SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 1998
FRENCH FRAGRANCES, INC.
(Exact name of registrant as specified in its charter)
Florida 1-6370 59-0914138
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
14100 N.W. 60th Avenue
Miami Lakes, Florida 33014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 818-8000
_____________________________________________________________________________
(Former name or former address, if changed since last report)
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Item 5. Other Events
On April 27, 1998, French Fragrances, Inc. (the "Company"), consummated
the private placement under Rule 144A pursuant to the Securities Act of 1933,
as amended, of $40 million principal amount of 10-3/8% Senior Notes due 2007
(the "Notes"). The Notes were sold at 106.5% of their principal amount and
have substantially similar terms to the Company's existing 10-3/8% Senior
Notes due 2007 which the Company issued in May 1997. The net proceeds of
approximately $41.4 million from the sale of the Notes were used to repay
outstanding borrowings under the Company's revolving bank credit facility and
$5 million of other indebtedness to its bank lender, all of which were used
for the March 1998 acquisition of certain assets of J.P. Fragrances, Inc., as
well as for working capital purposes.
The Notes have not be registered under the Act and may not be offered or
sold in the United States absent registration or an applicable exemption from
registration requirements. The Notes are expected to be exchanged for new
notes containing identical terms which will be registered under the Act. The
exchange offer will be made only by means of a prospectus.
Item 7. Financial Statements and Exhibits.
Exhibit
Number Description
- ------- -------------------------------------------------------------------
4.1 Indenture, dated as of April 27, 1998, between the Company and
Marine Midland Bank, as trustee.
4.2 Registration Rights Agreement, dated as of April 27, 1998, between
the Company and Donaldson, Lufkin & Jenrette Securities
Corporation.
99.1 Press Release dated April 27, 1998 relating to the consummation of
the private placement of the Notes.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRENCH FRAGRANCES, INC.
/s/ William J. Mueller
Date: May 1, 1998 William J. Mueller
Vice President - Operations and
Chief Financial Officer
French Fragrances, Inc.
$40,000,000
Aggregate Principal Amount
of 10 3/8% Senior Notes due 2007
INDENTURE
Dated as of April 27, 1998
Marine Midland Bank
Trustee
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CROSS REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
<S> <C> <C>
310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.03;11.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.05,11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence). . . . . . . . . . . . . . . . . . N.A.
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 2.13
317 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
- --------
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . . . . . . . . . . 1
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1.03. Incorporation by Reference of Trust Indenture Act. . . . . . . . . . . 16
Section 1.04. Rules of Construction. . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 2 THE SENIOR NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.02. Execution and Authentication. . . . . . . . . . . . . . . . . . . . . . 18
Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . 20
Section 2.05. Holder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.07. Replacement Senior Notes. . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.08. Outstanding Senior Notes. . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.09. Treasury Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.10. Temporary Senior Notes. . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.13. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.14. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.15. CUSIP Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 3 REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.02. Selection of Senior Notes to Be Redeemed . . . . . . . . . . . . . . . 33
Section 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . 35
Section 3.05. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . 35
Section 3.06. Senior Notes Redeemed in Part. . . . . . . . . . . . . . . . . . . . . 35
Section 3.07. Optional Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.08. Mandatory Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.09. Offer to Purchase by Application of Excess Proceeds. . . . . . . . . . 36
ARTICLE 4 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.01. Payment of Senior Notes. . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . 38
Section 4.03. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.04. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.05. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.06. Stay, Extension and Usury Laws . . . . . . . . . . . . . . . . . . . . 40
Section 4.07. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries . . . . 42
Section 4.09. Incurrence of Indebtedness and Issuance of Disqualified Stock. . . . . 43
Section 4.10. Asset Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.11. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . 45
Section 4.12. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.13. Sale and Leaseback Transactions. . . . . . . . . . . . . . . . . . . . 46
Section 4.14. Limitation on Issuances and Sales of Capital Interests of Wholly
Owned Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.15. Limitations on Issuances of Guarantees of Indebtedness . . . . . . . . 47
Section 4.16. Subsidiary Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.17. Business Activities. . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.18. Offer to Repurchase Upon Change of Control . . . . . . . . . . . . . . 48
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Section 4.19. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 4.20. Payments for Consent . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 4.21. Limitation on Preferred Stock or Preferred Equity Interests of
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 5 SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.01. Merger, Consolidation, or Sale of Assets . . . . . . . . . . . . . . . 49
Section 5.02. Successor Corporation Substituted. . . . . . . . . . . . . . . . . . . 50
ARTICLE 6 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.04. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.05. Control by Majority. . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.06. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.07. Rights of Holders of Senior Notes to Receive Payment . . . . . . . . . 54
Section 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . 55
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.11. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 7 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . 58
Section 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.06. Reports by Trustee to Holders of the Senior Notes. . . . . . . . . . . 59
Section 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . 59
Section 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.09. Successor Trustee by Merger, etc.. . . . . . . . . . . . . . . . . . . 61
Section 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . . . 61
Section 7.11. Preferential Collection of Claims Against Company. . . . . . . . . . . 62
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . . 62
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance . . . . . . . 62
Section 8.02. Legal Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . 62
Section 8.03. Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 8.04. Conditions to Legal or Covenant Defeasance . . . . . . . . . . . . . . 63
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions. . . . . . . . . . . . . . . . . . . . 65
Section 8.06. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 8.07. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER. . . . . . . . . . . . . . . . . . . . . . . . 66
Section 9.01. Without Consent of Holders of Senior Notes . . . . . . . . . . . . . . 66
Section 9.02. With Consent of Holders of Senior Notes. . . . . . . . . . . . . . . . 67
Section 9.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . 68
Section 9.04. Revocation and Effect of Consents. . . . . . . . . . . . . . . . . . . 68
Section 9.05. Notation on or Exchange of Senior Notes. . . . . . . . . . . . . . . . 69
Section 9.06. Trustee to Sign Amendments, etc. . . . . . . . . . . . . . . . . . . . 69
ARTICLE 10 GUARANTEE OF SENIOR NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.01. Subsidiary Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.02. Limitation of the Subsidiary Guarantors' Liability. . . . . . . . . . 70
Section 10.03. Release of the Subsidiary Guarantors. . . . . . . . . . . . . . . . . 71
Section 10.04. Merger, Consolidation or Sale of Assets . . . . . . . . . . . . . . . 71
Section 10.05. Execution and Delivery of Subsidiary Guarantees . . . . . . . . . . . 72
ARTICLE 11 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 11.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . . . . . . . 72
Section 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 11.03. Communication by Holders of Senior Notes with Other Holders of
Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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Section 11.04. Certificate and Opinion as to Conditions Precedent. . . . . . . . . . 74
Section 11.05. Statements Required in Certificate or Opinion . . . . . . . . . . . . 74
Section 11.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . 75
Section 11.07. No Personal Liability of Directors, Officers, Employees, Partners
and Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 11.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 11.09. No Adverse Interpretation of Other Agreements . . . . . . . . . . . . 75
Section 11.10. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.12. Counterpart Originals . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 11.13. Table of Contents, Headings, etc. . . . . . . . . . . . . . . . . . . 76
Section 11.14. Agent for Service of Process; Consent to Jurisdiction . . . . . . . . 76
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EXHIBITS
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Exhibit A-1 FORM OF SENIOR NOTE
Exhibit A-2 FORM OF REGULATION S GLOBAL NOTE
Exhibit B-1 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM RULE 144A
GLOBAL NOTE TO REGULATION S GLOBAL NOTE
Exhibit B-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM REGULATION
S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
Exhibit B-3 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER OF DEFINITIVE
NOTES FOR OTHER DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN GLOBAL NOTES
Exhibit B-4 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM RULE 144A
GLOBAL NOTE OR REGULATION S GLOBAL NOTE TO DEFINITIVE NOTE
Exhibit C FORM OF SUBSIDIARY GUARANTEE
Exhibit D FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of April 27, 1998 between French Fragrances,
Inc., a Florida corporation (the "Company"), and Marine Midland Bank, a New
York banking corporation and trust company, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 10 3/8%
Senior Notes due 2007, Series C, of the Company (the "Initial Senior Notes")
and the 10 3/8% Senior Notes due 2007, Series D, of the Company (the
"Exchange Senior Notes" and, together with the Initial Senior Notes, the
"Senior Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. DEFINITIONS
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, provided
that such Indebtedness was not incurred in contemplation of such other Person
merging with or into or becoming a Subsidiary of such specified Person, and
(ii) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person, provided that such Indebtedness was not incurred in
contemplation of such acquisition.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement
or otherwise; provided that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"APPLICABLE PROCEDURES" means applicable procedures of the
Depositary, Euroclear or Cedel, as the case may be.
