notice to the Trustee of any fact known to such Guarantor
which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the
subordination provisions of this Article or any other provision
of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received
written notice thereof at its Corporate Trust Office from the
Company, such Guarantor or a Senior Representative; and, prior to
the receipt of any such written notice, the Trustee, subject to
the provisions of this Section 12.12, shall be entitled in all
respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided
for in this Section 12.12 at least two Business Days prior to the
date upon which by the terms hereof any money may become payable
for any purpose under this Indenture (including, without
limitation, the payment of the principal of, premium, if any, or
interest on any Security), then, anything herein contained to the
contrary notwithstanding but without limiting the rights and
remedies of the holders of such Guarantor Senior Indebtedness or
any trustee, fiduciary or agent thereof, the Trustee shall have
full power and authority to receive such money and to apply the
same to the purpose for which such money was received and shall
not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date; nor
shall the Trustee be charged with knowledge of the curing of any
such default or the elimination of the act or condition
preventing any such payment unless and until the Trustee shall
have received an Officers' Certificate from such Guarantor to
such effect.
(b) The Trustee shall be entitled to rely on the
delivery to it of a written notice to the Trustee, by a person
representing himself to be a Senior Representative to establish
that such notice has been given by a Senior Representative. In
the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a
holder of Guarantor Senior Indebtedness of any Guarantor to
participate in any payment or distribution pursuant to this
Article Twelve, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the
amount of Guarantor Senior Indebtedness of each Guarantor held by
such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article Twelve,
and if such evidence is not furnished, the Trustee may defer any
payment to such person pending judicial determination as to the
right of such person to receive such payment.
Section 12.13. Reliance on Judicial Order or Certifi-
cate of Liquidating Agent Regarding
Dissolution, etc., of Guarantors.
Upon any payment or distribution of assets of any
Guarantor referred to in this Article Twelve, the Trustee and the
Holder shall be entitled to rely conclusively upon any order or
decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding-up, or similar case or
proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the
Holders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of
Guarantor Senior Indebtedness of such Guarantor and other
Indebtedness of such Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article Twelve;
provided that the foregoing shall apply only if such court has
been fully apprised of the provisions of, or the order makes
reference to, this Article Twelve.
Section 12.14. Rights of Trustee as a Holder of Guar-
antor Senior Indebtedness; Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article Twelve with
respect to any Guarantor Senior Indebtedness of any Guarantor
which may at any time be held by the Trustee, to the same extent
as any other holder of such Guarantor Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article Twelve shall
apply to claims of, or payments to, the Trustee under or pursuant
to Section 7.08.
Section 12.15. Article Twelve Applicable to Paying
Agents.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
Twelve shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article Twelve in addition
to or in place of the Trustee; provided, however, that Section
12.14 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
Section 12.16. No Suspension of Remedies.
Nothing contained in this Article Twelve shall limit
the right of the Trustee or the Holders of Securities to take any
action to accelerate the maturity of the Securities pursuant to
Article Six or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this
Article Twelve of the holders, from time to time, of Guarantor
Senior Indebtedness of the Guarantors.
Section 12.17. Trustee's Relation to Guarantor Senior
Indebtedness.
With respect to the holders of Guarantor Senior
Indebtedness of any Guarantor, the Trustee undertakes to perform
or to observe only such of its covenants and obligations as are
specifically set forth in this Article Twelve (and in Article Ten
with respect to Senior Indebtedness), and no implied covenants or
obligations with respect to the holders of Guarantor Senior
Indebtedness of any Guarantor shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Guarantor Senior Indebtedness of
any Guarantor and the Trustee shall not be liable to any holder
of Guarantor Senior Indebtedness of any Guarantor if it shall
mistakenly pay over or deliver to Holders, the Company or any
other person moneys or assets to which any holder of Guarantor
Senior Indebtedness of any Guarantor shall be entitled by virtue
of this Article Twelve or otherwise.
Section 12.18. Subrogation.
Upon the payment in full in cash or Cash Equivalents of
all amounts payable under or in respect of Guarantor Senior
Indebtedness of the Guarantors and of all Senior Indebtedness of
the Company, the Holders shall be subrogated to the rights of the
holders of such Guarantor Senior Indebtedness of the Guarantors
to receive payments or distributions of assets of any Guarantors
made on such Guarantor Senior Indebtedness of the Guarantors
until all amounts due under the Guarantee shall be paid in full
in cash or Cash Equivalents. For the purposes of such
subrogation, no payments or distributions to holders of such
Guarantor Senior Indebtedness of the Guarantors of any cash,
property or securities to which Holders of the Securities would
be entitled except for the provisions of this Article Twelve, and
no payment pursuant to the provisions of this Article Twelve to
holders of such Guarantor Senior Indebtedness of this Guarantors
by the Holders, shall, as between each Guarantor, its creditors
other than holders of such Guarantor Senior Indebtedness of the
Guarantors and the Holders, be deemed to be a payment by such
Guarantor to or on account of such Guarantor Senior Indebtedness
of the Guarantors, its being understood that the provisions of
this Article Twelve are solely for the purpose of defining the
relative rights of the holders of such Guarantor Senior
Indebtedness of the Guarantors, on the one hand, and the Holders,
on the other hand.
If any payment or distribution to which the Holders
would otherwise have been entitled but for the provisions of this
Article Twelve shall have been applied, pursuant to the
provisions of this Article Twelve, to the payment of all amounts
payable under the Guarantor Senior Indebtedness of the
Guarantors, then and in such case, the Holders shall be entitled
to receive from the holders of such Guarantor Senior Indebtedness
of the Guarantors at the time outstanding any payments or
distributions received by such holders of Guarantor Senior
Indebtedness of the Guarantors in excess of the amount sufficient
to pay all amounts payable under or in respect of such Guarantor
Senior Indebtedness of the Guarantors in full in cash or Cash
Equivalents.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of the day and year first
above written.
FOODBRANDS AMERICA, INC., a Dela-
ware corporation
By /s/ William L. Brady
William L. Brady, Vice President
SPECIALTY BRANDS, INC., a Delaware
corporation
By /s/ William L. Brady
William L. Brady, Vice President
CONTINENTAL DELI FOODS, INC., a
Delaware corporation
By /s/ William L. Brady
William L. Brady, Vice President
NATIONAL SERVICE CENTER, INC., a
Delaware corporation
By /s/ William L. Brady
William L. Brady, Vice President
RKR-GP, INC., a Delaware corpora-
tion
By /s/ William L. Brady
William L. Brady, Vice President
KPR HOLDINGS, L.P., a Delaware
limited partnership
By: RKR-GP, a Delaware corpora-
tion, General Partner
By /s/ William L. Brady
William L. Brady,
Vice President
DOSKOCIL FOOD SERVICE COMPANY,
L.L.C., an Oklahoma limited lia-
bility company
By: RKR-GP, a Delaware corpo-
ration, Member
By /s/ William L. Brady
William L. Brady
Vice President
By: Continental Deli Foods, Inc.,
a Delaware corporation,
Member
By /s/ William L. Brady
William L. Brady
Vice President
FBAI INVESTMENTS CORPORATION, an
Oklahoma corporation
By /s/ William L. Brady
William L. Brady, Vice President
BRENNAN PACKING CO., INC., a Dela-
ware corporation
By /s/ William L. Brady
William L. Brady, Vice President
FIRST UNION NATIONAL BANK, as
Trustee
By: /s/ George L. Rayzis
Name: George L. Rayzis
Title: Vice President
SEAL:
ATTEST:
By: /s/ John H. Chapham
Name: John H. Chapham
Title: Vice President
TRANSITION EMPLOYMENT AGREEMENT
AGREEMENT dated this 30th day of May, 1996, between
Foodbrands America, Inc., a Delaware corporation (the "Company")
and ______________ (the "Executive"). Unless otherwise
indicated, terms used herein and defined in Schedule A shall have
the meanings assigned to them in Schedule A.
WHEREAS, the Company desires to provide a continuity of
management and to achieve the best possible price for its
stockholders in any transition period or change in ownership and
control of the Company;
WHEREAS, Executive has specific duties and unique talents
which are of benefit to the Company both presently and in any
transition period;
WHEREAS, the Company and Executive desire that Executive be
free of any conflict of interest with regard to the performance
of Executive's duties in evaluating any proposed change in
ownership or control;
NOW, THEREFORE, it is agreed as follows:
1. The Company has employed the Executive in the capacity
of ______________ of the Company upon the terms and conditions
set forth in an Employment Agreement of ___________.
2. This Agreement shall become effective immediately upon
the occurrence of a Change of Control, provided that the
Executive is employed by the Company immediately prior to such
Change of Control. Once it becomes effective, this Agreement
shall continue for a term of two years (the "Term") and shall not
terminate in the event that the Executive's employment is
terminated either (i) by the Company without Cause or (ii) by the
Executive for Good Reason.
3. During the Term of this Agreement, so long as Executive
remains employed by the Company, he shall devote his full time,
attention, and energies to the business of the Company, and shall
not engage in any other business activity whether or not such
business activity is pursued for gain, profit, or other pecuniary
advantage; but this shall not be construed as preventing the
Executive from investing Executive's assets in such form or
manner as will not require any services or conflict of time or
interest on the part of the Executive in the operation of the
affairs of the companies in which such investments are made. The
Executive agrees that once a Change of Control occurs he will not
voluntarily terminate his employment with the Company prior to
the date thirty days after such Change of Control has occurred,
except for Good Reason.
4. The Company agrees that following a Change of Control,
no termination of the Executive's employment by the Company
(including but not limited to a Triggering Termination) will be
effective unless the Company provides the Executive ten days
prior written notice of such termination.
5. The Executive shall, while employed hereunder, be
furnished with a private office, stenographic help, and such
other facilities and services suitable to Executive's position
immediately prior to any Change of Control and adequate for the
performance of Executive's duties.
6. The Executive recognizes and acknowledges that the list
of the Company's customers, as well as other confidential
information, as it may exist from time to time, is a valuable,
special, and unique asset of the Company's business. The
Executive will not, during or after the term of Executive's
employment, disclose any such information or any part thereof to
any person, firm, corporation, association, or other entity for
any reason or purpose whatsoever. In the event of a breach or
threatened breach by the Executive of the provisions of this
paragraph, the Company shall be entitled to an injunction
restraining the Executive from disclosing, in whole or in part,
this information. The Company will be free to pursue any other
remedies as may in its discretion be deemed appropriate under the
circumstances.
7. Upon the happening of any Change of Control, the Company
agrees, while the Executive is employed hereunder, to continue to
pay to the Executive the Compensation of the Executive at least
the level in effect immediately preceding the Change of Control
and at the same times and on the same terms as in effect
immediately preceding the Change of Control.
8. (a) In the event of a Triggering Termination, the
Company agrees to continue to pay to the Executive the
Compensation of the Executive for the remainder of the Term of
this Agreement at least the greater of (i) the level in effect
immediately preceding the Change of Control; or (ii) the level in
effect at any time during the Term of this Agreement as though
the Executive's employment had not terminated. Such Compensation
shall be paid to the Executive at the same times and on the same
terms as in effect at the time as of when the Compensation is
being determined. With respect to continuing payments under
applicable bonus and incentive programs, such payments shall be
continued during the Term of this Agreement at levels not less
than those payable under the bonus and incentive payments that
would have been payable to the Executive under the terms and
provisions of any applicable bonus and incentive plan of the
Company in effect and covering the Executive immediately prior to
the Change of Control. With respect to payments under applicable
bonus and incentive plans, if the Term of this Agreement
ends during a performance period, then the Executive shall be
entitled to receive not less than a pro rata portion of the
amount he would be entitled to receive if this Agreement had
continued until the end of the performance period, or, if
greater, a pro rata portion of the amount the
Executive would be entitled to receive if the payment for the
entire period was computed under the preceding sentence.
(b) In the event of a Triggering Termination, the
Executive will also receive immediate vesting in Company stock
options, restricted shares, or performance shares held by the
Executive which have not otherwise vested in accordance with
their terms and be provided at least a three-month period after
the date of the Triggering Termination within which to exercise,
at the option price in effect prior to the Triggering
Termination, any stock options held by Executive or, should a
three-month period not be made available to Executive, Executive
shall receive, immediately after such three-month period, the
excess of the highest fair market value of the stock of the
Company on any date within said three-month period over the
option exercise price (for this purpose, the fair market value
shall be the daily closing price quoted on any exchange or
national market on which the stock is trading). In addition, for
a period of six months following the date of the Triggering
Termination, Executive will receive (i) the use of professional
outplacement services by qualified consultants retained at
Company expense; and (ii) the opportunity to purchase country
club memberships covering the Executive for the actual cost of
the membership when originally purchased by the Company if such
transfer is permitted by the country clubs.
(c) In the event Executive's employment shall be
terminated due to his death, Permanent Disability or Normal
Retirement (i) the Company shall be obligated to make payments
under then existing basic employee benefit and supplementary
executive benefit programs of the Company; and (ii) except as
provided in (i) above, all payments under this Agreement shall
cease, other than those payments which accrued, but were not yet
paid, on the date of an event described in this Section 8(c).
(d) Nothing in this Agreement shall be construed to
prevent the Company's Board of Directors from terminating
Executive's employment under this Agreement for Cause. Such
termination shall relieve the Company of its obligation to make
any other payments under this Agreement, except those that may be
payable under then existing basic employee benefit and
supplementary executive benefit programs of the Company.
9. If any amounts payable pursuant to this Agreement which
are deemed to constitute Parachute Payments, when added to any
other payments which are deemed to constitute Parachute
Payments, would result in (i) the imposition on the Executive of
an excise tax under Section 4999 of the Code or any successor
thereto or (ii) the loss of a deduction to the Company under
Section 2806 of the Code or any successor thereto, then the
amounts payable under Paragraphs 7 and 8 hereof shall be reduced
by the smallest amount necessary to avoid the imposition of such
excise tax and the loss of such deduction. In the event it
becomes necessary to limit any payments under this Agreement,
employee health benefits and life insurance shall be the last
payments to be so limited; any other payments payable under this
Agreement shall be payable when due until the remaining maximum
permissible amount has been paid to Executive under this
Paragraph. The limitations imposed by this Paragraph 9 shall be
computed by an independent accounting firm and outside counsel
mutually acceptable to Executive and Company.
10. Executive agrees that while receiving Compensation
during the Term of this Agreement, he shall not, directly or
indirectly, engage or participate in any business activity in
which the Company was engaged immediately prior to the
termination of employment that is directly competitive with and
likely to have a material adverse effect on the business of the
Company, without prior written approval of the Board of
Directors.
In the event that, while receiving Compensation during the
term of the Agreement, Executive engages in practices that are
directly competitive and that are likely to have a material
adverse effect on the Company, and Executive fails to cease such
competitive practice within 30 days after written notice is
received from the Board of Directors, Executive shall be treated
for purposes of this Agreement as terminated for Cause as of such
30th day.
11. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration at a location selected by the Company convenient to
the Executive in accordance with the Rules of the American
Arbitration Association then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction.
12. The Company shall pay all costs and expenses, including
attorneys' fees and disbursements, of the Company and, at least
monthly, the Executive, in connection with any legal proceedings
(including, but not limited to, arbitration), whether or not
instituted by the Company or the Executive, relating to the
interpretation or enforcement of any provision of this Agreement;
provided however, that if the Executive instituted the
proceedings and the judge, arbitrator or other individual
presiding over the proceeding affirmatively finds that the
Executive instituted such proceedings in bad faith then Executive
shall pay all costs and expenses (including attorney fees
and disbursements) of the Executive. The Company also agrees to
pay prejudgment interest on any money judgment obtained by the
Executive as a result of such proceedings, calculated at the
prime interest rate of Chemical Bank as in effect from time to
time from the date that payment should have been made to the
Executive under this Agreement to the date that payment is
actually made.
13. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Company and the Executive
and their respective heirs, legal representatives, successors and
assigns. If the Company shall be merged into or consolidated
with another entity, the provisions of this Agreement shall be
binding upon and inure to the benefit of the entity surviving
such merger or resulting from such consolidation. The Company
will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by
agreement in form and substance satisfactory to the Executive, to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required
to perform it if no such succession had taken place. The
provisions of this Paragraph 13 shall continue to apply to each
subsequent employer of the Executive hereunder in the event of
any subsequent merger, consolidation or transfer of assets of
such subsequent employer.
14. The Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of
any payment provided for under this Agreement be reduced by any
compensation earned by the Executive as the result of employment
by another employer after termination of the Executive's
employment hereunder or otherwise.
15. (a) The Company shall indemnify Executive to the
fullest extent permitted by the Company's Amended and Restated
By-Laws, Amended and Restated Certificate of Incorporation
and Delaware law, all as amended during the Term of this
Agreement.
(b) The Company shall indemnify Executive if he
becomes, is or was a party or becomes, is or was 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
Company) by reason of the fact that he is or was a director,
officer, employee or agent of, or is or was serving at the
request of the Company as a director, officer, employee or agent
or in any other capacity of another corporation, partnership,
joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or not taken by him while
acting in any such capacity, against expenses (including
attorneys' fees), amounts paid in settlement (whether with or
without court approval), judgments and fines actually and
reasonably incurred by him in connection with such threatened or
actual 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 Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
that his conduct was unlawful. The termination of any threatened
or actual action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of guilty or of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that Executive did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to,
the best interests of the Company, and, with respect to any
criminal action or proceeding, that he had reasonable cause to
believe that his conduct was unlawful.
(c) The Company shall indemnify Executive if he
becomes, is or was a party or becomes, is or was threatened to be
made a party to any threatened, pending or completed action
or suit by or in the right of the Company 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 Company, or is or was serving
at the request of the Company as a director, officer, employee or
agent or in any other capacity of another corporation,
partnership, joint venture, trust or other enterprise, or by
reason of any action alleged to have been taken or not taken by
him while acting in any such capacity, against expenses
(including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such
threatened, pending or completed 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 Company. The
termination of any such threatened or actual action or suit by a
settlement or by an adverse judgment or order shall not of itself
create a presumption that Executive did not act in good faith and
in a manner which he reasonably believed to be in, or not opposed
to, the best interests of the Company. Nevertheless, there shall
be no indemnification with respect to expenses incurred in
connection with any claim, issue or matter as to which Executive
shall have been adjudged to be liable to the Company 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 application that, despite the adjudication of liability but
in view of all the circumstances of the case, Executive is fairly
and reasonably entitled to indemnity for such expenses as such
Court of Chancery of Delaware, or such other court shall deem
proper.