"ASSET SALE" means (a) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback or by way of merger, consolidation or similar transaction) other
than sales of inventory in the ordinary course of business consistent with
past practices (provided that the sale, lease, conveyance or other disposition
of all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole shall be governed by the provisions of Section 4.18 and/or
Section 5.01 hereof and not by the provisions of Section 4.10 hereof), (b) the
issuance by any Subsidiary of Equity Interests of such Subsidiary and (c) the
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disposition by the Company or any of its Subsidiaries of Equity Interests of
any of the Company's Subsidiaries, in the case of either clause (a), (b) or
(c), whether in a single transaction or a series of related transactions, (i)
that have a fair market value in excess of $1.0 million or (ii) for net
proceeds in excess of $1.0 million. Notwithstanding the foregoing, (a) a
transfer of assets by the Company to a Wholly Owned Subsidiary that is a
Subsidiary Guarantor or by a Subsidiary to the Company or to another
Subsidiary, (b) an issuance of Equity Interests by a Subsidiary to the Company
or to another Subsidiary, (c) a Restricted Payment that is permitted by
Section 4.07 hereof, (d) any sale and leaseback transaction otherwise
permitted pursuant to Section 4.13 hereof, and (e) sales of accounts
receivable in the ordinary course of business consistent with past practices
for the purpose of insuring against the risk of uncollectibility pursuant to
the Heller Arrangement (or any replacement thereof on terms that are no less
favorable to the Company), in each case will not be deemed to be Asset Sales.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale and leaseback transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any authorized committee of the Board of Directors, except that for the
purposes of the definitions of the terms "Change of Control" and "Continuing
Directors," the term "Board of Directors" means the entire Board of Directors
of the Company and not any authorized committee of the Board of Directors.
"BORROWING BASE" means, as of any date, an amount equal to (a) 85%
of the face amount of all accounts receivable owned by the Company and its
Subsidiaries as of such date that are not more than 90 days past due, plus (b)
65% of the book value (calculated on an average cost basis) of all inventory
owned by the Company and its Subsidiaries as of such date, minus (c) any
amount applied pursuant to Section 4.10(b) hereof to permanently reduce
Indebtedness permitted to be incurred pursuant to Section 4.09(b)(i) hereof,
all calculated on a consolidated basis and in accordance with GAAP. To the
extent that information is not available as to the amount of accounts
receivable or inventory as of a specific date, the Company may utilize the
most recent available information for purposes of calculating the Borrowing
Base.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL INTERESTS" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or other business entity,
any and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock, (iii) in the case of a partnership,
partnership interests (whether general or limited) and (iv) any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
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"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"CASH EQUIVALENTS" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits or demand deposits, in each
case with any lender party to any Credit Facility or with any domestic
commercial bank having capital and surplus in excess of $1.0 billion, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above, (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Ratings Service, a
division of The McGraw-Hill Companies, Inc., and in each case maturing within
six months after the date of acquisition and (vi) investments in money market
funds all of whose assets comprise securities of the types described in
clauses (i), (ii) and (iii) above.
"CEDEL" means Cedel Bank, Societe Anonyme (or any successor
securities clearing agency).
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Principals or their Related Parties, (ii)
the adoption of a plan relating to the liquidation or dissolution of the
Company, (iii) the consummation of any transaction or series of transactions
(including, without limitation, any merger or consolidation) the result of
which is that any "person" (as defined above) (other than the Principals and
their Related Parties) becomes the "beneficial owner" (as such term is defined
in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly,
of (a) 35% or more of the voting Capital Interests of the Company and (b)
more of the voting Capital Interests of the Company than are, in the
aggregate, beneficially owned by the Principals and their Related Parties at
the time of such consummation, or (iv) the first day on which a majority of
the members of the Board of Directors are not Continuing Directors. For
purposes of this definition, any transfer of an equity interest of an entity
that was formed for the purpose of acquiring voting Capital Interests of the
Company shall be deemed to be a transfer of such portion of such voting
Capital Interests as corresponds to the portion of the equity of such entity
that has been so transferred.
"COMMISSION" means the Securities and Exchange Commission.
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"COMMON STOCK" means the Common Stock, par value $.01, of the
Company.
"COMPANY" has the meaning provided in the preamble to this
Indenture.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Subsidiaries for
such period plus (i) an amount equal to any extraordinary loss plus any net
loss realized in connection with an Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions) (to the extent
such losses were deducted in computing such Consolidated Net Income), plus
(ii) the provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (iii) consolidated
interest expense of such Person and its Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iv) all items classified as "depreciation" or "amortization" on
such Person's statement of operations and other non-cash charges (including
non-cash, equity-based compensation charges, but excluding any non-cash charge
to the extent that it represents an accrual of or reserve for cash charges in
any future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Subsidiaries for such period to the
extent that such depreciation, amortization and other non-cash charges were
deducted in computing such Consolidated Net Income. Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that
the Net Income of such Subsidiary was included in calculating the Consolidated
Net Income of such Person and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Subsidiary without prior approval (that has not been obtained), pursuant to
the terms of its organizational documents and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to that Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall
be included only to the extent of the amount of dividends or distributions
paid in cash to the referent Person or a Wholly Owned Subsidiary thereof, (ii)
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the Net Income of any Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without prior approval (that has not been obtained) pursuant to the terms of
its organizational documents and all agreements, instruments, judgments,
decrees, orders, statutes, rules or governmental regulations applicable to
that Subsidiary or its stockholders, (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded, (iv) the cumulative effect of a
change in accounting principles shall be excluded, (v) Consolidated Net Income
shall not include any gain (but shall include any loss), together with any
related provision for taxes on such gain (but not such loss), realized in
connection with (A) any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions) or (B) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries
and (vi) Consolidated Net Income shall not include any extraordinary or
nonrecurring gain (but shall include any loss), together with any related
provision for taxes on such extraordinary or nonrecurring gain (but not such
loss).
"CONSOLIDATED NET WORTH" means, with respect to any Person, the sum
of (i) the consolidated equity of the holders of common Equity Interests
in such Person and its consolidated Subsidiaries plus (ii) the respective
amounts reported on such Person's most recent balance sheet with respect to
any series of preferred stock or preferred Equity Interests; provided that
the preferred stock or the preferred Equity Interests, as the case may
be, shall be included in Consolidated Net Worth only if such preferred stock
or preferred Equity Interests are not Disqualified Stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within
twelve months after the acquisition of such business) subsequent to the date
of the most recently completed fiscal quarter in the book value of any asset
owned by such Person or a consolidated Subsidiary of such Person, (y) all
investments in unconsolidated Subsidiaries and in Persons that are not
Subsidiaries (except, in each case, investments in marketable securities), and
(z) all unamortized debt discount and expense and unamortized deferred
financing charges, all of the foregoing determined in accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of
Directors on the date hereof or (ii) was nominated for election or elected to
such Board of Directors with the approval of (a) a majority of the Principals
who were beneficial owners of voting Capital Interests of the Company at the
time of such nomination or election or (b) a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
"CORPORATE TRUST OFFICE" means the office of the Trustee in
New York, New York, at 140 Broadway, 12th Floor, New York, New York 10005 or
such other location designated by the Trustee by written notice.
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"CREDIT FACILITY" means any credit facility entered into by and
among the Company, any Subsidiary Guarantor and the lending institutions party
thereto, including any credit agreement, related notes, Guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEFINITIVE NOTES" means Senior Notes that are in the form of
EXHIBIT A-1 or EXHIBIT A-2, attached hereto (but without including the text
referred to in footnotes 1 and 3 thereto).
"DEPOSITARY" means, with respect to any Global Note, the Person
specified in Section 2.03 hereof as the Depositary with respect to such Senior
Note, until a successor shall have been appointed and become such pursuant to
the applicable provision of this Indenture, and thereafter "Depositary" shall
mean or include such successor.
"DISQUALIFIED STOCK" means any Equity Interest that, by its terms
(or by the terms of any security into which it is convertible or for which it
is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part, on
or prior to the 91st day after the date on which the Senior Notes mature.
"EQUITY INTERESTS" means Capital Interests and all warrants, options
or other rights to acquire Capital Interests (but excluding any debt security
that is convertible into, or exchangeable for, Capital Interests).
"EUROCLEAR" means the Euroclear Clearance System (or any successor
securities clearing agency).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"EXCHANGE OFFER" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the
Company to each Holder of the Initial Senior Notes to exchange all the Initial
Senior Notes held by such Holder for the Exchange Senior Notes in an aggregate
principal amount equal to the aggregate principal amount of the Initial Senior
Notes held by such Holder, all in accordance with the terms and conditions
of the Registration Rights Agreement.
"EXCHANGE SENIOR NOTES" has the meaning provided in the preamble to
this Indenture.
"EXISTING INDEBTEDNESS" means the aggregate principal amount of
Indebtedness of the Company and its Subsidiaries in existence on the date
hereof, until such amounts are repaid.
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"FISCAL YEAR" means the fiscal year of the Company ending January 31
of each year.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person and its
Subsidiaries for such period to the Fixed Charges of such Person and its
Subsidiaries for such period. In the event that the Company or any of its
Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other
than borrowings under any Credit Facility) or issues or redeems preferred
stock or preferred Equity Interests subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but prior
to the date on which the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock or preferred Equity Interests, as if the same
had occurred at the beginning of the applicable four-quarter reference period.
For purposes of making the computation referred to above, (i) acquisitions
that have been made by the Company or any of its Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to
have occurred on the first day of the four-quarter reference period, (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior
to the Calculation Date, shall be excluded, and (iii) the Fixed Charges
attributable to discontinued operations, as determined in accordance with
GAAP, and operations or businesses disposed of prior to the Calculation Date,
shall be excluded, but only to the extent that the obligations giving rise to
such Fixed Charges shall not be obligations of the referent Person or any of
its Subsidiaries following the Calculation Date.
"FIXED CHARGES" means, with respect to any Person for any period,
the sum of (i) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations but excluding amortization of deferred financing fees), (ii) the
consolidated interest expense of such Person and its Subsidiaries that was
capitalized during such period, (iii) any interest expense on Indebtedness of
another Person that is Guaranteed by such Person or one of its Subsidiaries or
secured by a Lien on assets of such Person or one of its Subsidiaries (whether
or not such Guarantee or Lien is called upon) and (iv) the product of (a) the
amount of dividends or distributions paid, whether or not in cash, in respect
of preferred stock or preferred Equity Interests of such Person, other than
dividend payments on Equity Interests payable solely in Equity Interests of
the Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
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local statutory tax rates of such Person, expressed as a decimal, in the case
of clauses (i) through (iv), determined on a consolidated basis and, in the
case of clauses (i) through (iii), determined in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date hereof.
"GLOBAL NOTES" means the Regulation S Global Notes and the Rule 144A
Global Notes.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"GUARANTEED OBLIGATIONS" means, for the purposes of Article 10
hereof, Obligations under this Indenture, the Senior Notes and any Subsidiary
Guarantee.
"GUARANTOR SENIOR INDEBTEDNESS" means any Indebtedness permitted to
be incurred by any Subsidiary Guarantor under the terms hereof, unless the
instrument under which such Indebtedness is incurred expressly provides that
it is subordinated in right of payment to such Subsidiary Guarantor's
Subsidiary Guarantee. Notwithstanding the foregoing, Guarantor Senior
Indebtedness shall not include (i) any Obligation of such Subsidiary Guarantor
to any Subsidiary of such Subsidiary Guarantor, (ii) any liability for
federal, state, local or other taxes owed or owing by such Subsidiary
Guarantor, (iii) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (iv) any Indebtedness, Guarantee or
Obligation of the Subsidiary Guarantor that is contractually subordinated or
junior in any respect to any other Indebtedness, Guarantee or Obligation of
such Subsidiary Guarantor or (v) any Indebtedness incurred in violation
hereof.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) other agreements
or arrangements designed to protect such Person against fluctuations in
interest rates and (iii) agreements entered into for the purpose of fixing or
hedging the risks associated with fluctuations in foreign currency exchange
rates.
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"HELLER ARRANGEMENT" means the arrangement pursuant to an agreement
dated July 13, 1993 between the Company and Heller Intercredit Company, a
division of Heller Financial, Inc., pursuant to which the Company insured from
risk of uncollectibility a portion of the Company's accounts receivable.
"HOLDER" means a Person in whose name a Senior Note is registered.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP, as well
as all indebtedness of others secured by a Lien on any asset of such Person
(whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INDIRECT PARTICIPANT" means a Person who holds an interest in
Senior Notes through a Participant.
"INITIAL PURCHASER" means Donaldson, Lufkin & Jenrette Securities
Corporation.
"INITIAL SENIOR NOTES" has the meaning provided in the preamble to
this Indenture.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations but
excluding advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person or its
Subsidiaries in accordance with GAAP), advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary course of business), purchases or other acquisitions for
consideration consisting of Indebtedness, Equity Interests or other securities
and all other items that are or would be classified as investments on a
balance sheet prepared in accordance with GAAP; provided that an acquisition
of assets, Equity Interests or other securities by the Company for
consideration consisting of common equity securities of the Company
shall not be deemed to be an Investment.
"ISSUE DATE" means the date the Initial Senior Notes are initially
issued.
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"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York, in the city of the principal
corporate trust office of the Trustee or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date
is a Legal Holiday, payment may be made on the next succeeding day that is not
a Legal Holiday, and no interest shall accrue for the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
"LIQUIDATED DAMAGES" means all liquidated damages owing pursuant to
Section 5 of the Registration Rights Agreement.
"MIAMI LAKES FACILITY" means the land and buildings comprising the
Company's executive offices and distribution facility at 14100 N.W. 60th
Avenue, Miami Lakes, Florida 33014.
"NATIONAL TRADING FACILITY" means the land and buildings leased by
the Company from National Trading Manufacturing, Inc. located at 15595 N.W.
15th Avenue, Miami, Florida 33169.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP.
"NET PROCEEDS" means the aggregate cash proceeds received by
the Company or any of its Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, regulatory compliance costs and
sales commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), amounts
required to be applied to the repayment of Indebtedness (other than Senior
Revolving Debt) secured by a Lien on the asset or assets that were the subject
of such Asset Sale and any reserve for adjustment in respect of the sale price
of such asset or assets established in accordance with GAAP.
"NON-U.S. PERSON" means a person who is not a U.S. person, as
defined in Regulation S.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect to the
Global Notes, or any successor as such custodian, as designated by the
Depositary hereunder.
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"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
Controller, Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, principal operating officer, principal financial officer,
treasurer or principal accounting officer of the Company.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to DTC, Euroclear or Cedel, a
Person who has an account with DTC, Euroclear or Cedel, as the case may be
(and, with respect to DTC, shall include the respective depositaries in DTC
for Euroclear and Cedel).
"PERMITTED INVESTMENTS" means (a) any Investments in the Company or
in a Wholly Owned Subsidiary of the Company that is engaged in the same or a
similar or related line of business as the Company and its Subsidiaries were
engaged in on the date hereof; (b) any Investments in Cash Equivalents; (c)
Investments by the Company or any Subsidiary of the Company in a Person, if as
a result of such Investment (i) such Person becomes a Wholly Owned Subsidiary
of the Company that is engaged in the same or a similar or related line of
business as the Company and its Subsidiaries were engaged in on the date
hereof or (ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Subsidiary of the Company that
is engaged in the same or a similar or related line of business as the Company
and its Subsidiaries were engaged in on the date hereof; (d) Investments made
as a result of the receipt of non-cash consideration from an Asset Sale that
was made pursuant to and in compliance with Section 4.10 hereof;
(e) Investments in endorsements of negotiable instruments and similar
negotiable documents in the ordinary course of business; (f) Investments
existing on the date hereof; (g) Investments in obligations of account
debtors to the Company or any of its Subsidiaries and stock or obligations
issued to the Company or any such Subsidiary by any Person, in each case, in
connection with the insolvency, bankruptcy, receivership or reorganization of
such Person or a composition or readjustment of such Person's Indebtedness;
and (h) other Investments in any one or more Persons that do not exceed $5.0
million in the aggregate at any time outstanding.
"PERMITTED LIENS" means (i) Liens on accounts receivable and
inventory securing Indebtedness permitted to be incurred under Section
4.09(b)(i) hereof; (ii) Liens in favor of the Company; (iii) Liens to secure
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Indebtedness permitted to be incurred under Section 4.09(a) hereof that is
incurred to finance the acquisition of property or assets acquired by the
Company or any Subsidiary after the date hereof, so long as (A) such
Indebtedness is incurred and the Lien securing such Indebtedness is created
within 90 days of such acquisition and (B) such Lien does not extend
to any property or assets of the Company or any Subsidiary other than
the property and assets so acquired; (iv) Liens on property of a Person
existing at the time such Person is merged into, consolidated with or acquired
by the Company or any Subsidiary of the Company; provided that such Liens were
not incurred in contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or
consolidated with the Company or any Subsidiary of the Company or those of an
unrelated third party; (v) Liens on property existing at the time of
acquisition thereof by the Company or any Subsidiary of the Company, provided
that such Liens were not incurred in contemplation of such acquisition; (vi)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vii) Liens to secure Indebtedness permitted by
Section 4.09(b)(vi) hereof covering only (x) the assets acquired, constructed
or improved with such Indebtedness or (y) the Miami Lakes Facility, as the
case may be; (viii) Liens existing on the date hereof; (ix) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently pursued, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (x) Liens securing Permitted Refinancing
Indebtedness, provided that such Liens do not extend to or cover any
assets or property other than the collateral securing the Indebtedness to be
refinanced; (xi) Liens arising by operation of law in connection with
judgments, which do not give rise to an Event of Default with respect thereto;
(xii) easements, rights of way, zoning restrictions and other similar
encumbrances or title defects which do not materially detract from the value
of the property or the assets subject thereto or interfere with the ordinary
conduct of the business of the Company and its Subsidiaries, taken as a
whole; (xiii) Liens securing Attributable Debt with respect to any
sale and leaseback transaction in an aggregate amount not to exceed the
aggregate principal amount of Attributable Debt permitted to be incurred
pursuant to Section 4.09 hereof, provided that such Liens do not extend to or
cover any assets or property other than the collateral securing such
Attributable Debt; (xiv) Liens on sales of accounts receivable that do not
constitute an "Asset Sale" pursuant to clause (e) of the definition
thereof; and (xv) Liens incurred in the ordinary course of business of
the Company or any Subsidiary of the Company with respect to obligations that
(A) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the ordinary
course of business) and (B) do not in the aggregate materially detract
from the value of the property subject thereto or materially impair the use
thereof in the operation of business by the Company or such Subsidiary.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness
of the Company or any of its Subsidiaries issued in exchange for, or the net
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proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Subsidiaries; provided
that (i) the principal amount of such Permitted Refinancing Indebtedness does
not exceed the principal amount of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable
expenses incurred in connection therewith); (ii) such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date
of, and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Senior Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the Senior Notes
on terms at least as favorable to the holders of Senior Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred either by the Company or by the Subsidiary that is
the obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust or
unincorporated organization (including any subdivision or ongoing business of
any such entity or substantially all of the assets of any such entity,
subdivision or business).