(d) To the extent that Executive as a director,
officer, employee or agent of the Company, or as a person serving
in any other enterprise at the request of the Company, shall have
been successful on the merits or otherwise in defending against
any threatened or actual action, suit or proceeding covered by
(a), (b) and (c) of this paragraph 15 or in defense of any claim,
issue or matter therein, he shall be indemnified against all
expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(e) Any indemnification covered under this paragraph
15 (unless ordered by a court), shall be made by the Company only
as authorized in the specific cases upon a determination that
indemnification of the Executive is proper in the circumstances
because Executive has met the applicable standard of conduct set
forth in such Sections. Such determination shall be made by the
Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or
procedures, or, 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 by the
stockholders.
(f) The amount of any expenses incurred by Executive
in defending any threatened or actual action, suit or proceeding
covered under this paragraph 15 shall be advanced to or for
the benefit of Executive by the Company prior to the final
disposition thereof upon the receipt of an undertaking by or on
behalf of Executive to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the
Company.
(g) The indemnification and advancement of expenses
covered under this paragraph 15 shall not be deemed exclusive of
any other rights to which Executive may be entitled under any
agreement, any vote of shareholders or disinterested directors of
the Company, or otherwise, both as to any action in his official
capacity and as to any action in another capacity while holding
such office. The indemnification covered under this paragraph 15
shall be available with respect to claims which antedate this
Agreement.
(h) The Company shall have power to purchase and
maintain insurance on behalf of Executive if he is or was a
director, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a director, officer,
employee or agent or in any other capacity of or in another
corporation, or a partnership, joint venture, trust or other
enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not he is indemnified against such
liability under this paragraph 15.
(i) The indemnification and advancement of expenses
covered under this paragraph 15 shall, unless otherwise provided
when authorized or ratified, continue as to Executive after
he has ceased to be a director, officer, employee or agent of the
Company or engaged in any other enterprise at the request of the
Company and shall inure to the benefit of his heirs, executors
and administrators.
16. Any provision of this Agreement which is held to be
unenforceable or invalid in any respect in any jurisdiction shall
be ineffective in such jurisdiction to the extent that it is
unenforceable or invalid without affecting the remaining
provisions hereof, which shall continue in full force and effect.
The unenforceability or invalidity of a provision of this
Agreement in one jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma.
18. This instrument contains the entire agreement of the
parties, and supersedes any earlier agreement between them,
relative to a transition period or termination in the event of a
Change of Control as indicated in Paragraph 2 above. It may not
be changed orally but only by an agreement in writing signed by
the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
FOODBRANDS AMERICA, INC.
By_________________________
R. Randolph Devening
Chairman, President and
Chief Executive Officer
_________________________
Schedule A
CERTAIN DEFINITIONS
As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings
indicated:
"Cause" means the filing of charges by the appropriate
governmental authority against the Executive alleging that the
Executive has committed a felony under federal, state or local
criminal law, or such willful or gross misconduct on the part of
the Executive that is detrimental to the Company and its
subsidiaries taken as a whole, as determined in good faith by a
written resolution duly adopted by the affirmative vote of not
less than 2/3 of all the Continuing Directors (excluding for this
purpose the Executive), or in the event that there are no
Continuing Directors by unanimous vote of the Directors, at a
meeting duly called and held for that purpose after reasonable
notice to the Executive and opportunity for the Executive and his
counsel to be heard.
"Change of Control Event" means each of the following:
(a) A change in stockholder ownership of the Company,
whereby a person or company, or a group of affiliated persons or
companies, acquires a sufficiently large block of the shares of
capital stock of the Company, which, when voted together with the
shares of capital stock of all other stockholders of the Company
whose proxies or written consents are solicited by such person,
company or group without the benefit of a management supported
proxy statement at any meeting of the stockholders of the
Company, would enable such person or company or group of
affiliated persons or companies to elect a member of the Board of
Directors of the Company;
(b) A merger or consolidation of the Company with and
into another company, other than with or into a wholly-owned
subsidiary of the Company, where:
(i) the Company is not the surviving company; or
(ii) the Company is the surviving company and the
members of the Board of Directors of the Company immediately
prior to the merger or consolidation do not constitute a majority
of the Board of Directors of the surviving company after the
merger or consolidation;
(c) The sale of all or substantially all of the assets
of the Company; or
(d) Any other kind of a corporate reorganization or
takeover where:
(i) the Company is not the surviving company; or
(ii) the Company is the surviving company and the
members of the Board of Directors of the Company immediately
prior to the reorganization do not constitute a majority
of the Board of Directors of the surviving company.
(e) Whether such transaction results in a Change of
Control Event pursuant to subparagraphs (a) or (d) above or not,
the following events shall be deemed a Change of Control Event
(i) a transaction or series of transactions pursuant to which
Joseph Littlejohn & Levy Fund, L.P., transfer all of its
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) in the capital stock of the Corporation to
any other person or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act), or (ii) all of the outstanding
capital stock of the Corporation is acquired by any person or
group in one or more related transactions.
With respect to the events described in subparagraphs (b),
(c) and (d) above, the "Change of Control" shall be deemed to
occur on the later to occur of the transaction described in such
subparagraph or a shareholder vote approving such a transaction.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Compensation" means the sum of all remuneration with which
the Executive is compensated prior to the Change of Control,
including, but not limited to salary, participation in all
Company employee benefit plans, use of a company car, country
club membership, other club memberships as necessary for normal
and customary business activities, and participation in any
and all Company incentive and stock option programs, or their
equivalent, in which Executive participated prior to the Change
of Control.
"Continuing Director" means any individual who is either (i)
a member of the Company's Board of Directors on the date hereof
or (ii) was designated (before such person's initial election
as a Director) as a Continuing Director by a majority of the then
Continuing Directors.
"Good Reason" means (a) without the Executive's express
written consent, (i) (A) the assignment to the Executive of any
duties, or any limitation of the Executive's responsibilities,
inconsistent with the Executive's positions, duties,
responsibilities and status with the Company immediately prior to
the date of the Change of Control, or (B) any removal of the
Executive from, or any failure to re-elect the Executive to, any
of the Executive's positions with the Company immediately prior
to the Change of Control, except in connection with the
termination of the employment of the Executive by the Company for
Cause or as a result of the death, Permanent Disability or Normal
Retirement of the Executive, and (ii) the continuance thereof for
a period of twenty days after written notice thereof to the
Company from the Executive; (b) any failure by the Company to
pay, or any reduction by the Company of, the Executive's
Compensation in effect immediately prior to the Change of
Control; (c) any failure by the Company to (i) continue to
provide the Executive with the opportunity to participate, on
terms no less favorable than those in effect immediately prior to
the Change of Control, in any benefit plans and programs in which
the Executive was participating immediately prior to the Change
of Control, or their equivalent, or (ii) provide the Executive
with all other fringe benefits, or their equivalent, from time to
time in effect for the benefit of any executive, management or
administrative group which customarily includes a person holding
the employment position with the Company then held by the
Executive; (d) without the Executive's express written consent,
the relocation of the principal place of the Executive's
employment to a location that is more than 35 miles further from
the Executive's principal residence than such principal place of
employment immediately prior to the Change of Control, except in
connection with a good faith consolidation or move of the
corporate headquarters of the Company to a location within the
continental United States in which the Executive's moving
expenses are fully reimbursed, or the imposition of travel
requirements on the Executive not substantially consistent with
such travel requirements existing immediately prior to the Change
of Control; or (e) any breach of Paragraph 13 hereof.
"Normal Retirement" means the Executive's termination of
employment with the Company on or after the first day of the
month coincident with or next following his 65th birthday.
"Parachute Payment" means any payment deemed to constitute a
"parachute payment" as defined in Section 280G of the Code.
"Permanent Disability" means that (i) Executive has been
totally incapacitated by bodily injury or physical or mental
disease so as to be prevented thereby from engaging in any
comparable occupation or employment for remuneration or profit,
(ii) such total incapacity will, in the opinion of a qualified
physician who has been approved by the Executive (or if
applicable, the person or persons legally empowered to make such
decisions on behalf of the Executive) and the Company, be
permanent and continuous during the remainder of the Executive's
life, and (iii) Executive is disabled for purposes of any and all
executive management programs under which benefits, compensation
or awards are contingent upon a finding of disability.
"Triggering Termination" means any termination of the
employment of the Executive contemporaneously with a Change of
Control or during the Term of this Agreement (i) by the Company
other than for Cause, for Permanent Disability, or upon Normal
Retirement; or (ii) by the Executive for Good Cause.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of June 1, 1996, is made by and
between Foodbrands America, Inc., a Delaware corporation (the
"Corporation") and _____________ ("Optionee").
WHEREAS, on February 3, 1992, the Board of Directors of the
Corporation (the "Board") adopted the Doskocil Companies
Incorporated 1992 Stock Incentive Plan (as amended, the "Plan"),
and the Plan was approved by the shareholders of the Corporation
on July 9, 1992; and
WHEREAS, among other things, the Plan provides for the
granting of stock options by the Compensation Committee of the
Board (the "Committee") to Eligible Employees of the Corporation
(or any Subsidiary thereof) to purchase shares of the Common
Stock of the Corporation; and
WHEREAS, the Committee considers the Optionee to be an
Eligible Employee pursuant to the Plan, and has determined that
it would be in the best interests of the Corporation to grant the
Option documented herein; and
WHEREAS, the Optionee desires to accept such Option, subject
to the terms and conditions hereinafter set forth and in the
Plan, which is incorporated herein by this reference.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Grant of Option
The Corporation hereby grants to the Optionee, subject to
the terms and conditions of the Plan, and also subject to the
terms and conditions of this Agreement, the right and option to
purchase from the Corporation all or any part of an aggregate of
_______________ (____) shares of the Common Stock (the "Shares"),
at an exercise price of $13.00 per share (the "Exercise Price").
This option (the "Option") is not intended to be and will not be
treated as an incentive stock option within the meaning of
Section 422A of the Internal Revenue Code of 1986, as amended.
The number of Shares and the Exercise Price are each subject
to adjustment under certain circumstances, as more fully set
forth in Article X of the Plan. The term "Common Stock" as used
herein shall include any other class of stock or other
securities resulting from such adjustment.
2. Option Expiration Date.
Unless otherwise provided in this Agreement or in the Plan,
the Option, to the extent it has not been previously exercised,
shall expire as of 11:59 p.m. on December 13, 2005 (the "Option
Expiration Date").
3. Option Vesting and Exercise Limitations.
(a) 9% of the Shares shall vest on December 14, 1995.
(b) 18.2% of the Shares shall vest over the next five years
as of the end of each fiscal year commencing with December 28,
1996, if the Corporation meets its EBITDA target for the year
ended on such date, (as set forth in the bank model presented to
Chemical Bank in the Frozen Specialty acquisition financing and
as adjusted from time to time by the Committee for acquisitions
and divestitures) and the Optionee remains an employee of the
Corporation on such date; provided, however, that if the
Corporation's performance for a year falls below such target and
is recouped in the following year on an aggregate basis for both
years, the Shares for both years shall vest.
(c) In the event of the death of the Optionee after July
31, 1998 and prior to January 1, 2001, and while he remains an
employee of the Corporation, all outstanding Shares not
previously vested shall vest on the date of his death.
(d) If a "Change of Control Event" occurs, within the
meaning of subparagraphs (b), (c), (d) or (e) of Section II.4 of
the Plan, all outstanding Shares not previously vested shall vest
on the date of such event provided the Optionee is an employee of
the Corporation or any Subsidiary of the Corporation on such
date.
4. Option Exercise Procedure.
Subject to the limitations set forth in the Plan and in
Section 3 hereof, the Option may be exercised in whole or in
installments, and shall be exercised by the timely delivery to
the Corporation, in the manner described in Section 15 hereof, of
a written Notice of Election to Exercise Option in substantially
the form attached hereto as Exhibit "A". The Notice of Election
to Exercise Option shall be accompanied by payment of the
Exercise Price for the shares of Common Stock with respect to
which the Option is being exercised, together with payment of any
necessary withholding taxes.
5. Payment of the Exercise Price.
The Exercise Price shall be paid (a) in cash, or by check,
bank draft or money order payable to the order of the
Corporation; (b) in shares of previously acquired Common Stock
(excluding non-vested shares of Restricted Stock) duly endorsed
and free of any liens and encumbrances; (c) in any combination of
the foregoing; or (d) with such other consideration as the
Committee may at such time deem appropriate. Common Stock used
to pay the Exercise Price shall be valued at its Fair Market
Value as of the date of such exercise. In addition to the
foregoing, and subject to the discretion of the Committee, the
Option may be exercised by a broker-dealer acting on behalf of
the Optionee if (A) the broker-dealer has received from the
Optionee or the Corporation a fully- and duly- endorsed agreement
evidencing such Option and instructions signed by the Optionee
requesting the Corporation to deliver the shares of Common Stock
subject to the Option to the broker dealer on behalf of the
Optionee and specifying the account into which such shares should
be deposited, (B) adequate provision has been made with respect
to the payment of any withholding taxes due upon such exercise,
and (C) the broker dealer and the Optionee have otherwise
complied with Section 220.3(e)(4) of Regulation T, 12 CFR, Part
220 and any successor rules and regulations applicable to such
exercise ("Cashless Exercise"); provided, however, that, if
Optionee is an Insider Participant (as defined in the Plan), the
Optionee may not elect to utilize a Cashless Exercise within six
(6) months following the later to occur of (i) the date the
Option is granted, or (ii) the date of shareholder approval of
the Plan (unless death or disability occurs prior to the
expiration of such six-month period), and any such election must
be made during any period beginning on the third business day
following the date of release of a summary statement of the
Corporation's quarterly or annual sales and earnings and ending
on the twelfth business day following such date (the "Window
Period").
6. Restrictions on Transfer.
The Option shall not be subject in any manner to alienation,
anticipation, sale, transfer, assignment, pledge, or encumbrance,
except for transfer by will or the laws of descent and
distribution. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of the Option, or to subject the
Option to execution, attachment or similar process, contrary to
the provisions hereof, shall be void and ineffective, shall give
no right to any purported transferee, and may, at the discretion
of the Committee, result in forfeiture of the Option.
7. Other Option Conditions.
(a) If the Optionee ceases to be employed by the
Corporation or any Subsidiary of the Corporation prior to the
Option Expiration Date for any reason other than (i) the death of
the Optionee, or (ii) on account of any act of fraud, intentional
misrepresentation, embezzlement, misappropriation, or conversion
of assets or opportunities of the Corporation or any of its
Subsidiaries, then the Option may be exercised, to the extent the
Optionee was able to do so as of the date of such termination of
employment, within a period ending on the earlier to occur of (A)
the date which is three months following such termination of
employment, or (B) the Option Expiration Date.
(b) If the Optionee dies (i) on or prior to July 31, 1998
or (ii) on or after January 1, 2001 but before the Option
Expiration Date and is employed by the Corporation or a
Subsidiary of the Corporation at the time of death, or if an
Optionee dies within a period of three months following the
termination of his or her employment (but before the Option
Expiration Date), the Option may be exercised, to the extent the
Optionee was entitled to exercise the Option as of the date of
his or her death, within a period ending on the earlier to occur
of (A) the date which is one year following the date of death, or
(B) the Option Expiration Date. Under such circumstances, the
Option may be exercised by the Beneficiary named by the Optionee
in a valid Beneficiary designation filed with the Committee, as
more fully described in Section 12 hereof, and if no such
Beneficiary designation has been filed with the Committee at such
time, or if no such designated Beneficiary has survived the
Optionee, then the Option may be exercised by the executor or
administrator of the estate of the Optionee, or by the person or
persons who shall have acquired the Option directly from the
Optionee by bequest or inheritance.
(c) Notwithstanding anything to the contrary set forth in
subsection (a) of this Section 7, if the employment of the
Optionee is terminated prior to the Option Expiration Date on
account of fraud, intentional misrepresentation, embezzlement,
misappropriation, or conversion of assets or opportunities of the
Corporation or any of its Subsidiaries, then the Option, to the
extent it has not been previously exercised, shall automatically
and immediately expire as of the date of such termination of
employment, regardless of the extent to which it would have been
otherwise exercisable at such time.
(d) Notwithstanding anything to the contrary set forth in
subsection (a) of this Section 7, if, within a period of two
years following a "Change of Control Event" described in
subparagraph (a) of Section II.4 of the Plan (and not otherwise
resulting in the immediate vesting of the Shares pursuant to
Section 3(d) of this Agreement), the Optionee's employment with
the Corporation (including the Optionee's employment with any and
all Subsidiaries thereof) shall be terminated for any of the
following reasons, then the Option held by the Optionee shall be
deemed to be fully exercisable and the Corporation shall, within
the three (3) month period following such termination of
employment, permit the full exercise of the option, to the extent
not previously exercised:
(1) A termination of employment by the Optionee for
any reason constituting "good reason" or "good cause" under any
written agreement setting forth the terms of employment between
the Optionee and the Corporation or a Subsidiary (an "Employment
Agreement"); or
(2) A termination of the Optionee's employment by the
Corporation or Subsidiary for any reason other than:
(A) the disability of the Optionee;
(B) the normal retirement of the Optionee;
(C) an act by the Optionee of fraud, intentional
misrepresentation, embezzlement,
misappropriation or conversion of assets or
opportunities of the Corporation or any
Subsidiary; or
(D) an event which would permit a termination
"for cause" as such term is defined in any
Employment Agreement.
For purposes of this subsection (d) of Section 7, the
"disability" of the Optionee shall be deemed to occur when the
Optionee becomes entitled to receive benefits under the long-term
disability coverage provided by the Corporation. Also for
purposes of this subsection (d) of Section 7, the Optionee's
"normal retirement" shall be deemed to occur when the Optionee
has terminated employment with the Corporation (and all
Subsidiaries thereof) on or after the first day of the month
coinciding with or immediately following the Optionee's 65th
birthday.