"PRINCIPALS" means Rafael Kravec, E. Scott Beattie, J.W. Nevil
Thomas, Fred Berens and Richard C.W. Mauran.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on
the Senior Notes in the form set forth in Section 2.06(g) hereof.
"PUBLIC EQUITY OFFERING" means any underwritten public offering of
Common Stock pursuant to a registration statement filed under the Securities
Act.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" has the meaning specified
in Rule 144A under the Securities Act.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated the Issue Date between the Company and the Initial Purchaser.
"REGULATION S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"REGULATION S GLOBAL NOTES" means the global notes that contain the
paragraphs referred to in footnote 1 and the additional schedule referred to
in footnote 3 to the form of the Senior Note attached hereto as EXHIBIT A-2,
and that are deposited with and registered in the name of the Depositary or
its nominee, representing Senior Notes initially sold in reliance on
Regulation S.
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"RELATED PARTY" with respect to any Principal means (a) any spouse
or immediate family member of such Principal or (b) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding an 80% or more controlling interest of which
consist of such Principal and/or such other Persons referred to in the
immediately preceding clause (a).
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group 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.
"RESTRICTED BENEFICIAL INTEREST" means any beneficial interest of a
Participant or Indirect Participant in the Rule 144A Global Note or the
Regulation S Global Note.
"RESTRICTED GLOBAL NOTES" means the Regulation S Global Notes and
the Rule 144A Global Notes, all of which shall bear the Private Placement
Legend.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PERIOD" means the 40-day restricted period as defined in
Regulation S.
"RESTRICTED SECURITY" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided that the Trustee shall be entitled to
request and conclusively rely upon an Opinion of Counsel with respect to
whether any Senior Note is a Restricted Security.
"REVOLVING CREDIT FACILITY" means the revolving credit facility,
dated as of May 13, 1997, between the Company and Fleet National Bank, as
amended.
"RULE 144" means Rule 144 under the Securities Act (or any successor
provision), as it may be amended from time to time.
"RULE 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"RULE 144A GLOBAL NOTES" means the global notes that contain the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 3 to the form of the Senior Note attached hereto as EXHIBIT A-1, and
that are deposited with and registered in the name of the Depositary or its
nominee, representing Senior Notes sold in reliance on Rule 144A.
"RULE 903" means Rule 903 promulgated under the Securities Act.
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"RULE 904" means Rule 904 promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"SENIOR INDEBTEDNESS" means any Indebtedness which ranks pari passu
in right of payment with, and which is not expressly by its terms subordinated
in right of payment of principal, interest or premium, if any, to the Senior
Notes, whether or not such Indebtedness is secured.
"SENIOR NOTES" means the Initial Senior Notes and the Exchange
Senior Notes treated as a single class of securities, issued under this
Indenture, as amended or supplemented from time to time pursuant to the terms
hereof.
"SENIOR REVOLVING DEBT" means revolving credit borrowings under any
Credit Facility.
"SERIES B SENIOR NOTES" means the Company's 10 3/8% Senior Notes due
2007, Series B.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof; provided that each Subsidiary Guarantor shall be deemed a
Significant Subsidiary.
"6% BONUS POOL" means the annual bonus pool created by the Company
for members of senior management and other key employees and consultants equal
to 6% of the pre-tax profit of the Company.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness which is
expressly by its terms subordinated in right of payment of principal, interest
or premium, if any, to the Senior Notes.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of Capital Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof).
"SUBSIDIARY GUARANTOR" means any Subsidiary of the Company that
executes a Subsidiary Guarantee in accordance with the provisions hereof, and
its successors and assigns.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
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"TRANSFER RESTRICTED SECURITIES" means Senior Notes or beneficial
interests therein that bear or are required to bear the Private Placement
Legend.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UNRESTRICTED GLOBAL NOTES" means one or more Global Notes that do
not and are not required to bear the Private Placement Legend.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that shall elapse
between such date and the making of such payment, by (b) the then outstanding
principal amount of such Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such
Person, all of the outstanding Capital Interests or other ownership interests
of which (other than directors' qualifying shares or interests) shall at the
time be owned by such Person or by one or more Wholly Owned Subsidiaries of
such Person (or a combination thereof).
Section 1.02. Other Definitions
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"Affiliate Transaction". . . . . . . . . . . . . . . . . 4.11
"Agent Members". . . . . . . . . . . . . . . . . . . . . 2.15
"Asset Sale Offer" . . . . . . . . . . . . . . . . . . . 4.10
"Asset Sale Offer Price" . . . . . . . . . . . . . . . . 4.10
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . 6.01
"Change of Control Offer". . . . . . . . . . . . . . . . 4.18
"Change of Control Payment". . . . . . . . . . . . . . . 4.18
"Change of Control Payment Date" . . . . . . . . . . . . 4.18
"Covenant Defeasance". . . . . . . . . . . . . . . . . . 8.03
"Custodian". . . . . . . . . . . . . . . . . . . . . . . 6.01
"DTC". . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Event of Default" . . . . . . . . . . . . . . . . . . . 6.01
"Excess Proceeds". . . . . . . . . . . . . . . . . . . . 4.10
"Incur". . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"Legal Defeasance" . . . . . . . . . . . . . . . . . . . 8.02
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . 4.10
"Offer Period" . . . . . . . . . . . . . . . . . . . . . 3.09
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . 2.03
"Payment Default" . . . . . . . . . . . . . . . . . . . 6.01
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"Purchase Date". . . . . . . . . . . . . . . . . . . . . 3.09
"Registrar". . . . . . . . . . . . . . . . . . . . . . . 2.03
"Restricted Payments". . . . . . . . . . . . . . . . . . 4.07
"Subsidiary Guarantee" . . . . . . . . . . . . . . . . . 4.09
Section 1.03. 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:
"INDENTURE SECURITIES" means the Senior Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Senior Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Senior Notes means the Company and any successor
obligor upon the Senior Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
under the TIA have the meanings so assigned to them.
Section 1.04. RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE SENIOR NOTES
Section 2.01. FORM AND DATING
The Senior Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A-1 or EXHIBIT A-2 attached
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hereto, as applicable. The Senior Notes may have notations, legends or
endorsements required by law, stock exchange rules or usage. Each Senior Note
shall be dated the date of its authentication. The Senior Notes initially
shall be issued in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Notes shall
constitute, and are hereby expressly made, a part of this Indenture and 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.
(a) GLOBAL NOTES. Senior Notes offered and sold to QIBs in
reliance on Rule 144A shall be issued initially in the form of Rule 144A
Global Notes, which shall be deposited on behalf of the purchasers of the
Senior Notes represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Rule 144A Global
Notes may from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depositary or its nominee as hereinafter
provided.
Senior Notes offered and sold in reliance on Regulation S shall be
issued initially in the form of the Regulation S Global Note, which shall be
deposited on behalf of the purchasers of the Senior Notes represented thereby
with the Trustee, as custodian for the Depositary, and registered in the name
of the Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of Euroclear or Cedel, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
40-day Restricted Period shall be terminated upon the receipt by the Trustee
of a written certificate from the Depositary, together with copies of
certificates from Euroclear and Cedel certifying that they have received
certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Global Notes (except to the
extent of any beneficial owners thereof who acquired an interest therein
pursuant to another exemption from registration under the Securities Act and
who will take delivery of a beneficial ownership interest in a Rule 144A
Global Note, all as contemplated by Section 2.06(a)(ii) hereof).
Each Global Note shall represent such of the outstanding Senior
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Senior Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Senior Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and transfers of interests.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Senior Notes represented thereby shall
be made by the Trustee or the Note Custodian, at the direction of the
Registrar, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the
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"Management Regulations" and "Instructions to Participants" of Cedel shall be
applicable to interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel. The Trustee shall have no obligation
to notify Holders of any such procedures or to monitor or enforce compliance
with the same.
Except as set forth in Section 2.06 hereof, the Global Notes
may be transferred, in whole and not in part, only to another nominee of the
Depositary or to a successor of the Depositary or its nominee.
(b) BOOK-ENTRY PROVISIONS. This Section 2.01(b) shall apply only
to Rule 144A Global Notes and Regulation S Global Notes deposited with or on
behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(b), authenticate and deliver the Global Notes that (i) shall
be registered in the name of the Depositary or the nominee of the Depositary
and (ii) shall be delivered by the Trustee to the Depositary or pursuant to
the Depositary's instructions or held by the Trustee, as custodian for the
Depositary.
Participants shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the
Note Custodian as custodian for the Depositary or under such Global Note, and
the Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such Depositary
governing the exercise of the rights of an owner of a beneficial interest in
any Global Note.
(c) DEFINITIVE NOTES. Senior Notes issued in certificated form
shall be substantially in the form of EXHIBIT A-1 or EXHIBIT A-2, as
applicable, attached hereto (but without including the text referred to in
footnotes 1 and 3 thereto).
Section 2.02. EXECUTION AND AUTHENTICATION
An Officer shall sign the Senior Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Senior Note no longer
holds that office at the time a Senior Note is authenticated, the Senior Note
shall nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Senior Note has been authenticated under this Indenture.
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The form of Trustee's certificate of authentication to be borne by the Senior
Notes shall be substantially as set forth in EXHIBIT A-1 or EXHIBIT A-2
hereto, as applicable.
The Trustee shall, upon a written order of the Company signed by an
Officer directing the Trustee to authenticate the Senior Notes, authenticate
Senior Notes for original issue up to the aggregate principal amount stated in
paragraph 4 of the Senior Notes. The Trustee shall, upon written order of the
Company signed by an Officer, authenticate Exchange Senior Notes for original
issuance in exchange for a like principal amount of Initial Senior Notes
exchanged in the Exchange Offer or otherwise exchanged for Exchange Senior
Notes pursuant to the terms of the Registration Rights Agreement. The
aggregate principal amount of Senior Notes outstanding at any time may not
exceed the aggregate principal amount stated in paragraph 4 of the Senior
Notes, except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Senior Notes. An authenticating agent may
authenticate Senior Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal
with the Company or an Affiliate of the Company.
Section 2.03. REGISTRAR AND PAYING AGENT
The Company shall maintain (i) an office or agency in the City of
New York where Senior Notes may be presented for registration of transfer or
for exchange ("Registrar") and (ii) an office or agency in the City of New
York where Senior Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Senior Notes and of their transfer and
exchange. The Company may appoint one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Note Custodian with respect to the Global Notes
and as such, the Trustee shall be entitled to appropriate compensation in
accordance with Section 7.07 hereof. The Company initially appoints the
Trustee to act as the Registrar and Paying Agent with respect to the
Definitive Notes.
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Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the 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, premium or Liquidated Damages, if any, or interest on the Senior
Notes, and shall notify the Trustee of any Default by the Company in making
any such payment. While any such Default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company
or a Subsidiary) shall have no further liability for the money delivered to
the Trustee. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon the occurrence of events specified in
Section 6.01(h) hereof, the Trustee shall serve as Paying Agent for the Senior
Notes.
Section 2.05. HOLDER 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
all Holders and shall otherwise comply with TIA ss.ss. 312(a). If the Trustee
is not the Registrar, the Company and the Subsidiary Guarantors, if any, shall
furnish to the Trustee at least seven (7) 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 the Holders of Senior Notes and the Company and the
Subsidiary Guarantors, if any, shall otherwise comply with TIA ss. 312(a).
Section 2.06. TRANSFER AND EXCHANGE
(a) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN GLOBAL NOTES.
The transfer and exchange of beneficial interests in Global Notes shall be
effected through the Depositary, in accordance with this Indenture and the
procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Beneficial interests in a Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Global Note in accordance with the transfer restrictions set forth in
subsection (g) of this Section 2.06 or in an Unrestricted Global Note in
accordance with subsection (g)(iv). Transfers of beneficial interests in
the Global Notes to Persons required to take delivery thereof in the form of
an interest in another Global Note shall be permitted as follows:
(i) RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE.
If, at any time after the expiration of the 40-day Restricted
Period, an owner of a beneficial interest in a Rule 144A Global
Note deposited with the Depositary (or the Note Custodian)
wishes to transfer its beneficial interest in such Rule 144A
Global Note to Person who is required or permitted to take
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delivery thereof in the form of an interest in a Regulation S
Global Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest for
an equivalent beneficial interest in a Regulation S Global
Note as provided in this Section 2.06(a)(i). Upon receipt by
the Trustee, as Registrar, of (1) an order by the Depositary or
its authorized representative with respect to instructions
given in accordance with the Applicable Procedures from a
Participant directing the Depositary to credit or cause to be
credited a beneficial interest in the Regulation S Global Note
in an amount equal to the beneficial interest in the Rule 144A
Global Note to be exchanged and (2) a certificate in the form
of EXHIBIT B-1 hereto given by the owner of such beneficial
interest stating that the transfer of such interest has been
made in compliance with the transfer restrictions applicable to
the Global Notes and pursuant to and in accordance with Rule
903 or Rule 904 of Regulation S, then the Trustee, as
Registrar, shall reduce or cause to be reduced the aggregate
principal amount at maturity of the applicable Rule 144A Global
Note and increase or cause to be increased the aggregate
principal amount at maturity of the applicable Regulation S
Global Note by the principal amount at maturity of the
beneficial interest in the Rule 144A Global Note to be
exchanged or transferred, and the Depositary shall credit or
cause to be credited to the account of the relevant Participant
with respect to such exchange or transfer a beneficial interest
in the Regulation S Global Note equal to the reduction in the
aggregate principal amount at maturity of the Rule 144A Global
Note and shall debit or cause to be debited from the account of
the relevant Participant with respect to such exchange or
transfer the beneficial interest in the Rule 144A Global Note
that is being exchanged or transferred.
(ii) REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE. If, at
any time, after the expiration of the 40-day Restricted Period,
an owner of a beneficial interest in a Regulation S Global Note
deposited with the Depositary (or with the Trustee as custodian
for the Depositary) wishes to transfer its beneficial interest
in such Regulation S Global Note to a Person who is required or
permitted to take delivery thereof in the form of an interest
in a Rule 144A Global Note, such owner shall, subject to the
Applicable Procedures, exchange or cause the exchange of such
interest for an equivalent beneficial interest in a Rule 144A
Global Note as provided in this Section 2.06(a)(ii). Upon
receipt by the Trustee, as Registrar, of (1) an order by the
Depositary or its authorized representative with respect to
instructions given in accordance with Applicable Procedures
from a Participant directing the Depositary to credit or cause
to be credited a beneficial interest in the Rule 144A Global
Note in an amount equal to the beneficial interest in the
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Regulation S Global Note to be exchanged and (2) a certificate
in the form of EXHIBIT B-2 hereto given by the owner of such
beneficial interest stating (A) if the transfer is pursuant to
Rule 144A, that the Person transferring such interest in a
Regulation S Global Note reasonably believes that the Person
acquiring such interest in a Rule 144A Global Note is a QIB and
is obtaining such beneficial interest in a transaction meeting
the requirements of Rule 144A and any applicable blue sky or
securities laws of any State of the United States, (B) that the
transfer complies with the requirements of Rule 144 under the
Securities Act or (C) if the transfer is pursuant to any other
exemption from the registration requirements of the Securities
Act, that the transfer of such interest has been made in
compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the
requirements of the exemption claimed, such statement to be
supported by an Opinion of Counsel from the transferee or the
transferor in form reasonably acceptable to the Company and in
each case, in accordance with any applicable securities laws of
any State of the United States or any other applicable
jurisdiction, then the Trustee, as Registrar, shall reduce or
cause to be reduced the aggregate principal amount at maturity
of such Regulation S Global Note and increase or cause to be
increased the aggregate principal amount at maturity of the
applicable Rule 144A Global Note by the principal amount at
maturity of the beneficial interest in the Regulation S Global
Note to be exchanged or transferred, and the Depositary shall
credit or cause to be credited to the account of the relevant
Participant with respect to such exchange or transfer a
beneficial interest in the applicable Rule 144A Global Note
equal to the reduction in the aggregate principal amount at
maturity of such Regulation S Global Note and debit or cause to
be debited from the account of the relevant Participant with
respect to such exchange or transfer the beneficial interest in
the Regulation S Global Note that is being exchanged or
transferred.
(b) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive
Notes are presented by a Holder to the Registrar with a request to register
the transfer of the Definitive Notes or to exchange such Definitive Notes for
an equal principal amount of Definitive Notes of other authorized
denominations, the Registrar shall register the transfer or make the exchange
as requested only if:
(i) the Definitive Notes are presented or surrendered for
registration of transfer or exchange, endorsed and containing a
signature guarantee or accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney (duly authorized in writing) and
containing a signature guarantee; and (ii) in the case of
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Definitive Notes that are Transfer Restricted Securities,
the Registrar has received the following documentation, as
applicable (all of which may be submitted by facsimile):
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for registration in
the name of such Holder, without transfer, or such
Transfer Restricted Security is being transferred to the
Company, a certification to that effect from such Holder
(in substantially the form of EXHIBIT B-3 hereto); or
(B) if such Transfer Restricted Security is being
transferred to a QIB in accordance with Rule 144A under
the Securities Act or pursuant to the exemption from
registration in accordance with Rule 144 under the
Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form of
EXHIBIT B-3 hereto); or
(C) if such Transfer Restricted Security is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 904 under the
Securities Act, a certification to that effect from such
Holder (in substantially the form of EXHIBIT B-3 hereto);
or
(D) if such Transfer Restricted Security is being
transferred in reliance on any other exemption from the
registration requirements of the Securities Act, a
certification to that effect from such Holder (in
substantially the form of EXHIBIT B-3 hereto) and an
Opinion of Counsel from such Holder or the transferee
reasonably acceptable to the Company to the effect that
such transfer is in compliance with the Securities Act.