8. Government Regulations. Registration and Listing of Stock.
This Agreement, the grant and exercise of the Option, and
the Corporation's obligation to sell and deliver Common Stock
pursuant to the exercise of the Option, shall be subject to all
applicable federal, state and local laws, rules and regulations
and to such approvals which may be required by regulatory or
governmental agencies.
9. Withholding Taxes.
The Corporation's obligation to deliver shares of Common
Stock upon the exercise of the Option shall be subject to the
Optionee's satisfaction of all applicable federal, state and
local withholding tax requirements arising out of the exercise of
the Option. In that regard, the Committee may allow the Optionee
to pay the amount of taxes required by law to be withheld as a
result of the exercise of the Option (a) by withholding from the
amount of Common Stock due upon exercise of the Option, or (b) by
allowing the Optionee to deliver to the Corporation, shares of
Common Stock having a Fair Market Value, on the date of payment,
equal to the amount of such required withholding taxes;
provided, however, that if Optionee is deemed by the Corporation
to be an insider, an election under (a) may not be made within
six months of the date the Option is granted (unless death or
disability of the Optionee occurs prior to the expiration of such
six-month period), and must be made either six months prior to
the date of payment or during the Window Period.
To the extent the Optionee fails to satisfy the above
withholding obligation, the Corporation shall, to the extent
permitted by law, have the right to deduct from any payments of
any kind otherwise due to the Optionee, any such withholding
taxes.
10. No Shareholder Rights.
The Optionee shall have no rights as a shareholder with
respect to any shares of Common Stock subject to this Option
prior to the date of issuance to him of a certificate for such
shares.
11. No Other Rights Created.
This Agreement shall not constitute an employment agreement
and shall not confer upon the Optionee any right to remain in the
employ of the Corporation or any Subsidiary thereof. The
Optionee shall remain subject to termination of his employment to
the same extent as though this Agreement did not exist.
12. Beneficiaries.
The Optionee may file with the Committee a written
designation of one or more persons as the beneficiary (the
"Beneficiary") who, in the event of the Optionee's death, shall
be entitled to receive any Options or shares of Common Stock
which may be distributable upon the exercise of any Option
granted hereunder. The Optionee may, from time to time, revoke
or change his Beneficiary designation without the consent of any
prior Beneficiary by filing a new designation with the Committee.
The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the
Committee prior to the Optionee's death, and in no event shall be
effective as of a date prior to such receipt.
If no such Beneficiary designation is in effect at the time
of the Optionee's death, or if no designated Beneficiary survives
the Optionee, or such designation conflicts with law, the
delivery of such Option or shares of Common Stock, shall be made
to the Optionee's estate. If the Committee is in doubt as to the
right of any person to receive such Option or such Common Stock,
the Committee may retain such Option or such Common Stock,
without liability or any interest thereon, until the rights
thereon are determined, or the Committee may deliver such Option
or shares of Common Stock into any court of appropriate
jurisdiction, and such delivery shall be a complete discharge of
the liability of the Plan, the Corporation and the Committee
therefor.
13. Binding Effect.
The Optionee hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all of the terms and provisions
thereof. The terms of the Plan as it presently exists, and as it
may hereafter be amended, are deemed incorporated herein by
reference, and any conflict between the terms of this Agreement
and the terms and provisions of the Plan shall be resolved by the
Committee, whose determination shall be final and binding on all
parties. In general, and except as otherwise determined by the
Committee, the provisions of the Plan shall be deemed to
supersede the provisions of this Agreement to the extent of any
conflict between the Plan and this Agreement. Terms that have
their initial letter capitalized but that are not otherwise
defined in this Agreement shall have the meanings given to them
in the Plan in effect as of the date of this Agreement.
14. Notices.
Any notice hereunder to the Corporation shall be addressed
to it at Foodbrands America, Inc., Compensation Committee, 1601
N.W. Expressway, Suite 1700, Oklahoma City, Oklahoma 73118. Any
notice hereunder to the Optionee shall be addressed to him at the
address set forth below, subject to the right of either party at
any time hereafter to designate at any time hereafter in writing
a different address.
15. Amendment.
The Committee may at any time unilaterally amend the terms
and conditions pertaining to the Option; provided, however that
any such amendment which is adverse to the Optionee shall require
the Optionee's written consent. Any other amendment of this
Agreement shall require a written agreement executed by both
parties.
16. Miscellaneous.
This Agreement contains a complete statement of all the
arrangements between the parties with respect to its subject
matter. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed exclusively in
the State of Delaware. The headings in this Agreement are solely
for convenience of reference and shall not affect its meaning or
interpretation.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be executed by its duly authorized officer and the
Optionee has executed this Agreement as of the day and year first
above written.
FOODBRANDS AMERICA, INC.
By _________________________
R. Randolph Devening
Chairman, President &
Chief Executive Officer
_________________________
AMENDMENT NO. 1
AMENDMENT NO. 1 dated as of May 13, 1996 (this
"Amendment"), among Foodbrands America, Inc., a Delaware
corporation (the "Borrower"), the financial institutions parties
hereto (the "Lenders") and Chemical Bank, a New York banking
corporation, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent"), collateral agent (in such
capacity, the "Collateral Agent") and Issuing Lender (in such
capacity, the "Issuing Lender"), and Citibank, N.A. as managing
agent (in such capacity, the "Managing Agent").
PRELIMINARY STATEMENTS.
(1) The Borrower, the Lenders, the Administrative
Agent, the Collateral Agent, the Issuing Lender and the Managing
Agent have entered into the Credit Agreement dated as of
December 11, 1995 (the "Credit Agreement") and have agreed to
amend the Credit Agreement as hereinafter set forth.
(2) Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in
the Credit Agreement.
In consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto
agree, on the terms and subject to the conditions set forth
herein, as follows:
SECTION 1. Amendment of the Credit Agreement. The
Credit Agreement is amended as follows:
(a) The third paragraph of the Credit Agreement is
amended in its entirety to read as follows:
"The proceeds of the Initial Term Loans will be
used by the Borrower solely (a) to finance the purchase
price for the KPR Acquisition, (b) to pay fees and
expenses in connection with the KPR Acquisition and (c)
to pay amounts outstanding under the Existing Credit
Agreement. The proceeds of the Supplemental Term Loans
will be used by the Borrower solely to prepay part of
the Initial Term Loans."
(b) Section 1.01 of the Credit Agreement is amended to
add the following defined terms thereto in appropriate
alphabetical order:
"Amendment No. 1" shall mean Amendment No. 1 to
the Credit Agreement dated as of May 13, 1996 among the
Borrower, the Lenders, the Administrative Agent, the
Collateral Agent, the Issuing Lender and the Managing
Agent.
"IMI Pledge Agreement" shall mean the Mortgage of
Shares in respect of International Meat Ingredients
Limited to be executed by KPR Holdings, L.P. as
Mortgagor in favor of the Collateral Agent.
"Initial Term Loans" shall mean the Term Loans
made to the Borrower prior to the Supplemental Term
Loan Closing Date, in the original principal amount of
$145,000,000.
"Supplemental Maturity Date" shall mean February
28, 2003.
"Supplemental Term Loan Closing Date" shall mean
the date of the Borrowing of the Supplemental Term
Loans hereunder.
"Supplemental Term Loan Commitment" shall mean,
with respect to each Lender, the commitment of such
Lender to make Supplemental Term Loans hereunder on the
Supplemental Term Loan Closing Date as set forth in
clause (a) of Section 2.01, as the same may be reduced
from time to time pursuant to Section 2.09.
"Supplemental Term Loans" shall mean the Term
Loans made to the Borrower on the Supplemental Term
Loan Closing Date, in the original principal amount of
$100,000,000.
"Tender Offer" shall have the meaning assigned to
such term in Amendment No. 1.
" 2000 Subordinated Note Indenture" shall mean the
Indenture dated as of April 28, 1993 among the Borrower
and First Fidelity Bank, National Association, New
York, as Trustee, relating to the 2000 Subordinated
Notes, as the same may be amended, modified or
supplemented in accordance with the provisions of this
Agreement.
"2000 Subordinated Notes" shall mean $110,000,000
aggregate principal amount of the Borrower's 9-3/4%
Senior Subordinated Redeemable Securities due
2000 issued under the 2000 Subordinated Note Indenture.
"2006 Subordinated Note Indenture" shall mean the
Indenture dated on or about May 15, 1996 among the
Borrower and Liberty Bank and Trust Company of
Oklahoma, N.A., as Trustee, relating to the 2006
Subordinated Notes, as the same may be amended,
modified or supplemented in accordance with the
provisions of this Agreement.
"2006 Subordinated Notes" shall mean the
Borrower's Senior Subordinated Securities due 2006
issued under the 2006 Subordinated Note Indenture in an
amount not to exceed $125,000,000.
(c) The following definitions in Section 1.01 of the
Credit Agreement are amended in their entirety to read as
follows:
"ABR Spread" shall mean 1.25% per annum in the
case of ABR Loans which are Initial Term Loans,
Revolving Loans, or Acquisition Loans and 1.75%
in the case of ABR Loans which are Supplemental Term
Loans, subject to adjustment pursuant to the table set
forth below based on the Total Debt Ratio as of the
last day of the Borrower's most recently ended fiscal
quarter:
<TABLE>
<CAPTION>
Total Debt Ratio ABR Spread ABR Spread
________________ Initial Term Loans, Revolving Supplemental
Loans, and Acquisition Loans Term Loans
_____________________________ ____________
<S> <C> <C>
Greater than or
equal to 4.75 to 1 1.50% 1.75%
Less than 4.75 to 1
but greater than or
equal to 4.25 to 1 1.25% 1.75%
Less than 4.25 to 1
but greater than or
equal to 4 to 1 1.00% 1.50%
Less than 4 to 1 .75% 1.25%
</TABLE>
"Acquisition" shall mean the KPR Acquisition and
any Qualified Acquisition.
"Commitment" shall mean, with respect to each
Lender, such Lender's Funded Term Loan Commitment,
Unfunded Term Loan Commitment, Supplemental Term Loan
Commitment, Revolving Credit Commitment and Acquisition
Loan Commitment.
"EBITDA" shall mean, with respect to the Borrower
and its consolidated subsidiaries for any period, the
sum, without duplication, of (a) Net Income for such
period, (b) all Federal, state, local and foreign
income taxes deducted in determining such Net Income,
(c) interest expense deducted in determining such
Net Income, (d) depreciation and amortization of the
write-up of assets resulting from Acquisitions
deducted in determining such Net Income, (e) other
depreciation, amortization and other noncash charges
deducted in determining such Net Income, and (f) any
premium paid to the holders of 2000 Subordinated
Notes upon their tender of such 2000 Subordinated Notes
pursuant to the Tender Offer.
"LIBOR Spread" shall mean 2.25% per annum in the
case of Eurodollar Loans which are Initial Term Loans,
Revolving Loans or Acquisition Loans and 2.75% in the
case of Eurodollar Loans which are Supplemental Term
Loans, subject to adjustment pursuant to the table set
forth below based on the Total Debt Ratio as of the
last day of the Borrower's most recently ended fiscal
quarter:
<TABLE>
<CAPTION>
Total Debt Ratio LIBOR Spread LIBOR Spread
________________ Initial Term Loans, Revolving Supplemental
Loans, and Acquisition Loans Term Loans
_____________________________ ____________
<S> <C> <C>
Greater than or
equal to 4.75 to 1 2.50% 2.75%
Less than 4.75 to 1
but greater than or
equal to 4.25 to 1 2.25% 2.75%
Less than 4.25 to 1
but greater than or
equal to 4 to 1 2.00% 2.50%
Less than 4 to 1 1.75% 2.25%
</TABLE>
"Security Documents" shall mean the Mortgages
(including any Leasehold Mortgage), the Security
Agreement, the Pledge Agreement, the Collateral
Assignment, the Patent Security Agreement, the
Trademark Security Agreement, the IMI Pledge Agreement
and each of the security agreements, mortgages and
other instruments and documents executed and delivered
pursuant to any of the foregoing or pursuant to Section
6.10.
"Subordinated Note Indenture" shall mean each of
the 2000 Subordinated Note Indenture and the 2006
Subordinated Note Indenture.
"Subordinated Note Indentures" shall mean the 2000
Subordinated Note Indenture and the 2006 Subordinated
Note Indenture collectively.
"Subordinated Notes" shall mean the 2000
Subordinated Notes and the 2006 Subordinated Notes.
"Term Loan Commitment" shall mean, with respect to
each Lender, such Lender's Funded Term Loan Commitment,
Unfunded Term Loan Commitment and Supplemental Term
Loan Commitment.
(d) Section (c) of the definition of "Change in
Control" is amended in its entirety to read as follows:
"(c) any Change of Control Triggering Event (as defined
in the 2000 Subordinated Note Indenture) or any Change
of Control (as defined in the 2006 Subordinated
Note Indenture) shall have occurred."
(e) Subsection (ii) of the definition of "Interest
Period" in Section 1.01 is changed to read as follows:
"the Maturity Date in the case of Initial Term Loans,
Acquisition Loans and Revolving Loans and the
Supplemental Maturity Date in the case of Supplemental
Term Loans."
(f) Each reference to $250,000 in subsection (d)(i) of
the definition of "Prepayment Event" is changed to $500,000.
(g) Section 2.01(a) of the Credit Agreement is amended
in its entirety to read as follows:
"(a) to make Term Loans to the Borrower on the Closing
Date in an aggregate principal amount up to but not
exceeding the amount of the Funded Term Loan Commitment set
forth opposite such Lender's name on Schedule 2.01, and to
make Supplemental Term Loans to the Borrower on the
Supplemental Term Loan Closing Date in an aggregate
principal amount up to but not exceeding the amount of the
Supplemental Term Loan Commitment set forth opposite such
Lender's name on Schedule 2.01;"
(h) The first sentence of Section 2.02(a) of the
Credit Agreement is amended in its entirety to read as follows:
"Each Loan shall be made as part of a Borrowing consisting
of Loans made by the Lenders ratably in accordance with
their respective Funded Term Loan Commitments, Revolving
Credit Commitments, Acquisition Loan Commitments or
Supplemental Term Loan Commitments, as the case may be;
provided, however, that the failure of any Lender to make
any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such
other Lender)."
(i) Section 2.09(a) of the Credit Agreement is amended
to add the following sentence after the third sentence thereof:
"The Supplemental Term Loan Commitments shall be
automatically terminated at 5:00 p.m., New York City time,
on the Supplemental Term Loan Closing Date."
(j) Section 2.10(f) of the Credit Agreement is amended
in its entirety to read as follows:
"(f) no Interest Period may be selected for any
Eurodollar Borrowing consisting of Initial Term Loans
or Supplemental Term Loans, as the case may be, that
would end later than a Term Loan Repayment Date
occurring on or after the first day of such Interest
Period if, after giving effect to such selection, the
aggregate outstanding amount of (i) the Eurodollar
Borrowings consisting of Initial Term Loans or
Supplemental Term Loans, as applicable, with Interest
Periods ending on or prior to such Term Loan Repayment
Date and (ii) the ABR Borrowings consisting of Initial
Term Loans or Supplemental Term Loans, as applicable,
would not be at least equal to the principal amount of
Term Borrowings consisting of Initial Term Loans or
Supplemental Term Loans, as applicable, to be paid on
such Term Loan Repayment Date; and"
(k) Sections 2.11(a), (b) and (c) of the Credit
Agreement are amended in their entirety to read as follows:
"(a) The Borrower shall pay to the Administrative
Agent, for the account of the Lenders, on each date set
forth below (each such date being a "Term Loan
Repayment Date") principal amounts of the Initial Term
Loans and the Supplemental Term Loans (such amount, as
adjusted from time to time pursuant to Sections 2.12(b)
and 2.13(e), being called the "Term Loan Repayment
Amount") equal to the amounts set forth below opposite
such date, together in each case with accrued and
unpaid interest on the principal amounts to be paid to
but excluding the date of such payment:
<TABLE>
<CAPTION>
Date Amount of Amount of
____ Initial Term Loans Supplemental Term
Loans
__________________ _________________
<S> <C> <C>
May 31, 1996 $1,734,735.21 $0
August 31, 1996 $1,734,735.21 $0
November 30, 1996 $1,734,735.21 $0
February 28, 1997 $1,734,735.21 $0
May 31, 1997 $2,390,079.62 $1,250,000
August 31, 1997 $2,390,079.62 $1,250,000
November 30, 1997 $2,390,079.62 $1,250,000
February 28, 1998 $2,390,079.62 $1,250,000
May 31, 1998 $3,373,096.24 $1,250,000
August 31, 1998 $3,373,096.24 $1,250,000
November 30, 1998 $3,373,096.24 $1,250,000
February 28, 1999 $3,373,096.24 $1,250,000
May 31, 1999 $3,681,493.61 $1,250,000
August 31, 1999 $3,681,493.61 $1,250,000
November 30, 1999 $3,681,493.61 $1,250,000
January 15, 2000 $3,681,493.61 $0
February 28, 2000 $0 $1,250,000
May 31, 2000 $0 $6,250,000
August 31, 2000 $0 $6,250,000
November 30, 2000 $0 $6,250,000
February 28, 2001 $0 $6,250,000
May 31, 2001 $0 $7,500,000
August 31, 2001 $0 $7,500,000
November 30, 2001 $0 $7,500,000
February 28, 2002 $0 $7,500,000
May 31, 2002 $0 $7,500,000
August 31, 2002 $0 $7,500,000
November 30, 2002 $0 $7,500,000
February 28, 2003 $0 $7,500,000
</TABLE>
On each Term Loan Repayment Date, the Administrative
Agent shall apply the Term Loan Repayment Amount paid
to the Administrative Agent to pay the Initial Term
Loans and the Supplemental Term Loans in the amounts
set forth above.
(b) The Borrower shall pay to the Administrative
Agent, for the account of the Lenders, on May 31, 1997
and on each Term Loan Repayment Date thereafter through
and including the Maturity Date, a principal amount of
the Acquisition Loans (such amount, as adjusted from
time to time pursuant to Sections 2.12(b) and 2.13 (e),
being called the "Acquisition Loan Repayment Amount")
equal to one-twelfth (1/12) of the outstanding
principal balance of the Acquisition Loans as of the
close of business on the Acquisition Loan Commitment
Termination Date, together in each case with accrued
and unpaid interest on the principal amount to be paid
to but excluding the date of such payment. On each
Term Loan Repayment Date, the Administrative Agent
shall apply the Acquisition Loan Repayment Amount paid
to the Administrative Agent to pay the Acquisition
Loans.
(c) To the extent not previously paid, (i) all
Term Borrowings consisting of Initial Term Loans and
all Acquisition Loan Borrowings shall be due and
payable on the Maturity Date, together with accrued and
unpaid interest on the principal amount to be paid to
but excluding the date of payment, and (ii) all Term
Borrowings consisting of Supplemental Term Loans shall
be due and payable on the Supplemental Maturity Date,
together with accrued and unpaid interest on the
principal amount to be paid to but excluding the date
of payment."
(l) Section 2.13(f) of the Credit Agreement is amended
to add the following after subsection (ii):
(iii) 100% of the Net Cash Proceeds from the extension
of the Supplemental Term Loans and 100% of the amount
by which the Net Cash Proceeds from the 2006
Subordinated Notes exceeds the aggregate amount
necessary to consummate the Tender Offer shall be
applied to prepay, ratably, scheduled payments of
principal due on the Initial Term Loans; and
(iv) each mandatory prepayment of principal of the
Initial Term Loans applied pursuant to Section
2.13(f)(iii) shall be applied pro rata to reduce the
scheduled payments of principal due under Section
2.11(a) after the date of such prepayment.
(m) The reference to "Subordinated Note Indenture" in
Section 4.26 of the Credit Agreement is changed to "Subordinated
Note Indentures".
(n) The following new Section 5.04 is added following
Section 5.03 of the Credit Agreement:
"SECTION 5.04. Supplemental Term Loans. On the
Supplemental Term Loan Closing Date, which shall occur no
later than June 30, 1996,:
(a) The Administrative Agent shall have received:
(i) a copy of the certificate of
incorporation, including all amendments thereto,
of the Borrower, certified as of a recent date by
the Secretary of State of Delaware, and a
certificate as to the good standing of the
Borrower as of a recent date, from such Secretary
of State;
(ii) a certificate of the Secretary or
Assistant Secretary of the Borrower dated the
Supplemental Term Loan Closing Date and
certifying:
(A) that attached thereto is a true and
complete copy of the by-laws of the Borrower,
as in effect on the Supplemental Term Loan
Closing Date and at all times since a date
prior to the date of the resolutions
described in clause (B) below,
(B) that attached thereto is a true and
complete copy of resolutions duly adopted by
the Board of Directors of the Borrower
authorizing the execution, delivery and
performance of this Amendment and the
borrowings contemplated hereby, and that
such resolutions have not been modified,
rescinded or amended and are in full force
and effect,
(C) that the certificate of
incorporation of the Borrower has not been
amended since the date of the last amendment
thereto shown on the certificate of good
standing furnished pursuant to clause (i)
above and
(D) as to the incumbency and specimen
signature of each officer executing this
Amendment or any other document delivered
in connection herewith on behalf of the
Borrower;
(iii) a certificate of another officer as to
the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; and
(iv) such other documents as the
Administrative Agent or Sidley & Austin, counsel
for the Administrative Agent, may reasonably
request.
(b) The Administrative Agent shall have received a
certificate, dated the Supplemental Term Loan Closing Date
and signed by a Financial Officer of the Borrower,
confirming compliance with the conditions precedent set
forth in paragraphs (b) and (c) of Section 5.01 of the
Credit Agreement.
(c) The Borrower and each Subsidiary Guarantor shall
have executed such mortgage modification agreements and
other instruments, documents and agreements relating hereto
as the Administrative Agent or Sidley & Austin may
reasonably request.
(d) Holders of 2000 Subordinated Notes representing
not less than 80% of the aggregate principal amount of the
outstanding 2000 Subordinated Notes shall have tendered such
2000 Subordinated Notes to the Borrower pursuant to the
Borrower's tender offer therefor, such tender offer (the
"Tender Offer") to be substantially on the terms disclosed
in the Offer to Purchase and Consent Solicitation dated
March 29, 1996 as supplemented by the Supplement to Offer to
Purchase and Consent Solicitation dated April 24, 1996 and
by the Second Supplement to Offer to Purchase and Consent
Solicitation dated May 8, 1996, as it may be further
extended to a date not to exceed May 31, 1996.
(e) The terms of the 2006 Subordinated Notes and the
2006 Subordinated Note Indenture (including without
limitation provisions relating to amortization, maturity,
covenants, defaults, subordination, amendment, standstill
and sinking fund) shall be in all material respects
identical to those set forth in the preliminary Prospectus
dated April 25, 1996.
(f) The Borrower shall have received at least
$96,000,000 constituting proceeds of the 2006 Subordinated
Notes and applied such proceeds to purchase and retire all
2000 Subordinated Notes tendered pursuant to the Tender
Offer.
(g) The Lenders, the Administrative Agent and the
Arranger shall have received all fees and expenses required
to be paid on or before the Supplemental Term Loan Closing
Date.
(h) The Lenders shall have received satisfactory pro
forma consolidated financial statements of the Borrower and
its Subsidiaries, giving effect to the consummation of the
Tender Offer and the making of the Supplemental Term Loans
financing contemplated hereby, showing that the Borrower
will comply with the covenants in Sections 7.15 and
7.16 throughout the term of the Facilities and will have
cash flow sufficient to meet all scheduled payments of
principal of and interest on the Facilities through the
Supplemental Maturity Date.
(i) All actions necessary or reasonably requested to
perfect, or to maintain the perfection of, the liens of the
Collateral Agent and the Lenders shall have been taken and
all fees and taxes payable in connection therewith shall
have been paid.
(j) The Administrative Agent shall have received a
favorable written opinion of (i) McAfee and Taft A
Professional Corporation, counsel for the Borrower and the
Subsidiary Guarantors, to the effect set forth in Exhibit
B-1, and (ii) Sidley & Austin, counsel to the Administrative
Agent, to the effect set forth in Exhibits B-2, in each case
(A) dated the Supplemental Term Loan Closing Date, (B)
addressed to the Administrative Agent, the Issuing Lender,
the Lenders and the Collateral Agent and (C) covering such
other matters incidental to the Loan Documents and the
Transactions as the Administrative Agent shall request."
(o) Each reference to "Maturity Date" in Section
6.04(h) is changed to "Supplemental Maturity Date."
(p) Section 6.10(c) of the Credit Agreement is amended
in its entirety to read as follows:
"(c) Without limiting the generality of paragraphs (a)
and (b) above, cause each Subsidiary that shall deliver a
guarantee pursuant to Section 4.17 of the 2000 Subordinated
Note Indenture and each Subsidiary that shall deliver a
guarantee pursuant to Section 4.18 of the 2006 Subordinated
Note Indenture to become (to the extent not already a party
thereto) a Subsidiary Guarantor under the Guarantee
Agreement pursuant to one or more instruments or agreements
substantially in the form of Annex 1 to the Guarantee
Agreement."
(q) The references to "Maturity Date" in Section 7.03
and Section 7.05(d)(ii) are changed to "Supplemental Maturity
Date."
(r) The first sentence of Article VII of the Credit
Agreement is amended in its entirety to read as follows:
"The Borrower covenants and agrees with each Lender,
the Administrative Agent and the Issuing Lender that,
so long as the principal of or interest on any Loan or
LC Disbursement, any Fees or any other expenses or
amounts payable under any Loan Document shall be
unpaid, unless the Required Lenders shall otherwise
consent in writing and except as so provided in Section
7.17, the Borrower shall not and shall not permit any
of the Subsidiaries to, directly or indirectly:"
(s) Section 7.01(i) of the Credit Agreement is amended
in its entirety to read as follows:
"(i) In the case of any Subsidiary, any guarantee
delivered or incurred pursuant to Section 4.17 of the
2000 Subordinated Note Indenture or Section 4.18
of the 2006 Subordinated Note Indenture."
(t) Section 7.05(b) of the Credit Agreement is amended
in its entirety to read as follows:
"(b) the Borrower and any Subsidiary may sell,
transfer or otherwise dispose of used or surplus
equipment, vehicles and other assets in the ordinary
course of business (to the extent that the Borrower
shall have complied with the provisions of Section
2.13(c)) and the Collateral Agent shall release its
lien or security interest on any property so sold,
transferred or otherwise disposed of;"
(u) Section 7.09(a) is amended in its entirety to read
as follows:
"(a) Optionally prepay, repurchase or redeem or
otherwise defease or segregate funds with respect to
any Specified Permitted Debt, the Subordinated Notes or
any guarantee delivered in accordance with Section 4.17 of
the 2000 Subordinated Note Indenture or Section 4.18 of the
2006 Subordinated Note Indenture."
(v) Section 7.09(b) is amended in its entirety to read
as follows:
"(b) Permit any amendment or modification to the terms
of any Specified Permitted Debt, the Subordinated Notes, the
Subordinated Note Indentures or any guarantee delivered or
incurred pursuant to Section 4.17 of the 2000 Subordinated
Note Indenture or Section 4.18 of the 2006 Subordinated Note
Indenture if the effect of such amendment or modification is
to impose additional increased scheduled or mandatory
repayment, retirement, repurchase or redemption obligations
in respect of such Indebtedness or to require any scheduled
or mandatory payment to be made in respect of such
Indebtedness prior to the date that such payment would
otherwise be due."
(w) Section 7.09(e) is amended in its entirety to read
as follows:
"(e) Deliver any notice to the trustee under the 2000
Subordinated Note Indenture, the trustee under the 2006
Subordinated Note Indenture, or the holders of the
Subordinated Notes of its offer to purchase any of the
Subordinated Notes under Section 4.13 of the 2000
Subordinated Note Indenture or Section 4.12 of the 2006
Subordinated Note Indenture."
(x) Each reference to "Subordinated Note Indenture" in
Section 7.10 and Section 7.13 is changed to "Subordinated Note
Indentures".
(y) Section 7.11(b) (ii) is amended in its entirety to
read as follows:
"(ii) each Capital Lease Obligation entered prior
to the effective date of Amendment No. 1 (other than
(i) any Capital Lease Obligation set forth on Schedule
7.11(a) and (ii) any Capital Lease Obligation the
Indebtedness in respect of which is less than $100,000)
at the time of its incurrence shall have an average
life to maturity greater than the average life to
maturity of the outstanding Term Loans and Acquisition
Loans and each Capital Lease Obligation entered on or
after the effective date of Amendment No. 1 shall have
an initial term of at least five years or an average
life to maturity greater than the average life to
maturity of the outstanding Term Loans and Acquisition
Loans.
(z) The following new Section 7.17 is added following
Section 7.16 of the Credit Agreement:
"SECTION 7.17. 2006 Subordinated Notes.
Notwithstanding any other provisions hereof to the
contrary, the Borrower may enter into the 2006
Subordinated Note Indenture and issue the 2006
Subordinated Notes. In addition, notwithstanding the
terms of Section 7.09(d), the Borrower may pay to each
of the holders of the 2000 Subordinated Notes who
tenders a 2000 Subordinated Note in response to the
Tender Offer a premium, provided that the aggregate
amount of the premium paid to all such holders shall
not exceed $6,000,000."
(aa) Subsection (q) of Article VIII of the Credit
Agreement is amended in its entirety to read as follows:
"(q) the Obligations and the guarantees thereof
pursuant to the Guarantee Agreement shall cease to
constitute, or shall be asserted by the Borrower or any
Subsidiary not to constitute, senior indebtedness under
the subordination provisions of the Subordinated Notes
and of all other subordinated Indebtedness (including
any guarantee delivered or incurred in accordance with
Section 4.17 of the 2000 Subordinated Note Indenture or
Section 4.18 of the 2006 Subordinated Note Indenture)
of the Borrower or any Subsidiary or such subordination
provisions shall be invalidated or otherwise cease to
be a legal, valid and binding obligation of the parties
thereto, enforceable in accordance with their terms:
or"
(bb) The reference to "Subordinated Note Indenture" in
Section 10.20 of the Credit Agreement is changed to "Subordinated
Note Indentures".
SECTION 3. Amendment of Schedule 2.01. Schedule 2.01
to the Credit Agreement is amended by deleting such schedule in
its entirety and substituting in its place the revised Schedule
2.01 attached hereto as Exhibit A.
SECTION 4. Representations and Warranties. The
Borrower represents and warrants to each of the Lenders, the
Administrative Agent and the Issuing Lender that:
(a) This Amendment has been duly authorized, executed
and delivered by it and constitutes its legal, valid and
binding obligation, enforceable in accordance with its
terms except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity
(regardless of whether such enforceability is considered in
a proceeding at law or in equity).
(b) Before and after giving effect to this Amendment,
the representations and warranties set forth in Article IV
of the Credit Agreement are true and correct in all material
respects with the same effect as if made on the date hereof,
except to the extent such representations and warranties
expressly relate to an earlier date.
(c) Before and after giving effect to this Amendment,
no Event of Default or Default has occurred and is
continuing.
SECTION 5. Conditions to Effectiveness. The
amendments to the Credit Agreement set forth in this Amendment
shall become effective as of the date first above written when
(i) the Administrative Agent shall have received counterparts of
this Amendment that, when taken together, bear the signatures of
the Borrower, the Subsidiary Guarantors, the Required Lenders and
(to the extent not included in the Required Lenders) each Lender
that is to have a Supplemental Term Loan Commitment and (ii) the
Administrative Agent shall have received the Patent Security
Agreement.
SECTION 6. Reaffirmation. The Borrower reaffirms, and
by acknowledging this Amendment in the space provided below each
Subsidiary Guarantor reaffirms, its obligations under each Loan
Document (including without limitation the Guarantee Agreement)
to which it is a party, which Loan Documents remain in full force
and effect.
SECTION 7. Credit Agreement. Except as specifically
amended hereby, the Credit Agreement shall continue in full force
and effect in accordance with the provisions thereof as in
existence on the date hereof. After the date hereof, any
reference to the Credit Agreement shall mean the Credit Agreement
as amended hereby.
SECTION 8. Applicable Law. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 9. Counterparts. This Amendment may be
executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall
constitute but one contract.
SECTION 10. Expenses. The Borrower agrees to
reimburse the Administrative Agent for its reasonable
out-of-pocket expenses in connection with this Amendment,
including the reasonable fees, charges and disbursements of
Sidley & Austin, counsel for the Administrative Agent.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized
officers as of the day and year first written above.
FOODBRANDS AMERICA, INC.,
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
CHEMICAL BANK, individually, as
Administrative Agent, as Collateral Agent
and as Issuing Lender,
By: /s/ Edward Devine
Name: Edward Devine
Title: Managing Director
CITIBANK, N.A., individually and as
Managing Agent,
By:/s/ Jeroen Fikke
Name: Jeroen Fikke
Title: Vice President
CREDIT LYONNAIS - Cayman Islands Branch
By:/s/ Frederick Haddad
Name: Frederick Haddad
Title: Authorized Signature
CREDIT LYONNAIS - New York Branch
By:/s/ Frederick Haddad
Name: Frederick Haddad
Title: Senior Vice President
FIRST BANK NATIONAL
ASSOCIATION,
By:/s/ Bradley R. Sprang
Name: Bradley R. Sprang
Title: Commercial Banking Officer
THE FIRST NATIONAL BANK OF
BOSTON,
By:/s/ Peter R. White
Name: Peter R. White
Title: Managing Director
HELLER FINANCIAL, INC.,
By:/s/ Linda W. Wolf
Name: Linda W. Wolf
Title: Senior Vice President
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., CHICAGO BRANCH,
By:/s/ Armund J. Schoen, Jr.
Name: Armund J. Schoen, Jr.
Title: Vice President and Deputy
General Manager
THE MITSUBISHI TRUST AND
BANKING CORPORATION,
By:/s/ Patricia Loret de Mola
Name: Patricia Loret de Mola
Title: Senior Vice President
NATIONSBANK OF TEXAS, N.A.,
By:/s/ Perry B. Stephenson
Name: Perry B. Stephenson
Title: Senior Vice President
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR,
By:/s/ Peter Karl Harris
Name: Peter Karl Harris
Title: Vice President
By:/s/ William C. Maier
Name: William C. Maier
Title: VP-Group Manager
LIBERTY BANK AND TRUST
COMPANY OF OKLAHOMA CITY, N.A.,
By:/s/ Laura Christofferson
Name: Laura Christofferson
Title: Vice President
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLANDS
BRANCHES,
By:/s/ Stephan A. Wiedemann
Name: Stephan A. Wiedemann
Title: Vice President
By:/s/ Thomas A. Foley
Name: Thomas A. Foley
Title: Assistant Vice President
BANQUE PARIBAS,
By:/s/ Pierre-Jean de Filippis
Name: Pierre-Jean de Filippis
Title: General Manager
By:/s/ Rosemary Davis
Name: Rosemary Davis
Title: Vice President
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST,
By:/s/ Jeffrey W. Maillet
Name: Jeffrey W. Maillet
Title: Sr. Vice Pres. - Portfolio
Mgr.
RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS B.V.
By: Chancellor Senior Secured
Management, Inc. as Portfolio Advisor
By:/s/ Gregory L. Smith
Name: Gregory L. Smith
Title: Vice President
STICHTING RESTRUCTURED
OBLIGATIONS BACKED BY SENIOR
ASSETS 2 (ROSA2)
By: Chancellor Senior Secured
Management, Inc. as Portfolio Advisor
By: /s/ Gregory L. Smith
Name: Gregory L. Smith
Title: Vice President
AERIES FINANCE LTD.,
By: /s/ Andrew Ian Wifnall
Name: Andrew Ian Wifnall
Title: Director
CHEMICAL BANK,
By: /s/ Matthew B. Fahey
Name: Matthew B. Fahey
Title: Vice President
ACKNOWLEDGED AND AGREED TO:
RKR-GP, INC.
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
CONTINENTAL DELI FOODS, INC.
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
SPECIALTY BRANDS, INC., formerly known as
DOSKOCIL SPECIALTY BRANDS COMPANY
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
FBAI INVESTMENTS CORPORATION
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
BRENNAN PACKING CO., INC.
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
NATIONAL SERVICE CENTER, INC.