(c) TRANSFER OF A BENEFICIAL INTEREST IN A RULE 144A GLOBAL
NOTE OR REGULATION S GLOBAL NOTE FOR A DEFINITIVE NOTE.
(i) Any Person having a beneficial interest in a Rule 144A
Global Note or Regulation S Global Note may upon request,
subject to the Applicable Procedures, exchange such beneficial
interest for a Definitive Note. Upon receipt by the Trustee,
as Registrar, of an order by the Depositary or its authorized
representative with respect to instructions given in accordance
with Applicable Procedures from a Participant as to a
beneficial interest in a Rule 144A Global Note or Regulation S
Global Note, and, in the case of a Transfer Restricted
Security, the following additional information and documents
(all of which may be submitted by facsimile):
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(A) if such beneficial interest is being transferred to
the Person designated by the Depositary as being the
beneficial owner, a certification to that effect from such
Person (in substantially the form of EXHIBIT B-4 hereto);
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act
or pursuant to the exemption from registration in
accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the
transferor (in substantially the form of EXHIBIT B-4
hereto);
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance
with Rule 904 under the Securities Act, a certification to
that effect from the transferor (in substantially the form
of EXHIBIT B-4 hereto); or
(D) if such beneficial interest is being transferred in
reliance on any other exemption from the registration
requirements of the Securities Act, a certification to
that effect from the transferor (in substantially the form
of EXHIBIT B-4 hereto) and an Opinion of Counsel from the
transferee or the transferor reasonably acceptable to the
Company to the effect that such transfer is in compliance
with the Securities Act, in which case the Trustee, as
Registrar, shall, upon at least 20 days' prior written
notice, cause the aggregate principal amount of Rule 144A
Global Note or Regulation S Global Note being exchanged or
transferred to be reduced accordingly, the Depositary
shall debit or cause to be debited from the account of the
relevant Participant with respect to such exchange or
transfer the beneficial interest in such 144A Global Note
or Regulation S Global Note and, following such deduction,
the Company shall execute and, the Trustee shall
authenticate and deliver to the transferee, a Definitive
Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Rule 144A Global Note or Regulation S Global
Note, as applicable, pursuant to this Section 2.06(c) shall be
registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or
indirect Participants or otherwise, shall instruct the Trustee,
as Registrar. The Trustee shall deliver or mail such
Definitive Notes to the Persons in whose names such Notes are
so registered. Following any such issuance of Definitive Notes,
the Trustee, as Registrar, shall instruct the Depositary to
reduce or cause to be reduced the aggregate principal amount at
maturity of the applicable Global Note to reflect the transfer.
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(d) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), a Global Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(e) TRANSFER AND EXCHANGE OF A DEFINITIVE NOTE FOR A BENEFICIAL
INTEREST IN A GLOBAL NOTE.
When a Definitive Note is presented by a Holder to the Registrar with a
request to register the transfer of the Definitive Note to a Person who is
required or permitted to take delivery thereof in the form of an interest in a
Global Note, or to exchange such Definitive Note for an equal interest in a
Global Note, the Registrar shall register the transfer or make the exchange as
requested only if (i) the Definitive Note is presented or surrendered for
registration of transfer or exchange, endorsed and containing a signature
guarantee or accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by such Holder or by his attorney
(duly authorized in writing) and containing a signature guarantee and (ii) in
the case of Definitive Notes that are Transfer Restricted Securities (other
than Transfer Restricted Securities that are being exchanged or transferred in
accordance with the transfer restrictions set forth in subsection (g)(iv) of
this Section 2.06), the Registrar has received the following documentation, as
applicable (all of which may be submitted by facsimile):
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of such
Holder, without transfer, or such Transfer Restricted Security
is being transferred to the Company, a certification to that
effect from such Holder (in substantially the form of EXHIBIT
B-3 hereto); or
(B) if such Transfer Restricted Security is being transferred
to a QIB in accordance with Rule 144A under the Securities Act
or pursuant to the exemption from registration in accordance
with Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from such Holder (in substantially
the form of EXHIBIT B-3 hereto); or
(C) if such Transfer Restricted Security is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 904 under the Securities Act, a certification to that
effect from such Holder (in substantially the form of EXHIBIT
B-3 hereto); or
(D) if such Transfer Restricted Security is being transferred
in reliance on any other exemption from the registration
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requirements of the Securities Act, a certification to that
effect from such Holder (in substantially the form of EXHIBIT
B-3 hereto) and an opinion of Counsel from such Holder or the
transferee reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act.
The Note Custodian or the Trustee shall (or, if at any time the
Trustee ceases to be the Registrar, shall upon receipt from the
Registrar of written notification that the foregoing
documentation has been received by the Registrar) cancel the
Definitive Note and increase or cause to be increased the
aggregate principal amount of the appropriate Global Note.
(f) AUTHENTICATION OF DEFINITIVE NOTES IN ABSENCE OF DEPOSITARY.
If at any time:
(i) the Depositary for the Senior Notes (x) notifies the
Company that the Depositary is unwilling or unable to continue
as Depositary for the Global Notes and a successor Depositary
for the Global Notes is not appointed by the Company within 90
days after delivery of such notice or (y) has ceased to be a
clearing agency registered under the Exchange Act;
(ii) the Company, at its option, notifies the Trustee in
writing that it elects to cause the issuance of Definitive
Notes under this Indenture; or
(iii) there shall have occurred and be continuing a
Default or Event of Default with respect to the Senior Notes,
then, upon surrender of the Global Notes, the Company shall
execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof,
authenticate and deliver, Definitive Notes in an aggregate
principal amount equal to the principal amount of the Global
Notes in exchange for such Global Notes.
(g) LEGENDS.
(i) Except as permitted by the following paragraphs
(ii), (iii) and (iv), each Senior Note certificate evidencing
Global Notes and Definitive Notes (and all Notes issued in
exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
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(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (As
defined in Rule 144A under the Securities Act) (A "QIB") OR (B) IT HAS
ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE COMPANY, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND IN THE CASE
OF CLAUSE (D) OR (E) BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY IF THE COMPANY SO REQUESTS) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND, AND
(4) ACKNOWLEDGES THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) pursuant to Rule 144 under the
Securities Act or pursuant to an effective registration
statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that
is a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the
legend set forth in (i) above and rescind any restriction
on the transfer of such Transfer Restricted Security upon
receipt of a certification from the transferring Holder
substantially in the form of EXHIBIT B-3 hereto,
indicating paragraph number four or six thereof; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set
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forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(a) and (b) hereof;
provided, however, that with respect to any request
for an exchange of a Transfer Restricted Security that is
represented by a Global Note for a Definitive Note that
does not bear the legend set forth in (i) above he Holder
thereof shall certify in writing to the Registrar that
such request is being made pursuant to Rule 144 or
pursuant to an effective registration statement under the
Securities Act (such certification to be substantially in
the form of EXHIBIT B-4 hereto, indicating paragraph
number three or four thereof).
(iii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) in reliance on any exemption from
the registration requirements of the Securities Act (other than
exemptions pursuant to Rule 144A or Rule 144 under the
Securities Act) in which the Holder or the transferee provides
an Opinion of Counsel to the Company in form and substance
reasonably acceptable to the Company (which Opinion of
Counsel shall also state that the transfer restrictions
contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that
is a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the
legend set forth in (i) above and rescind any restriction
on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set
forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(a) and (b) hereof.
(iv) Notwithstanding the foregoing, upon the consummation of
the Exchange Offer in accordance with the Registration
Rights Agreement, the Company shall issue and, upon receipt of
an authentication order in accordance with Section 2.02 hereof,
the Trustee shall authenticate (i) one or more Unrestricted
Global Notes in aggregate principal amount equal to the
principal amount of the Restricted Beneficial Interests
tendered for acceptance by Persons that certify in the
applicable letter of transmittal that they (x) are acquiring
the Senior Notes in the ordinary course of business, (y) are
not participating in the distribution of the Notes and (z) are
not affiliates (as defined in Rule 144) of the Company, and
that are accepted for exchange in the Exchange Offer, and
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(ii) Definitive Notes that do not bear the Private Placement
Legend in an aggregate principal amount equal to the principal
amount of the Definitive Notes accepted for exchange in the
Exchange Offer, subject to delivery by such Person of the
certification described in clause (i). Such Senior Notes shall
be Exchange Senior Notes denominated as Series D in the form of
Senior Note attached hereto as Exhibit A-1 or Exhibit A-2 with
appropriate modifications as described in the footnotes
thereto. Concurrently with the issuance of such Senior Notes,
the Trustee, as Registrar, shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced
accordingly and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the
appropriate principal amount.
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time
as all beneficial interests in any Global Note have been exchanged
for Definitive Notes, redeemed, repurchased or canceled, such Global
Note shall be returned to or retained and canceled by the Trustee,
as Registrar, in accordance with Section 2.11 hereof. At any time
prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or
canceled, the principal amount of Senior Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Trustee or the Note Custodian, at
the direction of the Registrar, to reflect such reduction.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global
Notes and Definitive Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any stamp or
transfer tax or similar governmental charge payable in
connection therewith (other than any such stamp or transfer
taxes or similar governmental charge payable upon exchange
or transfer pursuant to Sections 2.10, 3.06, 4.10, 4.18 and
9.05 hereto).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or
Definitive Notes shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.