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
DOSKOCIL FOOD SERVICE COMPANY, L.L.C.
by Continental Deli Foods, Inc., Member
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
KPR HOLDINGS, L.P.
by RKR-GP, INC.,
General Partner
By:/s/ Bryant P. Bynum
Name: Bryant P. Bynum
Title: Vice President
THIRD AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO STOCK PURCHASE AGREEMENT is
dated as of the 1st day of June, 1996 (the "Third Amendment") by
and among Foodbrands America, Inc. ("Foodbrands"), TNT Crust,
Inc. n/k/a Doskocil Food Service Company, L.L.C. ("TNT" or the
"Company"), and Morgan Stanley Capital Partners III, L.P. for
itself and as Agent for Roger LeBreck, MSCP III 892 Investors,
L.P., Morgan Stanley Capital Investors, L.P., BT Investment
Partners, Inc., JSS Management Company, Ltd., Horst W. Schroeder,
Trustee of the Living Trust of Horst W. Schroeder dated May 24,
1985, or successor trustee and 780 Partners, a Wisconsin general
partnership, shareholders of TNT (hereinafter referred to
collectively as the "Shareholders"), with reference to the
following circumstances:
A. Foodbrands, TNT and the Shareholders entered into
that certain Stock Purchase Agreement dated as of November 22,
1995, as amended by that First Amendment to Stock Purchase
Agreement dated as of December 11, 1995, as further amended by
that Second Amendment to Stock Purchase Agreement dated as of
December 14, 1995 (the "Agreement").
B. Foodbrands, TNT and the Shareholders mutually
desire to further amend the Agreement.
C. It is to the mutual benefit of Foodbrands, TNT and
the Shareholders to further amend the Agreement.
NOW THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements set forth herein, Foodbrands,
TNT and the Shareholders further amend the Agreement as follows:
1. The Amendments. The Agreement is hereby amended
as follows:
(a) Section 2.01(c) of the Agreement is hereby
deleted in its entirety and replaced with the following:
(c) The Earnout Payment. The Earnout
Payment shall be equal to (i) the sum of the
Net Sales (as herein defined) of the Company
to Papa John's International ("Papa John's")
and Mazzio's Corporation ("Mazzio's") and
their successors or assigns during the
Applicable Period multiplied by (ii) 2.03
(the product obtained by multiplying (x)
seven and (y) 29.0%), provided, however, such
amount shall not exceed Six Million Five
Hundred Thousand Dollars ($6,500,000.00).
(b) Section 2.02 of the Agreement is amended as
follows:
(i) the defined term "Applicable EBITDA
Percentage" shall be deleted in its entirety
and
(ii) the defined term "EBITDA" shall be
deleted in its entirety.
(c) The second sentence of Section 2.04(c) of the
Agreement is hereby deleted in its entirety and replaced
with the following:
The Earnout Payment Statements shall be
prepared in accordance with Section 2.05 and
shall consist of a balance sheet, a statement
of operations and a listing of sales during
the period to Papa John's and Mazzio's during
(i) the current period, and (ii) the previous
eleven (ll) periods once twelve (12) periods
have elapsed since the Closing Date.
(d) The second sentence of Section 2.05 of the
Agreement is hereby deleted in its entirety and replaced
with the following:
Notwithstanding the foregoing, for the
purposes of calculating the components of the
Earnout Payment with respect to intercompany
transactions between the Company and
subsidiaries or divisions of Foodbrands and
the relocation of production facilities and
capacities from or to the Company's
facilities, the revenues and expenses to be
allocated to the Company shall be as agreed
between Foodbrands and Agent from time to
time.
(e) Section 11.12 of the Agreement is amended as
follows:
(i) the defined term "Applicable EBITDA
Percentage" shall be deleted in its
entirety, and
(ii) the defined term "EBITDA" shall be
deleted in its entirety.
2. The Agreement. The term "Agreement" as used in
the Agreement and this Third Amendment shall hereinafter mean the
Agreement as further amended by this Third Amendment. The
Agreement, as further amended hereby, shall continue in full
force and effect and in accordance with the terms thereof.
3. Governing Law. This Third Amendment shall be
governed by and construed in accordance with the laws of the
State of Wisconsin.
4. Counterparts. This Third Amendment may be
executed in one or more counterparts, all of which shall be
considered one in the same instrument, and shall become effective
when one or more counterparts have been signed by each of the
parties and delivered to the other parties.
IN WITNESS WHEREOF, the parties have caused this
Amendment to be duly executed on the date first above written.
"FOODBRANDS" FOODBRANDS AMERICA, INC.
By:/s/ R. Randolph Devening
R. Randolph Devening
Chairman, President and
Chief Executive Officer
"THE COMPANY" TNT CRUST, INC.
n/k/a DOSKOCIL FOOD SERVICE
COMPANY, L.L.C.
By: /s/ William L. Brady
Vice-President
"SHAREHOLDERS" MORGAN STANLEY CAPITAL PARTNERS
III, L.P. FOR ITSELF AND AS AGENT
FOR ROGER LEBRECK, MSCP III 892
INVESTORS, L.P., MORGAN STANLEY
CAPITAL INVESTORS, L.P., BT
INVESTMENT PARTNERS, INC., JSS
MANAGEMENT COMPANY, LTD., HORST W.
SCHROEDER, TRUSTEE OF THE LIVING
TRUST OF HORST W. SCHROEDER DATED
MAY 24, 1985, OR SUCCESSOR TRUSTEE
AND 780 PARTNERS, A WISCONSIN
GENERAL PARTNERSHIP
By: /s/ Lawrence B. Sorrel
Lawrence B. Sorrel, Vice President
of Morgan Stanley Capital Partners
III, Inc., the General Partner of
MSCP III, L.P., its General Partner
LEASE AGREEMENT
WITH
OPTION TO PURCHASE
THIS LEASE AGREEMENT WITH OPTION TO PURCHASE (this
"Lease") is entered into as of June 3, 1996, between THORN APPLE
VALLEY, INC., a Michigan corporation ("Landlord"), and
CONTINENTAL DELI FOODS, INC., a Delaware corporation ("Tenant"),
with respect to the following:
(i) On or about May 30, 1995, Landlord acquired from
Concordia Foods Corporation, a Delaware corporation
("Concordia"), an affiliate of Tenant, the Facility pursuant to
an Asset Purchase Agreement dated as of April 29, 1995, by and
among Landlord, as purchaser, and Doskocil Companies,
Incorporated, a Delaware corporation, Wilson Foods Corporation, a
Delaware corporation, Concordia, Dixie Foods Company, a Delaware
corporation, and Shreveport Foods Company, a Delaware
corporation, collectively as sellers (the "Purchase Agreement");
(ii) Landlord has had title to and possession of the
Facility since May 30, 1995 (the "Acquisition Date");
(iii) Tenant desires to lease the Facility from Landlord
and obtain from Landlord an option to purchase the Facility, and
Landlord desires to lease the Facility to Tenant and grant to
Tenant an option to purchase the Facility.
NOW THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. DEMISE OF PREMISES. Landlord hereby leases to
Tenant, and Tenant hereby leases from Landlord, on all of the
terms and conditions in this Lease, the real and personal
property described in this Section 1 (collectively, the
"Facility").
1.1 Land. All of Seller's right, title, and
interest in and to the real property described on Schedule 1.1
hereto and all improvements thereon and appurtenances thereto and
all interest, if any, of Landlord in strips or gores, if any,
between the tract and abutting properties and any land lying in
or under any street, alley, road, or right-or-way, opened or
proposed, abutting or adjacent to the tract (the "Land").
1.2 Machinery and Equipment. All of Seller's
right, title and interest in and to the furniture, fixtures,
machinery, equipment, tooling, and tools currently at the
Facility, whether or not listed on Schedule 1.2, and the
additional items of machinery and equipment listed on Schedule
1.2 to be delivered, at Tenant's option, either to the Facility
or to Tenant's plant in Cherokee, Iowa prior to the commencement
of the term of this Lease (collectively, the "Machinery and
Equipment").
1.3 Books and Records. Copies of all of the
operating data and records of the Facility, including, without
limitation, copies of books, records, technical and repair data
and manuals.
2. LANDLORD'S REPRESENTATIONS AND WARRANTIES. To
induce Tenant to enter into this Lease and accept possession of
the Facility, Landlord represents and warrants to Tenant as
follows:
2.1 Organization and Qualification. Landlord
is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Michigan and has the
requisite corporate power and authority to carry on its business
as it is now being conducted. Landlord is duly qualified to do
business and in good standing as a foreign corporation in
Missouri.
2.2 Due Authorization. Landlord has full
corporate power and authority to enter into and perform this
Lease and to consummate the transactions contemplated hereby.
The execution, delivery, and performance by Landlord of this
Lease have been, and the execution, delivery, and performance by
Landlord of all other agreements and transactions contemplated
hereby and thereby have been or prior to Closing will be, duly
authorized and approved by all requisite corporate action on the
part of Landlord. This Lease has been, and the other agreements
contemplated hereby, when executed, will be, duly executed and
delivered by Landlord and, assuming the due authorization,
execution, and delivery hereof and thereof by the other parties
hereto or thereto, this Lease constitutes and, when executed,
each of the other agreements contemplated hereby will constitute,
a valid and binding obligation of Landlord, enforceable against
Landlord in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance, and similar laws affecting creditors' rights
generally from time, to time and to general principles of equity.
2.3 No Violation. The execution, delivery, and
performance by Landlord of this Lease and the other agreements
and transactions contemplated hereby and thereby will not cause
Landlord to violate any provision of its Articles of
Incorporation or Bylaws. Except as described on Schedule 2.3
hereto, Landlord is not subject to or obligated under any
provision of (i) any contract, indenture, deed of trust,
mortgage, loan agreement or other instrument or other agreement,
(ii) any license, franchise or permit, or (iii) any law (other
than laws applicable to bulk sales transactions compliance with
which is waived by Tenant under Section 24.7), rule, regulation,
order, judgment, or decree, which would be breached or violated
or in respect of which a right of termination or acceleration or
any encumbrance, charge, or lien on any portion of the Facility
would be created by Landlord's execution, delivery, and
performance of this Lease or the other agreements and
transactions contemplated hereby and thereby except for
those breaches, defaults, and violations that would not have a
material affect on the Facility.
No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or
regulatory authority or other person or entity (whether or not
governmental) is required in connection with this Lease and the
consummation of the transactions contemplated hereby, except as
described on Schedule 2.3 hereof.
2.4 Permits. To Landlord knowledge, there are
no permits, licenses, or other approvals of any kind required by
any governmental authority in connection with the use and
occupancy of the Facility as a food processing plant, except
those required prior to the Acquisition Date and those listed on
Schedule 2.4 hereto (the "Permits"). Landlord has not received
notification of the violation, revocation, or nonrenewal, nor has
it received notice of threatened revocations or nonrenewals, of
any material Permit, and to the knowledge of Landlord (i) no
violation of any of the Permits has occurred at any time since
the Acquisition Date that would result in a material adverse
effect on the operation of the Facility or the business of the
Facility, (ii) all the material Permits are in full force and
effect, and (iii) no action has been taken since the Acquisition
Date by Landlord which would constitute a violation of any of the
Permits.
2.5 Title. Title to the Facility is in the
same state in all material respects as it was on the Acquisition
Date. Except as set forth in Schedule 2.5 and the Permitted
Exceptions described in Section 6.4, Landlord owns good and
marketable indefeasible title to all of the Facility, in each
case subject to no liens, mortgages, pledges, privileges, adverse
claims, security interest, encumbrances, or charges of any kind.
Schedule 1.2 lists all items of machinery and equipment at the
Facility or to be delivered, at Tenant's option, either to the
Facility or to Tenant's plant in Cherokee, Iowa prior to the
commencement of the Term.
2.6 Packaging Equipment. Landlord has
delivered to Tenant a complete and accurate copy of the agreement
pursuant to which Landlord used the packaging film equipment at
the Facility (the "Packaging Equipment Agreement"), which is in
full force and effect. Neither Landlord nor, to Landlord's
knowledge, the other party to the Packaging Equipment Agreement
is in default thereunder or would be in default with the giving
of notice or passage of time or both.
2.7 Condition of Facility.
2.7.1 Condition of the Facility. To
the best of Landlord's knowledge, the Facility is in the same
general state as it was on the Acquisition Date, ordinary wear
and tear excepted. Except as expressly otherwise set forth in
this Lease, the Facility shall be leased to Tenant, on an "AS IS,
WHERE IS," BASIS, WITHOUT ANY REPRESENTATION OR WARRANTY
WHATSOEVER, EITHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, AS TO THE
CONDITION OF SUCH PROPERTY OR FITNESS OF SUCH PROPERTY FOR ANY
PARTICULAR OR GENERAL USE OR PURPOSE OR FOR TENANT'S OR
LANDLORD'S BUSINESS OR AS TO MATERIALITY, MERCHANTABILITY, OR
VALUE OF THE FACILITY. LANDLORD HEREBY EXPRESSLY DISCLAIMS ANY
AND ALL WARRANTIES AND REPRESENTATIONS MADE TO TENANT BY ANY
PERSON, WHETHER RELATING TO THE CONDITION, THE OPERATION OR
OTHERWISE OF THE FACILITY, EXCEPT AS HEREIN EXPRESSLY SET FORTH.
2.7.2 Utilities. Adequate public sani-
tary and storm sewers, public water facilities, and other public
utilities necessary to operation of the Facility are installed
and operational to the same extent as on the Acquisition Date.
All utilities enter such property either through adjoining public
streets or within recorded easements. To Landlord's knowledge,
there has not been any notification of any increase or proposed
increase in the rates charged for the utilities from the rates
currently in effect.
2.7.3 Compliance. Landlord has not re-
ceived any notification or other document from any governmental
authority or any other person regarding any alleged violation of,
or that Landlord may have liability under any Environmental Laws
or applicable zoning, building, or other law, ordinance, code, or
regulation involving the Facility, except where the failure to
comply with such notification or document would not have a
material adverse effect on the use by Tenant of the Facility.
2.8 Commissions. No broker or finder has acted
directly or indirectly for Landlord in connection with this Lease
or the transactions contemplated hereby, and no broker or finder
is entitled to any brokerage or finder's fee or other commission
in respect thereof based in any way on agreements, arrangements,
or understandings made by or on behalf of Landlord.
2.9 Legal Proceedings, Defaults. There is no
legal, administrative, arbitration, or other proceeding pending
or outstanding order, writ, injunction, or decree of any court,
government or governmental authority or arbitration, of which
Landlord has notice (or to the knowledge of Landlord, which has
been threatened), against Landlord or relating to the Facility
which, if resolved against Landlord, would have a material
adverse effect on the Facility. Landlord has not received notice
of any default under any contract or agreement binding upon it,
the effect of which would have a material adverse affect on the
Facility.
2.10 No Condemnation. Landlord is not aware of
any pending or threatened condemnation of any portion of any of
the Facility.
2.11 No Notice of Violations. Landlord has not
received notice of any alleged failure of Landlord to comply with
any applicable governmental requirements in respect of the use or
occupation of the Facility, including, but not limited to,
environmental, zoning, platting, and other land use requirements
which have not been heretofore corrected to the satisfaction of
the appropriate governmental authority, and Landlord has not
received notice of or does not have knowledge of any violations
or investigations relating to any such governmental requirement.
Landlord has not received advice from any of its mortgagees or
from any insurer of the Facility or any part thereof requesting
any improvements, alterations, additions, corrections, or other
work in, on, or about the Facility. Landlord will promptly
notify Tenant if Landlord receives any such notice.
2.12 No Defaults. Landlord has not received no-
tice that it has committed any default or breach of any
covenants, conditions, restrictions, rights-of-way, or easements
which pertain to the Facility or any portion thereof, and to
Landlord's knowledge no such default or breach now exists.
2.13 Special Assessment. No special or general
assessments have been levied against all or any part of the
Facility, nor to Landlord's knowledge have any such assessments
been threatened.
2.14 Information Correct. To the best of Land-
lord's knowledge, the lists, documents, data, and information re-
quired to be delivered by Landlord to Tenant pursuant to this
Lease are materially complete and correct. Landlord shall
promptly inform Tenant of any material changes in the condition
of the Facility not reflected in said documentation.
2.15 Public Improvements. No notices issued
since the Acquisition Date calling attention to the need for any
unperformed curbing, recurbing, paving, repaving, or other
construction, improvements, or work on or about the Facility or
any streets or roads abutting the Facility, or the removal of any
nuisance from the Facility or any of the foregoing are
outstanding. All street paving, curbing, sewer installation, or
other public improvements constructed or installed at the
Facility since the Acquisition Date or that have been ordered to
be constructed or installed since the Acquisition Date and for
the cost of which the Facility is assessable have been paid for
and will not be assessed and all assessments have been paid in
full.
2.16 Taxes. For the year 1996 and subsequent
years, Landlord has not received notice of any proposed increase
in the assessed valuation of the Facility or any portion thereof.
2.17 Assessed Value. The assessed values for
real estate ad valorem and taxes on the Facility for year 1995
which assessments have been made on a fully completed building
basis are set forth on Schedule 2.17.
2.18 Zoning Notices. The zoning classification
of the Facility is Industrial.
2.19 Landlord Not a Foreign Person. Landlord is
not a foreign person as defined in Section 1445(f)(3) of the
Internal Revenue Code of 1986, as amended.
2.20 Environmental Warranties. Since the
Acquisition Date there has been no release at the Facility of any
Hazardous Materials. To the knowledge of Landlord, the Facility
is free of friable asbestos and is free of PCB's, and does not
have levels of radon gas requiring abatement or remediation.
2.21 Receipt of Notification. If Landlord has
received a notification or other document stating that there has
been a violation, default, or problem with respect to any matter
described in Section 2 (including, for example, with respect to
Environmental Laws, utilities, zoning assessments, or other mat-
ters) and the alleged violation, default, or problem related to
matters arising prior to the Acquisition Date, Tenant shall
accept the Facility subject to such notice or other document.
To the best of Landlord's knowledge, no fact,
condition, or occurrence exists or has occurred that is related
in any way to the Facility (except as may have existed prior to
the Acquisition Date) that would afford any governmental agency
or any other person the right to require abatement or remediation
under the Environmental Laws or obtain relief of any material
kind under the Environmental Laws from Landlord or Tenant. To
Landlord's knowledge, Landlord has delivered to Tenant full,
accurate, and complete copies of any and all reports, studies,
tests, and other information in Landlord possession relating to
the issue of the presence or suspected presence of any Hazardous
Materials at the Facility. Landlord shall promptly following its
receipt thereof, furnish to Tenant full, accurate, and complete
copies of any such reports, studies, tests, and other information
hereafter obtained by Landlord.
3. TENANT'S REPRESENTATIONS AND WARRANTIES. To
induce Landlord to enter into this Lease, Tenant represents and
warrants to Landlord as follows:
3.1 Organization and Qualification. Tenant is
a corporation duly organized, validly existing, and in good
standing under the laws of Delaware and has the requisite
corporate power and authority to carry on its business as it is
now being conducted. Tenant is duly qualified to do business and
in good standing as a foreign corporation in the state of
Missouri.
3.2 Due Authorization. Tenant has full
corporate power and authority to enter into and perform this
Lease and all other agreements and to consummate the transactions
contemplated hereby and thereby. The execution, delivery, and
performance by Tenant of this Lease has been, and the execution,
delivery, and performance by Tenant of all other agreements and
transactions contemplated hereby have been duly authorized and
approved by all requisite corporate action on the part of Tenant.
This Lease has been, and the other agreements contemplated
hereby, when executed, will be, duly executed and delivered by
Tenant and, assuming the due authorization, execution, and
delivery hereof and thereof by the other parties hereto and
thereto, this Lease constitutes and, when executed, each of the
other agreements contemplated hereby will constitute, a valid and
binding obligation of Tenant, enforceable against Tenant in
accordance with its terms subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance,
and similar laws affecting creditors' rights generally from time
to time, and to general principles of equity.
3.3 No Violation. The execution, delivery, and
performance by Tenant of this Lease and the other agreements and
transactions contemplated hereby will not cause Tenant to violate
any provision of its Certificate of Incorporation or Bylaws.
Tenant is not subject to or obligated under any provisions of (i)
any contract, indenture, deed of trust, mortgage, loan agreement,
or other agreement, (ii) any license, franchise, or permit, or
(iii) any law, rule, regulation, order, judgment, or decree,
which would be breached or violated or in respect of which a
right of termination or acceleration or any encumbrance, charge,
or lien on any portion of the Facility would be created by
Tenant's execution, delivery, and performance of this Lease or
the other agreements and transactions contemplated hereby. No
consent, approval, or authorization of, or declaration, filing,
or registration with, any governmental or regulatory authority or
other person or entity (whether or not government) is required in
connection with the execution and delivery of this Lease and the
consummation of the transactions contemplated hereby.
3.4 Commissions. No broker or finder has acted
directly or indirectly for Tenant in connection with this Lease
or any other agreement or the transactions contemplated hereby or
thereby, and no broker is entitled to any brokerage or finder's
fee or other commission in respect thereof based in any way on
agreements, arrangements or understandings made by or on behalf
of Tenant.
4. USE OF FACILITY; QUIET ENJOYMENT. Tenant may
occupy and use the Facility for any lawful purpose. Landlord
warrants peaceful and quiet occupation and enjoyment of the
Facility by Tenant.
5. TERM. The term of this Lease (the "Term") shall
commence on June 3, 1996, the date on which Landlord shall
deliver possession of the Facility, and shall expire on May 31,
1997.
6. RENT.
6.1 Deposit. Landlord acknowledges the receipt
from Tenant of a deposit of $100,000. Upon the performance by
Landlord of its obligations described in Section 6.4, Tenant
shall pay Landlord the additional deposit of $400,000. These
amounts shall be referred to as the "Deposit". The Deposit shall
be nonrefundable except as provided in this Lease. Landlord
shall be entitled to retain and fully and immediately enjoy the
Deposit after satisfying the requirements of Section 6.4 of this
Lease.
6.2 Base Rent. Tenant shall pay base rent in
the amount of $13,333.33 in advance on the first day of the Term
and on the same day of each succeeding calendar month during the
Term (the "Base Rent").
6.3 Additional Rent. Tenant shall pay when
due, as additional rent, all real and personal property taxes
that relate to the Facility, and the cost of all utilities, and
all other amounts, liabilities, and obligations that relate to
Tenant's operation of the Facility. Tenant shall also pay to
Landlord on demand, as additional rent, interest at the rate of
the "prime rate" announced from time to time by Chemical Bank,
plus 2% (but not exceeding the maximum amount permitted by law)
on all overdue installments of Basic Rent and on all overdue
amounts of additional rent relating to obligations that Landlord
shall have paid on behalf of Tenant, in either case, from the due
date thereof until paid in full.
6.4 Landlord's Obligations.
6.4.1 Surveys. Within 30 days after
the date of this Lease, Landlord, at its expense, shall deliver
to Tenant six copies of a plat of a survey of the Land. The
survey shall be performed by Archer Engineers or another licensed
surveyor reasonably acceptable to Landlord and Tenant. The plat
shall be dated no earlier than 30 days prior to the date of this
Lease and shall be certified to Landlord, Tenant, any lender
designated by Tenant, and the Title Company (as defined below) as
having been made in compliance with applicable law and in
accordance with the Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys or substantially equivalent Missouri
standards. The plat shall show flood zone designation, all
improvements in addition to buildings, visible and recorded
easements, indication of access to a public way such as curb cuts
and driveways, recorded rights-of-way, encroachments, and total
area. The legal description of the real property on the plat
shall coincide exactly with the legal description in the Title
Commitment (as defined below). Anything herein to the contrary
notwithstanding, a plat that shows materially the same matters as
the plat prepared by Archer Engineers dated May 26, 1995, in
connection with the acquisition of the Facility by Landlord shall
be acceptable to Tenant.
6.4.2 Title Review/UCC Searches.
Within 15 days after the date of this Lease, Landlord, at its
expense, shall deliver to Tenant a commitment for an owner's
policy of title insurance for the Land (the "Title Commitment")
along with copies of all documents described in the Title
Commitment that are the basis for exceptions to coverage and
complete and accurate copies of all recorded and unrecorded real
property agreements, easements, rights-of-way agreements,
restrictive covenants, and encumbrances relating to the Facility
that are in the possession of Landlord or of which Landlord is
aware and to which it has access (the "Underlying Documents").
The commitment shall be issued by Chicago Title Insurance Company
or another title insurance company reasonably acceptable to
Landlord and Tenant (the "Title Company") and shall be dated no
earlier than 30 days prior to the date of this Lease. The
commitment shall name Tenant as the proposed insured and pro-
vide for coverage in the amount of the Purchase Price with
standard exceptions deleted and zoning endorsements. Tenant
shall have a period (the "Review Period") ending five days after
the date on which Tenant receives the Title Commitment, the
Underlying Documents, the plat, and the tax lien and UCC searches
described below in which to notify Landlord of any objections
Tenant has to any Major Title Defects (as defined below)
disclosed in the Title Commitment and the plat, as well as Minor
Title Defects (as defined below). Any Major Title Defects or
Minor Title Defects that are disclosed in the Title Commitment or
the plat to which Tenant does not object in writing within the
Review Period or which Tenant subsequently waives shall be deemed
to be permitted exceptions to the status of Landlord's title (the
"Permitted Exceptions"). With regard to Major Title Defects to
which Tenant does object within the Review Period, Landlord shall
have 15 days after receipt of Tenant's written objections in
which to cure such objections or secure the undertaking of the
Title Company to insure Tenant against such matters. If Landlord
is unable or elects not to cure such objections or obtain a
commitment for insurance against such matters, Tenant, at its
option, may terminate this Lease on ten days notice, in which
event Landlord shall immediately return the Deposit. With
respect to Minor Title Defects to which Tenant does object within
the Review Period, Landlord shall use reasonable efforts to cure
or remove such matters within 60 days. However, Tenant shall
have no right to terminate this Lease on the basis of Minor Title
Defects.
The term "Major Title Defect" means any condition of
title that arose on or after the Acquisition Date and that will
materially interfere with Tenant's operation of the Facility in
the manner in which Landlord has operated such Facility over the
past twelve months, including, without limitation: (i) any
encroachment of an improvement on the real estate that is not
part of a Facility for which Tenant cannot obtain insurance
against forced removal of the encroaching portion of the
improvement; (ii) any defect in Landlord's chain of title which
would prevent Landlord from being able to convey marketable title
in fee simple at the Closing; (iii) any lack of access or
easements necessary to allow continued operation of the Facility
in the manner in which Landlord operated the Facility; (iv)
material violations of zoning laws or regulations; and (v) any
lien, claim, or encumbrance securing an obligation. Any Major
Title Defect shall be determined and cured in accordance
with the title examination standards of the state of Missouri.
"Minor Title Defects" means any deficiency of title that arose
on or after the Acquisition Date and that is not a Major Title
Defect.
Permitted Exceptions shall also include real estate
taxes for the year of the closing and subsequent years (which
shall be prorated in accordance with this Lease) and those
matters that are disclosed in the commitment and plat to which
Tenant consents or which Tenant waives pursuant to this Lease.
6.4.3 UCC and Tax Searches. Within 15
days after the date of this Lease, Landlord, at its expense,
shall deliver to Tenant appropriate tax lien and UCC searches
showing no security interests, liens, or encumbrances on any
portion of the Facility other than those created by, through, or
under Tenant.
6.4.4 Resolutions. Upon the execution
of this Lease, Landlord shall deliver to Tenant copies of the
resolutions duly adopted by the board of directors of Landlord
authorizing the execution, delivery, and performance by Landlord
of this Lease and all actions and documents contemplated by this
Lease, which copies shall be certified by the corporate secretary
of Landlord; and
6.4.5 Incumbency Certificate. Upon the
execution of this Lease, Landlord shall deliver to Tenant a duly
executed incumbency certificate for the officers of Landlord exe-
cuting any documents delivered in connection with this Lease.
6.4.6 Grant of Inspection. Upon the
execution of this Lease, Landlord shall transfer to Tenant the
U.S.D.A. Grant of Inspection for the Facility and shall
thereafter cooperate with Tenant's efforts to cause the Grant of
Inspection to be reactivated for the Facility.
6.4.7 Packaging Equipment. Upon the
execution of this Lease, Landlord shall assign the Packaging
Equipment Agreement to Tenant.
6.4.8 Title. Anything to the contrary
notwithstanding, if Landlord's title to the Facility is, in all
material respects, equivalent or better than it existed as of the
Acquisition Date, it shall be acceptable to Tenant.
7. NET LEASE; NON-TERMINABILITY. The Base Rent,
additional rent, and all other amounts payable under this Lease
by Tenant shall be paid without notice or demand and without
set-off, counterclaim, abatement, suspension, deduction, or
defense. It is the intention of the parties hereto that the
obligations of Tenant under this Lease shall be separate and
independent covenants and agreements, that the Base Rent, the
additional rent, and all other amounts payable by Tenant
hereunder shall continue to be payable in all events, and that
the obligations of Tenant hereunder shall continue unaffected.
8. TAXES AND ASSESSMENTS; COMPLIANCE WITH LAWS.
Tenant shall pay when due all taxes and assessments levied upon
or assessed against the Facility. Any taxes or assessments for
periods of time between the Acquisition Date and the commencement
of the Term shall be prorated between Landlord and Tenant.
Tenant shall, at its expense, comply with and shall cause the
Facility to comply with all governmental statutes, laws, rules,
orders, regulations, and ordinances affecting the Facility or the
use thereof. Tenant shall, at its expense, comply with the
requirements of all policies of insurance that at any time may be
in force with respect to the Facility.
9. LIENS; ENCUMBRANCES. Except with respect to a
leasehold deed of trust and a security interest in favor of
Chemical Bank, as collateral agent for certain secured parties,
Tenant will not, directly or indirectly, encumber the Facility or
create or permit to be created or to remain, and will promptly
discharge, at its expense, any mortgage, lien, encumbrance, or
charge on, pledge of, or conditional sale or other title
retention agreement with respect to the Facility or the leasehold
created by this Lease. Nothing contained in this Lease shall be
construed as constituting the consent or request of Landlord,
expressed or implied, of any contractor, subcontractor, laborer,
materialman, or vendor to or for the performance of any labor or
services or the furnishing of any materials for any construction,
alteration, addition, repair, or demolition of or to the Facility
or any part thereof. Landlord will not be liable for any labor,
services, or materials furnished or to be furnished to Tenant, or
to anyone holding the Facility or any part thereof through or
under Tenant, and no mechanic's or other liens for any such
labor, services, or materials shall attach to or affect the
interest of Landlord in and to the Facility.
10. INDEMNIFICATION. Landlord shall not be liable or
responsible in any way for, and Tenant waives and agrees to pay,
and to protect, indemnify, and save Landlord harmless from, all
claims against or arising out of: (i) any death or any injury of
any nature whatsoever in, on, or about the Facility that may be
suffered by Tenant or any employee, licensee, invitee, guest,
agent, or customer of Tenant or any other person, from any cause
whatsoever, or (ii) for any loss or damage or injury to any prop-
erty in, on, or about the Facility belonging to Tenant or its em-
ployees, agents, customers, licensees, invitees, guests, or any
other person, unless such injury or damage is caused solely by
the gross negligence or willful misconduct of Landlord, its
employees or agents. Without limiting the generality of the
foregoing, Landlord shall not be liable for any damage or damages
of any nature whatsoever to property caused by explosion, fire,
theft, or breakage, by sprinkler, drainage, or plumbing systems,
by failure for any reason to supply adequate drainage, by the
interruption of any public utility or service, by steam, gas,
water, rain, or other substances leaking, issuing, or flowing
into any part of the Facility, by natural occurrence, acts of the
public enemy, riot, strike, insurrection, war, court order,
requisition or order of governmental body or authority, or for
any damage or inconvenience which may arise as a result of the
repair, maintenance, or alteration of any part of the Facility,
unless such injury or damage is caused solely by the gross
negligence or willful misconduct of Landlord, its employees or
agents. In addition, Landlord shall not be liable for any loss
or damage for which the Tenant is required to insure, nor
for any loss or damage resulting from any construction, alter-
ations, or repair of the Facility, unless such injury or damage
is caused solely by the gross negligence or willful misconduct of
Landlord, its employees or agents.
11. MAINTENANCE AND REPAIR. Tenant will, at its ex-
pense, keep and maintain the Facility in good repair and
condition. The foregoing notwithstanding, Landlord shall be
responsible for up to $200,000 of the cost of all repairs,
maintenance, and alterations to the Facility to the extent that
such are necessary as a result of events occurring on or after
the Acquisition Date to bring the Facility into compliance with
all applicable laws, regulations, codes, ordinances, and
restrictions at the commencement of the Term.
12. ALTERATIONS. Tenant may alter or construct any
nonstructural improvement in the Facility and any structural im-
provement costing less than $100,000 without Landlord's consent.
Landlord shall not unreasonably withhold or delay the consent to
any other alteration or construction and shall be deemed to have
consented if it does not deny consent within five days after re-
ceipt of Tenant's request for consent. Any alteration of the Fa-
cility shall be performed in a good and workmanlike manner and
expeditiously completed in compliance with all applicable laws,
ordinances, orders, rules, regulations, and requirements.
13. INSURANCE.
13.1 Hazard Insurance. Tenant shall maintain,
at Tenant's expense, throughout the Term, a policy or policies of
insurance insuring Tenant and Landlord against all risks of
direct physical loss, subject to standard exclusions covering all
improvements to the Facility to the extent of not less than the
full insurable value of such property. The term "full insurable
value" means actual replacement cost of the Facility less the
cost of the land.
13.2 Liability Insurance. Tenant shall
maintain, at Tenant's expense, throughout the Term, a policy or
policies of general public liability insurance insuring Tenant
and Landlord against all liability for bodily/personal injury to
or death of any person occasioned by or arising out of or in
connection with the occupancy of the Facility, such policy or
policies to have not less than $5,000,000 combined single limit
coverage.
13.3 Policies. Prior to taking possession of
the Facility Tenant shall furnish evidence satisfactory to
Landlord of the maintenance of all insurance required by this
Section 13, including certificates of such insurance and evidence
of the payment of premiums therefor, and will obtain a written
obligation on the part of each insurance company to notify
Landlord at least 30 days prior to cancellation or material
change of any such insurance.
13.4 Subrogation. Tenant hereby waives any
cause of action which Tenant or anyone claiming by through, or
under it, by subrogation or otherwise, might now or hereafter
have against Landlord on account of any loss or damage which is
insured against under any insurance policy that names Tenant as a
party insured. Tenant shall provide Landlord a waiver of
subrogation endorsement, satisfactory to Landlord, to all
policies of insurance maintained pursuant to this Lease.
13.5 Companies. The insurance required by this
Lease shall be written by companies (including such co-insurers
and reinsurers) of recognized financial standing that are
authorized to do insurance business in Missouri, and such
insurance shall name Tenant as the insured party and Landlord as
an additional insured party as its interests may appear.
14. CONDEMNATION AND CASUALTY.
14.1 Condemnation. If any proceedings are
instituted for the taking of any portion of the Facility for
public use or purpose under the power of eminent domain, or any
transfer of any portion of the Facility in lieu of or under
threat of any such taking is agreed to by Landlord, Landlord
shall promptly notify Tenant. In the event of any such taking or
transfer of more than 30% of the Facility then, at the option of
Tenant, to be exercised by written notice not later than 30 days
prior to the date possession of such portion of the Facility is
to be delivered pursuant to any such taking or transfer, this
Lease will terminate as of the date possession is to be so
delivered. If Tenant elects to terminate this Lease pursuant to
the foregoing sentence, or if less than 30% of the Facility is to
be so taken or transferred, this Lease will continue unaffected
except (i) the Basic Rent shall be reduced by the proportion that
the fair market value of the portion of the Facility so taken or
transferred bears to the fair market value of the Facility prior
to such taking or transfer, and (ii) Tenant shall repair any
structural damage to the Facility caused by such taking or
transfer.
14.2 Casualty. If the Facility is damaged by
fire or other casualty, Tenant shall make the necessary repairs
and this Lease will continue in effect. Any repairs to be made
shall be limited to restoring the Facility to the condition in
which it was prior to the damage.