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(iv) The Registrar shall not be required:(A) to issue, to
register the transfer of or to exchange Senior Notes during a
period beginning at the opening of fifteen (15) days before the
day of any selection of Senior Notes for redemption under
Section 3.02 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to
exchange any Senior Note so selected for redemption in whole or
in part, except the unredeemed portion of any Senior Note being
redeemed in part.
(v) Prior to due presentment for the registration of a
transfer of any Senior Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name any Senior
Note is registered as the absolute owner of such Senior Note
for the purpose of receiving payment of principal of and
interest on such Senior Notes and for all other purposes, and
neither the Trustee, any Agent nor the Company shall be
affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02
hereof.
Notwithstanding anything herein to the contrary, as to any
certifications and certificates delivered to the Registrar pursuant to this
Section 2.06, the Registrar's duties shall be limited to confirming that any
such certifications and certificates delivered to it are in the form of
Exhibit B attached hereto. The Registrar shall not be responsible for
confirming the truth or accuracy of representations made in any such
certifications or certificates.
Section 2.07. Replacement Senior Notes
If any mutilated Senior Note is surrendered to the Trustee,
or the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Senior Note, the Company shall issue and the
Trustee, upon the written order of the Company signed by an Officer of the
Company, shall authenticate a replacement Senior Note if the Trustee's
requirements for replacement of Senior Notes are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that
is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss
that any of them may suffer if a Senior Note is replaced. The Company and the
Trustee may charge for their expenses in replacing a Senior Note.
Every replacement Senior Note is an additional obligation of
the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Senior Notes duly issued hereunder.
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Section 2.08. Outstanding Senior Notes
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation, and those described in this Section 2.08 as not
outstanding. Except as set forth in Section 2.09 hereof, a Senior Note does
not cease to be outstanding because the Company or any Subsidiary of the
Company or an Affiliate of the Company or any Subsidiary of the Company holds
the Senior Note.
If a Senior Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Senior Note is held by a bona fide
purchaser.
If the principal amount of any Senior Note is considered
paid under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.
If the Paying Agent, other than the Company, holds, on a
redemption date or maturity date, money sufficient to pay Senior Notes payable
on that date, then on and after that date such Senior Notes shall be deemed to
be no longer outstanding and shall cease to accrue interest.
Section 2.09. Treasury Senior Notes
In determining whether the Holders of the required principal
amount of Senior Notes have concurred in any direction, waiver or consent,
Senior Notes owned by the Company or any Subsidiary of the Company, or by any
Affiliate of the Company or any Subsidiary of the Company, shall be considered
as though not Outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Senior Notes a Responsible Officer of the Trustee knows are so
owned shall be so disregarded. Senior Notes so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
reasonable satisfaction of the Trustee the pledgee's right so to act with
respect to such Senior Notes and that the pledgee is not the Company or any
obligor upon the Senior Notes or any Affiliate of the Company or such obligor.
Notwithstanding the foregoing, Senior Notes that are to be acquired by the
Company or any Subsidiary Guarantor or an Affiliate of the Company or any
Subsidiary of the Company pursuant to an exchange offer, tender offer or other
agreement shall not be deemed to be owned by such entity until legal title to
such Senior Notes passes to such entity.
Section 2.10. Temporary Senior Notes
Until Senior Notes, in definitive form, are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Senior Notes
upon a written order of the Company signed by an Officer of the Company.
Temporary Senior Notes shall be substantially in the form of Senior Notes, in
definitive form, but may have variations that the Company considers
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appropriate for temporary Senior Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall upon receipt of a written
order of the Company signed by an Officer authenticate Senior Notes, in
definitive form, in exchange for temporary Senior Notes.
Holders of temporary Senior Notes shall be entitled to all
of the benefits of this Indenture.
Section 2.11. Cancellation
The Company at any time may deliver to the Trustee for
cancellation any Senior Notes previously authenticated and delivered hereunder
or which the Company may have acquired in any manner whatsoever, and all
Senior Notes so delivered shall be promptly canceled by the Trustee. All
Senior Notes surrendered for registration of transfer, exchange or payment, if
surrendered to any Person other than the Trustee, shall be delivered to the
Trustee. The Trustee and no one else shall cancel all Senior Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation. Subject to Section 2.07 hereof, the Company may not issue new
Senior Notes to replace Senior Notes that it has redeemed or paid or that
have been delivered to the Trustee for cancellation. All canceled Senior
Notes held by the Trustee shall be destroyed (subject to the record retention
requirement of the Exchange Act) and certification of their destruction
delivered to the Company, unless by a written order, signed by an Officer of
the Company, the Company shall direct that canceled Senior Notes be returned
to it.
Section 2.12. Defaulted Interest
If the Company or any Subsidiary Guarantor defaults in a
payment of interest on the Senior Notes, it shall pay the defaulted interest
in any lawful manner plus, to the extent lawful, interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special
record date, which date shall be at the earliest practicable date but
in all events at least five (5) Business Days prior to the payment date, in
each case at the rate provided in the Senior Notes and in Section 4.01 hereof.
The Company shall, with the consent of the Trustee, fix or cause to be fixed
each such special record date and payment date, and shall promptly thereafter,
notify the Trustee in writing of the amount of defaulted interest proposed to
be paid on each Senior Note and the date of the proposed payment. At least
fifteen (15) days before the special record date, the Company (or, upon the
request of the Company, the Trustee, in the name and at the expense of the
Company) shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest
to be paid.
Section 2.13. Record Date
The record date for purposes of determining the identity of
Holders of the Senior Notes entitled to vote or consent to any action by vote
or consent authorized or permitted under this Indenture shall be determined as
provided for in TIA ss.ss. 316 (c).
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Section 2.14. Computation of Interest
Interest on the Senior Notes shall be computed on the basis
of a 360-day year comprised of twelve 30-day months.
Section 2.15. CUSIP Number
The Company in issuing the Senior Notes may use a "CUSIP"
number, and if it does so, the Trustee shall use the CUSIP number 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 Senior Notes and
that reliance may be placed only on the other identification numbers printed
on the Senior Notes. The Company shall promptly notify the Trustee of any
change in the CUSIP number.
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee
If the Company elects to redeem Senior Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 45 days (or such shorter time that is acceptable to the
Trustee) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Senior Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Senior Notes to Be Redeemed
If less than all of the Senior Notes are to be redeemed at
any time, selection of Senior Notes for redemption shall be made by the
Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Senior Notes are listed, or, if the
Senior Notes are not so listed, on a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate, provided that no Senior Notes
of $1,000 or less shall be redeemed in part. Notices 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 Senior Notes to be redeemed at its
registered address. If any Senior Note is to be redeemed in part only, the
notice of redemption that relates to such Senior Note shall state the portion
of the principal amount thereof to be redeemed. A new Senior Note in
principal amount equal to the unredeemed portion thereof shall be
issued in the name of the Holder thereof upon cancellation of the original
Senior Note. On and after the redemption date, interest ceases to accrue on
Senior Notes or portions of them called for redemption unless the Company
defaults in making such redemption payment.
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The Trustee shall promptly notify the Company in writing of
the Senior Notes selected for redemption and, in the case of any Senior Note
selected for partial redemption, the principal amount thereof to be redeemed.
Senior Notes and portions of them selected shall be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Senior Notes of a Holder
are to be redeemed, the entire outstanding amount of Senior Notes held
by such Holder, even if not a multiple of $1,000, shall be redeemed. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Senior Notes called for redemption also apply to portions of Senior Notes
called for redemption.
Section 3.03. Notice of Redemption
Subject to the provisions of Section 3.09 hereof, at least
30 days but not more than 60 days before a redemption date, the Company shall
mail or cause to be mailed, by first class mail, a notice of redemption to
each Holder whose Senior Notes are to be redeemed at its registered address.
The notice shall identify the Senior Notes to be redeemed
and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Note is being redeemed in part, the
portion of the principal amount of such Senior Note to be redeemed and that,
after the redemption date upon surrender of such Senior Note, a new Senior
Note or Senior Notes in principal amount equal to the unredeemed
portion shall be issued;
(d) the name and address of the Paying Agent;
(e) that Senior Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Senior Notes called for redemption ceases to
accrue on and after the redemption date and the only remaining right of the
Holders is to receive payment of the redemption price upon surrender to the
Paying Agent of the Senior Notes to be redeemed;
(g) the paragraph of the Senior Notes and/or Section of
this Indenture pursuant to which the Senior Notes called for redemption are
being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Senior Notes.
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At the Company's request, the Trustee shall give the notice
of redemption in the name of the Company and at its expense; provided that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date (or such shorter time that is acceptable to the Trustee),
an Officers' Certificate requesting that the Trustee give such notice
and setting forth the information to be stated in such notice as provided in
the preceding paragraph.
Section 3.04. Effect of Notice of Redemption
Once notice of redemption is mailed in accordance with
Section 3.03 hereof, Senior Notes called for redemption become due and payable
on the redemption date at the redemption price.
Section 3.05. Deposit of Redemption Price
One Business Day prior to the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent immediately available
funds sufficient to pay the redemption price of and accrued interest on all
Senior Notes to be redeemed on that date. The Trustee or the Paying Agent
shall promptly return to the Company any money deposited with the Trustee or
the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Senior Notes to be redeemed.