15. ASSIGNMENT AND SUBLETTING. Tenant may sublet all
or any part of the Facility without the prior written consent of
Landlord. Tenant may assign or pledge this Lease or any rights
and interests under this Lease without the prior written consent
of Landlord.
16. CONDITIONAL LIMITATIONS; DEFAULT PROVISION.
16.1 Each of the following events and acts shall
be an event of default (an "Event of Default") under this Lease:
16.1.1 If Tenant, at any time during the
Term shall (i) fail to make any payment of rent or other amount
required to be paid by Tenant, and Tenant shall fail to make any
such payment, for a period of ten days after delivery by Landlord
of written notice to Tenant that any such payment has become due,
or (ii) fail to observe or perform any other provision hereof for
30 days after Landlord shall have delivered to Tenant notice of
such failure (provided, that in the case of any default referred
to in this clause (ii) which cannot be cured by the payment of
money and cannot with diligence be cured within such 30-day
period, if Tenant shall proceed promptly to cure the same and
thereafter shall prosecute the curing of such default with
diligence and continuity, then upon receipt by Landlord of a
certificate from the President or a Vice President of Tenant
stating the reason that such default cannot be cured within 30
days and stating that Tenant is proceeding with diligence and
continuity to cure such default, the time within which such
failure may be cured shall be extended for such period as may be
necessary to complete the curing of the same with diligence and
continuity); or
16.1.2 if Tenant shall file a petition
in bankruptcy or for reorganization or for an arrangement
pursuant to any present or future federal or state bankruptcy law
or under any similar federal or state law, or shall be
adjudicated a bankrupt or insolvent or shall make an assignment
for the benefit of its creditors or shall admit in writing its
inability to pay its debts generally as they become due, or if a
petition or answer proposing the adjudication of Tenant as a
bankrupt or its reorganization under any present or future
federal or state bankruptcy law or any similar federal or state
law shall be filed in any court and such petition or answer shall
not be discharged or denied within 90 days after the filing
thereof; or
16.1.3 If a receiver, trustee, or
liquidator of Tenant or of all or substantially all of the assets
of Tenant or of the Facility shall be appointed in any proceeding
brought by Tenant, or if any such receiver, trustee, or
liquidator shall be appointed in any proceeding brought against
Tenant and shall not be discharged within 90 days after such
appointment, or if Tenant shall consent to or acquiesce in such
appointment; or
16.2 If an Event of Default occurs and
continues, Landlord may at its election, then or at any time
thereafter while such Event of Default shall continue, give
Tenant written notice of Landlord's intention to terminate the
Term on a date specified in such notice. Upon the giving of such
notice, the Term shall terminate on such date and all rights of
Tenant under this Lease shall terminate, but Tenant shall remain
liable as hereinafter provided.
16.3 If an Event of Default occurs and
continues, Landlord, to the extent permitted by applicable law,
shall have the immediate right, whether or not the Term shall
have been terminated, to re-enter and repossess the Facility or
any part thereof by force, summary proceedings, ejectment, or
otherwise and the right to remove all persons and property
therefrom. No such re-entry or taking of possession of the
Facility by Landlord shall be construed as an election on
Landlord's part to terminate the Term unless a written notice of
such intention be given to Tenant or unless the termination of
this Lease be decreed by a court of competent jurisdiction.
Landlord shall be under no liability for or by reason of
any such entry, repossession, or removal except that Landlord
shall be liable for damage caused by its gross negligence or
willful misconduct.
16.4 At any time or from time to time after the
repossession of the Facility, whether or not the Term shall have
been terminated, Landlord may (but shall be under no obligation
to) relet the Facility or any part thereof for the account of
Tenant, in the name of Tenant or Landlord or otherwise, without
notice to Tenant, for such term or terms (which may be greater or
less than the period which would otherwise have constituted the
balance of the term) and on such conditions (which may include
concessions or free rent) and for such uses as Landlord, in its
absolute discretion, may determine, and Landlord may collect and
receive any rents payable by reason of such reletting. Landlord
shall not be responsible or liable for any failure to relet the
Facility or any part thereof or for any failure to collect any
rent due upon any such reletting.
16.5 No expiration or termination of the term,
by operation of law or otherwise, and no repossession of the
Facility or any part thereof, and no reletting of the Facility,
shall relieve Tenant of its liabilities and obligations
hereunder, all of which shall survive such expiration,
termination, repossession, or reletting.
16.6 In the event of any expiration or
termination of the Term or repossession of the Facility by reason
of the occurrence of an Event of Default, Tenant shall pay to
Landlord the rent and other amounts required to be paid by Tenant
to and including the date of such expiration, termination, or
repossession.
16.7 In any action to enforce any provision of
this Lease, the prevailing party shall be entitled to an award of
its reasonable costs and expenses, including, without limitation,
its attorneys' fees and costs. In any action relating to this
Lease or Tenant's use or occupancy of this Facility brought by a
third party against Landlord, Tenant shall reimburse Landlord's
reasonable costs and expenses incurred therein, including,
without limitation, attorneys' fees and costs.
17. ADDITIONAL RIGHTS OF LANDLORD. No right or remedy
herein conferred upon or reserved to Landlord in this Lease is
intended to be exclusive of any other right or remedy, and each
and every right and remedy shall be cumulative and in addition to
any other right or remedy given under this Lease or now or
hereafter existing at law or in equity or by statute. The
failure of Landlord to insist at any time upon the strict
performance of any covenant or agreement or to exercise any
option, right, power, or remedy contained in this Lease shall not
be construed as a waiver or a relinquishment thereof for the
future. A receipt by Landlord of any Base Rent, any additional
rent, or any other amount payable hereunder with knowledge of the
breach of any covenant or agreement contained in this Lease shall
not be deemed a waiver of such breach, and no waiver by Landlord
of any provision of this Lease shall be deemed to have been made
unless expressed in writing and signed by Landlord. In addition
to other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable law, to
injunctive relief in case of the violation, or attempted or
threatened violation, of any of the covenants, agreements,
conditions, or provision of this Lease, or to a decree com-
pelling performance of any of the covenants, agreements, condi-
tions, or provisions of this Lease, or to any other remedy
allowed to Landlord at law or in equity.
18. NOTICES. All notices, requests, demands, or other
communications required or permitted by this Lease shall be in
writing and effective when received or upon the addressee's
refusal to accept service, and delivery shall be made personally
or by registered or certified mail, return receipt requested,
postage prepaid, or overnight courier or confirmed facsimile
transmission, addressed as follows:
18.1 If to Landlord:
Thorn Apple Valley, Inc.
26999 Central Park Boulevard, Suite 300
Southfield, Michigan 48075
Attn: Mr. Joel Dorfman
President and Chief Executive
Officer
Facsimile No.: (810) 213-1104
Copy to:
Honigman Miller Schwartz and Cohn
2290 First National Building
Detroit, Michigan 48226
Attn: Carl W. Herstein, Esq.
Facsimile No.: (313) 962-0176
18.2 If to Tenant:
c/o Foodbrands America, Inc.
1601 N.W. Expressway, Suite 1700
Oklahoma City, Oklahoma 73116
Attn: Mr. R. Randolph Devening
Chairman, President and
Chief Executive Officer
Facsimile No.: (405) 879-5568
Copy to:
McAfee & Taft
A Professional Corporation
Tenth Floor, Two Leadership Square
Oklahoma City, Oklahoma 73102
Attn: J. Michael Nordin, Esq.
Facsimile No.: (405) 235-0439
or to such other addresses as may be specified pursuant to notice
given by either party in accordance with the provisions of this
Section 18.
19. ESTOPPEL CERTIFICATES. Each party to this Lease
will, at any time and from time to time, upon not less than 10
days prior request, execute, acknowledge, and deliver to the
other party a statement in writing, executed by its President or
any Vice President, certifying that this Lease is unmodified and
in full effect (or, if there have been modifications, that this
Lease is in full effect as modified, and setting forth such
modifications) and the dates to which the Base Rent, additional
rent, and other amounts payable hereunder have been paid, and
either stating that to the knowledge of the party executing the
statement no default exists hereunder or specifying each such
default of which the such party may have knowledge. It is
intended that any such statement by Landlord may be relief upon
by any prospective purchaser or prospective lender of Tenant.
20. SURRENDER. Upon the expiration or earlier
termination of this Lease, Tenant shall peaceably leave and
surrender the Facility to Landlord in the same condition in which
the Facility was originally received from Landlord at the
commencement of this Lease, except as repaired, rebuilt,
restored, altered, or added to as permitted or required by any
provisions of this Lease and except for ordinary wear and tear.
Tenant shall remove from the Facility on or prior to such
expiration or earlier termination all property situated thereon
owned by Tenant, including, without limitation, all furniture,
fixtures, equipment and machinery installed or placed in the
Facility by Tenant, and the equipment covered by the
Packaging Equipment Agreement, and, at its expense, shall, on or
prior to such expiration or earlier termination, repair any
structural damage caused by such removal. Property not so
removed shall, at the option of Landlord, become the property of
Landlord, and Landlord may thereafter cause such property to be
removed from the Facility and disposed of, but the cost of any
such removal and disposition and the cost of repairing any damage
caused by such removal shall be borne by Tenant. The foregoing
notwithstanding, if Tenant wrongfully abandons the Facility prior
to the expiration of the Term in violation of this Lease, or if
Landlord elects to terminate the Term pursuant to this Lease
because of an Event of Default, Tenant may not remove from the
Facility any fixtures, equipment, or machinery, except the
equipment and machinery subject to a lease to which Tenant is a
party (other than this Lease) or in which Tenant has granted, or
is under an obligation to grant a security interest, lien, or
encumbrance to any third party, and such fixtures, equipment and
machinery shall become the property of Landlord without the need
for payment of further consideration by Landlord to Tenant.
21. HOLDING OVER. If Tenant continues to occupy the
Facility after the expiration or other termination of the Term
without the consent of Landlord, such holding over will, unless
otherwise agreed by the Landlord in writing, constitute a tenancy
at will at a daily rental equal to one-thirtieth (1/30) of 150%
of the Base Rent.
22. OPTION TO PURCHASE. Landlord hereby grants Tenant
an option to purchase the Facility for a purchase price of
$2,500,000 (the "Purchase Price"). Tenant may exercise the
option by giving notice to Landlord at any time during the Term.
The consummation of the sale of the Facility (the "Closing")
shall be ona date acceptable to Landlord and Tenant, but in no
event less than 30 nor more than 60 days after the date on which
the option is exercised.
22.1 Payment of Purchase Price. Tenant shall
pay the Purchase Price in the following manner:
22.1.1 Deposit. At the Closing, the
$500,000 Deposit shall be credited to the Purchase Price.
22.1.2 Promissory Note. At the Closing,
Tenant shall execute and deliver to Landlord a promissory note in
the form of Exhibit "A" to this Lease (the "Note") in the amount
of $2,000,000. The Note shall bear interest at the rate of 8%
per annum and be payable in three annual installments of
$666,666.67 plus accrued interest. The first installment shall
be paid on the date which is six months after the Closing; the
second installment shall be paid on the date which is 18 months
after the Closing; and the third installment shall be paid on the
date which is 30 months after the Closing. The Note shall be
secured by a first priority deed of trust, assignment of rents,
and security agreement encumbering Facility (which shall not
include any furniture, fixtures, equipment, and machinery
installed or placed in the Facility by Tenant) and in the form of
Exhibit "B" to this Lease (the "Deed of Trust"). The Deed of
Trust shall be superior to any other financing, including the
leasehold Deed of Trust in favor of Chemical Bank described in
Section 9, so that Landlord shall be in first priority as a
secured lender with respect to the Facility.
22.2 Closing. The Closing shall occur at a
mutually agreeable time by mail, facsimile transmission, or
otherwise without the need for a formal gathering, if
practicable, and otherwise at 10:00 a.m. in the offices of McAfee
& Taft A Professional Corporation, Tenth Floor, Two Leadership
Square, 211 North Robinson, Oklahoma City, Oklahoma. At or
before the Closing, Landlord and Tenant shall each take such
actions and deliver to the other, or the Title Company, as
appropriate, such instruments, items, and documents as are
necessary to carry out the purposes of this Lease, and such
instruments and documents shall be in form and substance
reasonably satisfactory to the counsel for the parties. The
actions to be performed and the instruments, items, and docu-
ments to be delivered at the Closing shall include, but not be
limited to, those described in this Section 22.
22.3 Landlord's Acts and Deliveries. Landlord
shall deliver the following:
22.3.1 A duly executed and acknowledged
corporation warranty deed in the form of Exhibit "C" to this
Lease conveying to Tenant fee simple marketable title to the Land
free and clear of any lien, claim, encumbrance, or restriction
other than the Permitted Exceptions;
22.3.2 An owner's policy of title insur-
ance issued by the Title Company conforming to the Title
Commitment (or a marked-up Title Commitment that will assure
Tenant that the Title Company will issue to Tenant an owner's
policy of title insurance conforming to the Title Commitment),
insuring in Tenant fee simple marketable title to the Land, and
providing coverage in the amount of the Purchase Price with
exception for only the Permitted Exceptions (the "Owner's
Policy");
22.3.3 A duly executed and acknowledged
Bill of Sale in the form of Exhibit "D" to this Lease conveying
marketable title to the Machinery and Equipment free of any lien,
claim, encumbrance, or restriction.
22.3.4 A duly executed affidavit from
Landlord regarding the nonforeign status of Landlord in
compliance with Section 1445 of the Internal Revenue Code of
1986, as amended, and the regulations relating thereto;
22.3.5 A duly executed affidavit of
Landlord enabling the Title Company to insure Tenant's title to
the Land without exceptions for unfiled liens and matters
created, first appearing in the public records, or attaching
subsequent to the effective date of the Title Commitment but
prior to Tenant's acquisition of title of record to the Land;
22.3.6 A certificate of good standing
and certified articles of incorporation for Landlord issued by
the State of Michigan and copies of the resolutions duly adopted
by the board of directors of Landlord authorizing the execution,
delivery, and performance by Landlord of this Lease and all
actions and documents contemplated by this Lease, which copies
shall be certified by the corporate secretary of Landlord; and
22.3.7 A duly executed incumbency
certificate for the officers of Landlord executing any documents
delivered in connection with this Lease.
22.4 Tenant's Acts and Deliveries. Tenant shall
deliver the following:
22.4.1 The duly executed Note;
22.4.2 The duly executed and
acknowledged Deed of Trust;
22.4.3 A duly executed Missouri and
Oklahoma Uniform Commercial Code financing statements covering
any portion of the Facility that is personal property.
22.4.4 Copies of the resolutions duly
adopted by the board of directors of Tenant authorizing the
execution, delivery, and performance by Tenant of this Lease and
all actions and documents contemplated by this Lease, which
copies shall be certified by the corporate secretary of Tenant;
and
22.4.5 A duly executed incumbency
certificate for the officers of Tenant executing any documents
delivered in connection with this Lease. Tenant shall cooperate
with Landlord's efforts to obtain a Lender's policy of title
insurance at the Closing, which cooperation shall include,
without limitation, execution and delivery of such affidavits as
the Title Company may reasonably require.
22.5 Costs. Landlord and Tenant agree to pay
the costs of the sale of the Facility as allocated below.
22.5.1 Landlord shall pay: (i) all ab-
stracting and title examination costs of the Title Company; (ii)
all costs of the plat; (iii) the premium for the title insurance
policy; (iii) one-half of the closing fees and expenses of the
Title Company; (iv) any transfer taxes relating to the conveyance
of the Facility; (v) Landlord's attorney's fees; and (vi) all
taxes and fees applicable to the Deed of Trust.
22.5.2 Tenant shall pay: (i) one-half
of the closing fees and expenses of the Title Company; (ii) the
reasonable legal fees and expenses of Missouri counsel to
Landlord for preparation of the Note and Deed of Trust; and (iii)
Tenant's attorneys' fees.
22.6 Environmental. If prior to the Closing
Tenant determines that there was a release of Hazardous Material
at the Facility on or after the Acquisition Date but prior to
commencement of the Term that has not been remediated in
accordance with all applicable governmental standards, the
following shall occur:
22.6.1 If the release does not require
remediation under applicable environmental laws, neither Landord
nor Tenant may terminate this Lease, and both parties shall
proceed to Closing. Neither this Section 22.6.1 or the
consummation of the Closing shall affect Landlord's obligations
to indemnify Tenant pursuant to Section 23 (except as may be
limited by Section 22.6.2) or Landlord's representations and
warranties in Section 2.20.
22.6.2 If the release requires
remediation under applicable environmental laws, one of the
following may occur:
22.6.2.1 Landlord at its sole cost
and expense shall remediate the release in accordance
with all applicable governmental standards and the
parties shall proceed to Closing.
22.6.2.2 With Tenant's consent
(which may be withheld for any reason) Landlord shall
permit Tenant to remediate the release and offset its
actual cost of remediation of the release against all
payments due under the Note and Deed of Trust, in which
event Landlord's liability for the Release will be
limited to amounts due under the Note and Deed of
Trust.
In the event the Landlord fails to complete the remediation in
accordance with Section 22.6.2.1 or Tenant does not elect to
remediate release in accordance with Section 22.6.2.2, Tenant may
(i) terminate this Lease and obtain the Deposit from Landlord, or
(ii) Tenant may complete the remediation either before or after
Closing and offset its actual cost of remediation of the Release
against all payments due under the Note and Deed of Trust, in
which event Landlord's liability for the release will be limited
to the amounts due under the Note and Deed of Trust.
23. INDEMNIFICATION.
23.1 Landlord's Indemnity. Landlord agrees to
indemnify and hold Tenant and its affiliates, shareholders, offi-
cers, directors, attorneys, agents, consultants, successors, and
assigns harmless from and with respect to (i) any and all Losses
related to or arising directly or indirectly out of any breach by
Landlord of any covenant, warranty or representation contained in
this Lease or in any agreement, schedule, exhibit or certificate
delivered by Landlord to Tenant pursuant to the terms of this
Lease, (ii) any and all Losses (the "Pre-Term Losses") arising
directly or indirectly out of any attempt or threat (regardless
of whether successful and regardless of whether litigation is
commenced) by any person or entity to cause or require Tenant to
pay or discharge any actual or claimed debt, obligation,
liability, or commitment of or associated with Landlord which is
not expressly assumed by Tenant under this Lease, (iii) any and
all Losses directly or indirectly resulting from any failure of
Landlord to comply with the Bulk Transfer Laws ("Bulk Sales
Losses"). Except with respect to Bulk Sale Losses, Pre-Term
Losses, and Losses resulting from any breach by Landlord of any
of its indemnities, covenants, warranties, or representations
contained in Section 2.5 or Section 2.20, Landlord shall not have
any liability under this Section 23.1 unless and until, and only
to the extent that, Tenant shall have incurred Losses, in the
aggregate, in excess of $50,000 ("Landlord's Cushion").
23.2 Tenant's Indemnity. Tenant agrees to
indemnify and hold Landlord and its affiliates, shareholders,
officers, directors, attorneys, agents, consultants, successors,
and assigns harmless from and with respect to (i) any and all
Losses related to or arising directly or indirectly any breach by
Tenant of any covenant, warranty or representation contained in
this Lease or in any agreement or certificate delivered by Tenant
to Landlord pursuant to the terms of this Lease; (ii) any and all
Losses arising directly or indirectly out of third party claims
premised solely on events occurring or conditions arising during
the Term and related to Tenant's operation of the Facility (the
"Term Losses"); and (iii) any and all losses arising directly or
indirectly out of any attempt or threat (regardless of whether
successful and regardless of whether litigation is commenced) by
any person or entity to cause or require Landlord to pay or
discharge any actual or claimed debt, obligation, liability, or
commitment of or associated with Tenant (collectively the "Tenant
Liabilities Losses"). Except with respect to Term Losses and the
Tenant Liabilities Losses, Tenant shall have no liability under
this Section 23.2 unless and until, and only to the extent that,
Landlord shall have incurred Losses, in the aggregate, in excess
of $50,000 ("Tenant's Cushion").
23.3 Indemnification Procedure.
23.3.1 In the event that any party (the
"Aggrieved") desires to make a claim against any other party (the
"Indemnitor") in connection with any Losses for which the
Aggrieved may seek indemnification hereunder (a "Claim"), the
Aggrieved shall notify the Indemnitor of such Claim and the
amount and circumstances surrounding it; provided that failure of
the Aggrieved to give such notice shall only relieve the
Indemnitor of its obligations under this Section 23 to the
extent, if any, that the Indemnitor shall have been prejudiced
thereby. Upon receipt of such notice from the Aggrieved, the
Indemnitor shall be entitled, at the Indemnitor's election, to
assume or participate in the defense of Claims made by a third
party. In any case in which the Indemnitor assumes the defense
of the Claim, the Indemnitor shall give the Aggrieved ten
calendar days notice prior to executing any settlement agreement
and the Aggrieved shall have the right to approve or reject any
settlement and related expenses. Upon rejection of any
settlement and related expenses, the Aggrieved shall assume
control of the defense of such Claim and the liability of the
Indemnitor with respect to such Claim shall be limited to the
amount or the monetary equivalent of the rejected settlement and
related expenses.
23.3.2 The Aggrieved shall retain the
right to employ its own counsel and to discuss matters with the
Indemnitor related to the defense of any Claim, the defense of
which has been assumed by the Indemnitor pursuant to Section
23.3.1 of this Lease, but the Aggrieved shall bear and shall be
solely responsible for its own costs and expenses in connection
with such participation. All decisions of the Indemnitor shall
be final and the Aggrieved shall cooperate with the Indemnitor in
all respects in the defense of the Claim.
23.3.3 If Indemnitor fails to give
notice of the assumption of the defense of any Claim within a
reasonable time period not to exceed 45 days after receipt of
notice thereof from the Aggrieved, the Indemnitor shall no longer
be entitled to assume (but shall continue to be entitled to
participate in) such defense. The Aggrieved may, at its option,
continue to defend such Claim and, in such event, the Indemnitor
shall indemnify the Aggrieved for all reasonable fees and
expenses incurred in connection therewith. The Indemnitor shall
be entitled to participate at its own expense and with its
counsel in the defense of any Claim the defense of which it does
not assume. Prior to effectuating any settlement of such Claim,
the Aggrieved shall furnish the Indemnitor with written notice of
any proposed settlement in sufficient time to allow the
Indemnitor to act thereon. Within 15 days after the giving of
such notice, the Aggrieved shall be permitted to effect such
settlement unless the Indemnitor (i) reimburses the Aggrieved in
accordance with the terms of this Section 23 for all reasonable
fees and expenses incurred by the Aggrieved in connection with
such Claim, (ii) assumes the defense of such Claim, and (iii)
takes such other actions as the Aggrieved may reasonably
request as assurance of the Indemnitor's ability to fulfill its
obligations under this Section 23 in connection with such Lease.
24. MISCELLANEOUS PROVISIONS.
24.1 Certain Definitions.
24.1.1 Environmental Laws means (i) any
federal, state or local law, statute, ordinance, rule,
regulation, code, order, permit, directive, or requirement,
relating to pollution, the environment, Hazardous Materials,
underground storage tanks, or the protection of air, surface
water, groundwater, drinking water, land (including its surface
and subsurface), human health, the environment or any other
natural resource, or concerning the use, storage, recycling,
treatment, generation, transportation, processing, handling,
production or disposal of any Hazardous Materials, and (ii) any
common law or equitable doctrine (including, without limitation,
injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose
liability or obligation for or related to death, personal
injury or property damage, or for the performance of, or payment
of the cost of performing any investigation, remediation or
clean-up of the threatened, alleged or actual presence of
Hazardous Materials.Such term includes, without limitation, the
Solid Waste Disposal Act (42 U.S.C. Section 6991, et seq.), as
amended by the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901, et seq.) ("RCRA"), and the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601, et seq.) ("CERCLA"), as in existence on the date
hereof.
24.1.2 Hazardous Material means ammonia,
asbestos; petroleum; and any material, substance or waste that
may adversely affect human health or the environment or that is
referenced in or regulated under the Environmental Laws,
including, without limitation, any "hazardous waste," "hazardous
substance," "toxic substance," "regulated substance,"
"pollutant," or "contaminant" as those terms are defined or used
in the Environmental Laws. Such term includes, without
limitation, (i) any material, substance or waste defined as a
"hazardous waste" pursuant to Section 1004 of RCRA, (ii) any
material, substance or waste defined as a "hazardous substance"
pursuant to Section 101 of CERCLA or (iii) any material,
substance or waste defined as a "regulated substance" pursuant to
Subchapter IX of RCRA.
24.1.3 Losses means all actual liabili-
ties, losses, costs, damages, penalties, fines, assessments, de-
mands, claims, causes of action, including, without limitation,
reasonable attorneys', accountants' and consultants' fees and ex-
penses and court costs, but net of the effect of the Aggrieved's
actual benefit from tax deductions and credits and insurance pro-
ceeds.
24.2 Further Assurance and Assistance. After
the Closing either party will, from time to time, upon the
request of the other party, execute, acknowledge, and deliver in
proper form any instrument of conveyance or further assurance
reasonably necessary or desirable to effect the transactions in
accordance with this Lease transfer to Tenant the interest in the
Facility being transferred to Tenant in accordance with the terms
of this Lease.
24.3 Transfer and Other Taxes. Except as
specifically provided for in this Lease, any and all sales, use,
stamp, transfer, documentary, personal property, and like taxes;
closing fees and charges; and any other fees and charges required
to be paid in connection with the transfer of the Facility and
the transactions contemplated hereby shall be the liability of
and paid by Tenant or Landlord whose liability for such
obligation is determined to be customary in the jurisdiction.
24.4 Amendment and Modification. This Lease may
be amended, modified or supplemented only by mutual written
consent of the parties hereto.
24.5 Waiver of Compliance. The failure by any
party at any time to require performance of any provision hereof
shall not affect its right later to require such performance. No
waiver in any one or more instances shall (except as stated
therein) be deemed to be a further or continuing waiver of any
such condition or breach in other instances or a waiver of any
condition or breach of any other term, covenant, representation
or warranty.
24.6 Definition of "Knowledge". Whenever in
this Lease any representation or warranty is expressed in terms
of the "knowledge" of Tenant or Landlord, such knowledge shall be
deemed to refer to matters known (i) in the case of Landlord, to
any of Messrs. Henry S Dorfman, Joel Dorfman, Louis Glazier,
Michael Rozzano, Keith Jahnke and Ronald Risher, and (ii) in the
case of Tenant, to any of Messrs. R. Randolph Devening, Horst O.
Sieben, William L. Brady, Bryant Bynum, and David Clapp.
24.7 Bulk Transfer Laws. Tenant hereby waives
Landlord's compliance with all applicable bulk sales, bulk sales
tax laws or similar laws relating to the transfer to it of the
Facility ("Bulk Transfer Laws").
24.8 Disputes; Arbitration. The parties hereto
agree that all disputes between them relating to this Lease are
to be resolved by binding arbitration as provided herein. This
agreement to arbitrate shall survive the rescission or
termination of this Lease. All arbitration shall be conducted
pursuant to the Commercial Arbitration Rules of the American
Arbitration Association except as herein may be provided. The
panel used will be selected from, if available, the "Food
Industry Panel" employed by the American Arbitration Association
and the decision of the arbitrators will be final and binding on
all parties. All arbitration will be undertaken pursuant to the
Federal Arbitration Act, where applicable, and the decision of
the arbitrators will be enforceable in any court of competent
jurisdiction.
In any dispute where a party seeks $50,000 or more in
damages, three arbitrators will be employed. All costs attendant
to the arbitration, excluding attorney's and expert's fees, will
be borne equally by the parties. Each party will bear its own
attorney's and expert's fees. The arbitrators will not award
punitive, consequential or indirect damages. Each party hereby
waives the right to such damages and agrees to receive only those
actual damages directly resulting from the claim asserted. In
resolving all disputes between the parties, the arbitrators will
apply the law of the State of Missouri, except as may be modified
by this Lease. The arbitrators are by this Lease directed to
conduct the arbitration hearing no later than three (3) months
from the service of the statement of claim and demand for
arbitration unless good cause is shown establishing that the
hearing cannot fairly and practically be so convened.
Except as needed for presentation in lieu of a live ap-
pearance, depositions will not be taken. Parties will be
entitled to conduct document discovery by requesting production
of documents. Responses or objections will be served twenty days
after receipt of a request. The arbitrators will resolve any
discovery disputes by such prehearing conferences as may be
needed. All parties agree that the arbitrators and any counsel
of record to the proceeding will have the power of subpoena
process as provided by law.
The parties may be in a relationship that could give
rise to the need by one or more of the parties for emergency
judicial relief to regain possession of goods, to prevent the
sale or transfer of goods. The parties agree that either shall
be entitled to pursue such remedies for emergency or preliminary
injunctive relief in any court of competent jurisdiction,
provided that each party agrees that it will consent to the stay
of such judicial proceedings on the merits of both this Lease and
the related transactions pending arbitration of all underlying
claims between the parties immediately following the issuance of
any such emergency or injunctive relief.
24.9 Counterparts. This Lease may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument.
24.10 Entire Lease. This Lease, including the
agreements referred to herein, the Schedules and Exhibits
attached hereto and other documents referred to herein which form
a part hereof, contains the entire understanding of the parties
hereto in respect of the subject matter contained herein and
supersedes all prior agreements by and among Landlord, Tenant,
and all affiliates of Tenant regarding the Facility. There are
no restrictions, promises, representations, warranties, covenants
or undertakings, other than those expressly set forth or referred
to herein. This Lease supersedes all prior agreements and
understandings between the parties with respect to such subject
matter.
24.11 Schedules. Notwithstanding anything to the
contrary contained in this Lease, Landlord and Tenant hereby
agree that the schedules are attached hereto and are made a part
of this Lease for all purposes. The parties further understand
and agree that disclosure made in any schedule shall be deemed
disclosure in all other schedules as if set forth therein, that
is, information set forth in one schedule shall be construed as
disclosure in all schedules.
24.12 Third Party Beneficiaries. Regardless of
any other provision of this Lease, there are no third party
beneficiaries of this Lease or of any term or provision thereof.
24.13 Deposit. Landlord shall be entitled to re-
tain the Deposit in all circumstances except: (i) Tenant's exer-
cise of the option to purchase the Facility, in which event the
Deposit shall be applied to the purchase price as provided in
Section 22.1.1, (ii) the termination of this Lease because of a
default by Landlord, (iii) as described in Section 6.4.2, (iv) as
described in Section 22.6 and (v) Landlord's failure to convey
the Facility to Tenant as provided in Section 22 upon Tenant's
exercise of the option to purchase the Facility.
24.14 Memorandum of Lease. Upon the execution of
this Lease, Landlord and Tenant shall duly execute and deliver to
the Title Company for recording a Memorandum of Lease in
recordable form and substantially in the form of Exhibit "E" to
this Lease.
24.15 Governing Law. This Lease shall be
governed by and construed in accordance with the laws of the
State of Missouri.
IN WITNESS WHEREOF, Landlord and Tenant have caused
this Lease to be duly executed and delivered, all as of the day
and year first above written.
THORN APPLE VALLEY, INC., a
Michigan corporation
By /s/ Louis Glazier
Name: Louis Glazier
Title:Executive Vice President
Finance & Administration
CONTINENTAL DELI FOODS, INC., a
Delaware corporation
By /s/ William L. Brady
William L. Brady
Vice President
STATE OF MICHIGAN )
) ss.
COUNTY OF OAKLAND )
This instrument was acknowledged before me on the 31st
day of May, 1996, by Louis Glazier as Executive Vice President of
Thorn Apple Valley, Inc., a Michigan corporation.
(Seal) /s/ Janet M. Anglebrandt
Notary Public
My commission expires: 8/17/98
STATE OF OKLAHOMA )
) ss.
COUNTY OF OKLAHOMA )
This instrument was acknowledged before me on the 31st
day of May, 1996, by William L. Brady as Vice President of Conti-
nental Deli Foods, Inc., a Delaware corporation.
(Seal) /s/ Essa G. Hicks
Notary Public
My commission expires: 1/26/98
EXHIBIT 11.1
<TABLE>
FOODBRANDS AMERICA, INC. AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE - UNAUDITED
(Dollar amounts in thousands, except per share figures)
<CAPTION>
Three Months Ended Six Months Ended
__________________ __________________
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
________ _______ ________ _______
<S> <C> <C> <C> <C>
Income from continuing operations $ 8,707 $ 1,932 $10,829 $ 3,724
Loss from discontinued
operations - (1,766) - (4,121)
Loss on disposal of discontinued
operations - (38,526) - (38,526)
Extraordinary loss on early
extinguishment of debt (5,051) - (5,051) -
________ ________ _______ ________
Net income (loss) $ 3,656 $(38,360) $ 5,778 $(38,923)
======== ======== ======= ========
Primary earnings per share:
Weighted average number of
common shares outstanding 12,471 12,448 12,470 12,448
Common stock equivalents:
Dilutive options and warrants - - - -
______ ______ ______ ______
Weighted average number of
common and common equivalent
shares outstanding 12,471 12,448 12,470 12,448
====== ====== ====== ======
Income from continuing
operations $ 0.70 $ 0.16 $ 0.87 $ 0.30
Loss from discontinued
operations - (0.14) - (0.33)
Loss on disposal of
discontinued operations - (3.09) - (3.09)
Extraordinary loss on early
extinguishment of debt (0.41) - (0.41) -
______ ______ ______ ______
Net income (loss) per share $ 0.29 $(3.07) $ 0.46 $(3.12)
====== ====== ====== ======
Fully diluted earnings per share:
Weighted average number of
common shares outstanding 12,471 12,448 12,470 12,448
Common stock equivalents:
Dilutive options and warrants 193 - 193 -
______ ______ ______ ______
Weighted average number of
common and common equivalent
shares outstanding 12,664 12,448 12,663 12,448
====== ====== ====== ======
Income from continuing
operations $ 0.69 $ 0.16 $ 0.86 $ 0.30
Loss from discontinued
operations - (0.14) - (0.33)
Loss on disposal of
discontinued operations - (3.09) - (3.09)
Extraordinary loss on early
extinguishment of debt (0.40) - (0.40) -
______ ______ ______ ______
Net income (loss) per share $ 0.29 $(3.07) $ 0.46 $(3.12)
====== ====== ====== ======
</TABLE>
EXHIBIT 15.1
July 26, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Foodbrands America, Inc.
Registration on Form S-8
We are aware that our report dated July 24, 1996 on our review of
interim financial information of Foodbrands America, Inc. for the
periods ended June 29, 1996, and July 1, 1995, and included in
the Company's quarterly report on Form 10-Q for the quarter ended
June 29, 1996, is incorporated by reference in the Registration
Statements on Form S-8 (File Nos. 333-04915, 333-04925, 333-
04665, 333-04671, 33-45974, 33-59331 and 33-62611) of Foodbrands
America, Inc. Pursuant to Rule 436(c) under the Securities Act
of 1933, this report should not be considered a part of the
Registration Statement prepared or certified by us within the
meaning of Sections 7 and 11 of that Act.
COOPERS & LYBRAND L.L.P.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 29, 1996,
CONTAINED IN THE SECOND QUARTER 1996 FORM 10-Q REPORT AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 7,580
<SECURITIES> 0
<RECEIVABLES> 40,580
<ALLOWANCES> 0
<INVENTORY> 65,538
<CURRENT-ASSETS> 121,318
<PP&E> 186,910
<DEPRECIATION> 46,950
<TOTAL-ASSETS> 533,386
<CURRENT-LIABILITIES> 91,326
<BONDS> 317,590
0
0
<COMMON> 125
<OTHER-SE> 48,982
<TOTAL-LIABILITY-AND-EQUITY> 533,386
<SALES> 386,707
<TOTAL-REVENUES> 386,707
<CGS> 307,348
<TOTAL-COSTS> 307,348
<OTHER-EXPENSES> 56,574
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,081
<INCOME-PRETAX> 7,308
<INCOME-TAX> (3,521)
<INCOME-CONTINUING> 10,829
<DISCONTINUED> 0
<EXTRAORDINARY> (5,051)
<CHANGES> 0
<NET-INCOME> 5,778
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