On and after the redemption date, interest shall cease to
accrue on the Senior Notes or the portions of Senior Notes called for
redemption unless the Company defaults in making such redemption payment. If
a Senior Note is redeemed on or after an interest record date but on or prior
to the related interest payment date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Senior Note was registered at
the close of business on such record date. If any Senior Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall
be paid on the unpaid principal, from the redemption date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Senior Notes and in
Section 4.01 hereof.
Section 3.06. Senior Notes Redeemed in Part
Upon surrender of a Senior Note that is redeemed in part, the
Company shall issue and the Trustee shall authenticate for the Holder of the
Senior Notes at the expense of the Company a new Senior Note equal in
principal amount to the unredeemed portion of the Senior Note surrendered.
Section 3.07. Optional Redemption
(a) The Senior Notes shall not be redeemable at the Company's
option prior to May 15, 2002. Thereafter, the Senior Notes shall be subject
to redemption at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' notice from the Trustee to the Holders, in cash
<PAGE>
<PAGE>
at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period
beginning on May 15 of the years indicated below:
</TABLE>
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2002 . . . . . . . . . . . . . . . 105.188%
2003 . . . . . . . . . . . . . . . 103.458%
2004 . . . . . . . . . . . . . . . 101.729%
2005 and thereafter. . . . . . . . 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to May 15,
2000, the Company, at its option, may on any one or more occasions redeem up
to 35% of the initially outstanding aggregate principal amount of Senior Notes
at a redemption price equal to 109 3/8% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereon to the redemption date, with the
net proceeds of one or more Public Equity Offerings of the Company generating
in each case net proceeds of at least $15.0 million; provided that at least
65% of the initially outstanding aggregate principal amount of Senior Notes
remains outstanding immediately after the occurrence of any such redemption;
and provided, further, that such redemption shall occur within 60 days of
the date of the closing of any such Public Equity Offering of the Company.
Section 3.08. Mandatory Redemption
Except as set forth under Sections 4.10 and 4.18 of this
Indenture, the Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Senior Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds
In the event that, pursuant to Section 4.10 hereof, the Company
shall commence an Asset Sale Offer, it shall follow the procedures specified
below:
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period
(the "Purchase Date"), the Company shall purchase the Offer Amount or, if less
than the Offer Amount has been tendered, all Senior Notes tendered in response
to the Asset Sale Offer.
If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued interest shall be
paid to the Person in whose name a Senior Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Senior Notes pursuant to the Asset Sale Offer.
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<PAGE>
Upon the commencement of any Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders of
the Senior Notes. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Senior Notes pursuant to the Asset
Sale Offer. The notice, which shall govern the terms of the Asset Sale Offer,
shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price pursuant to Section 4.10
and the Purchase Date;
(c) that any Senior Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that any Senior Note accepted for payment pursuant to
the Asset Sale Offer shall cease to accrue interest after the Purchase Date
unless the Company defaults in making such payment;
(e) that Holders electing to have a Senior Note purchased pursuant
to any Asset Sale Offer shall be required to surrender the Senior Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Senior Note completed, to the Company, a depository, if appointed by the
Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(f) that Holders shall be entitled to withdraw their election if
the Company, depository or Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Senior Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have the Senior Note
purchased;
(g) that, if the aggregate principal amount of Senior Notes
surrendered by Holders exceeds the Offer Amount, the Trustee shall select the
Senior Notes to be purchased on a pro rata basis (with such adjustments as may
be deemed appropriate by the Company so that only Senior Notes in
denominations of $1,000, or integral multiples thereof, shall be purchased);
and
(h) that Holders whose Senior Notes were purchased only in
part shall be issued new Senior Notes equal in principal amount to the
unpurchased portion of the Senior Notes surrendered.
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Senior Notes or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Senior Notes or portions thereof tendered, and deliver to the
<PAGE>
<PAGE>
Trustee an Officers' Certificate stating that such Senior Notes or portions
thereof were accepted for payment by the Company in accordance with the terms
of this Section 3.09. The Company, depository or Paying Agent, as the case
may be, shall promptly (but in any case not later than five days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Senior Note tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Senior Note,
and the Trustee shall authenticate and mail or deliver such new Senior Note to
such Holder equal in principal amount to any unpurchased portion of the Senior
Note surrendered. Any Senior Note 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 Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Notes
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Senior Notes on the dates and in the manner
provided in the Senior Notes. Principal, premium, if any, and interest shall
be considered paid on the date due if the Paying Agent, other than the
Company, holds as of 10:00 a.m. Eastern Time on the due date money deposited
by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to the then applicable interest rate on the Senior Notes to the extent
lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate 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 (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Senior Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Senior Notes 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 Corporate Trust Office of the Trustee.
<PAGE>
<PAGE>
The Company may also from time to time designate one or more
other offices or agencies where the Senior Notes 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 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 designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
Section 4.03. Reports
(a) So long as any of the Senior Notes remain outstanding, the
Company shall submit to the Trustee copies of all quarterly and annual
financial reports and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the Commission may by rules
and regulations prescribe) which the Company is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act, and the
Company, or the Trustee at the request and expense of the Company, shall mail
the same to the Holders at their addresses appearing in the register of Senior
Notes maintained by the Registrar, in each case, within 15 days of filing with
the Commission. If the Company is not subject to the requirements of such
Section 13 or 15(d) of the Exchange Act, the Company shall nevertheless
continue to submit to the Trustee (i) the annual and quarterly financial
statements, including any notes thereto (and, with respect to annual reports,
an auditors' report by an accounting firm of established national reputation),
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations," comparable to that which would have been required to
appear in annual or quarterly reports filed under Section 13 or 15(d) of the
Exchange Act and (ii) all current reports that would be required to be filed
with the Commission on Form 8-K if the Company were required to file such
reports, and the Company shall file a copy of such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing), and the Company or the Trustee, at the request and
expense of the Company, shall mail the same to the Holders within 120 days
after the end of each of the Company's Fiscal Years and within 60 days after
the end of each of the first three quarters of each such Fiscal Year. The
Company shall make such information available to securities analysts and
prospective investors upon request. The Company shall also comply with the
provisions of TIA ss.ss. 314(a).
(b) The Company shall in advance of the deadlines specified in
Section 4.03(a) hereof provide the Trustee with a sufficient number of copies
of all reports and other documents and information that the Trustee may be
required to deliver to the Holders of the Senior Notes under this Section
4.03.
<PAGE>
<PAGE>
Section 4.04. Compliance Certificate
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each Fiscal Year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding Fiscal
Year has been made under the supervision of the signing Officers with a view
to determining whether each has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge each entity
has kept, observed, performed and fulfilled each and every covenant contained
in this Indenture and is not in default in the performance or observance of
any of the terms, provisions and conditions of this Indenture (or, if a
Default or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which he or she may have knowledge and what action
each is taking or proposes to take with respect thereto) and that to the
best of his or her knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of or interest, if any,
on the Senior Notes is prohibited or if such event has occurred, a description
of the event and what action each is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention which would lead them to believe that the Company has
violated any provisions of Sections 4.01, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11,
4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 or 4.21 hereof or Article 5 of
this Indenture or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for any failure to
obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of (i) any Default or Event of Default or (ii) any event of default under any
Indebtedness referred to in Section 6.01(e) hereof, an Officers' Certificate
specifying such Default, Event of Default or default and what action the
Company is taking or proposes to take with respect thereto.
Section 4.05. Taxes
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except as contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material
respect to the Holders of the Senior Notes.
<PAGE>
<PAGE>
Section 4.06. Stay, Extension and Usury Laws
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.07. Restricted Payments
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or
make any distribution on account of the Company's or any of its Subsidiaries'
Equity Interests (including, without limitation, any such distribution by
such Persons in connection with any merger or consolidation involving the
Company) (other than dividends or distributions payable in Equity Interests
(other than Disqualified Stock) of the Company or dividends or distributions
payable to the Company or any Subsidiary of the Company); (ii) purchase,
redeem or otherwise acquire or retire for value any Equity Interests of the
Company or any direct or indirect parent of the Company; (iii) make any
principal payment on, or purchase, redeem, defease or otherwise acquire or
retire for value any Subordinated Indebtedness, except at scheduled maturity;
or (iv) make any Restricted Investment (all such payments and other actions
set forth in clauses (i) through (iv) above being collectively referred to as
"RESTRICTED PAYMENTS"), unless, at the time of and after giving effect to such
Restricted Payment:
(A) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(B) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the most recently ended four fiscal quarters for
which financial statements are available, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in Section 4.09(a) hereof; and
(C) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Subsidiaries after
the date hereof (excluding Restricted Payments permitted by clauses (ii) and
(iii) of Section 4.07(b) hereof), is less than the sum of (1) 50% of the
Consolidated Net Income of the Company for the period (taken as one accounting
period) from the beginning of the first fiscal quarter commencing after the
date hereof to the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of such
<PAGE>
<PAGE>
Restricted Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus (2) 100% of the aggregate net cash
proceeds received by the Company from the issuance or sale since the date
hereof of Equity Interests of the Company or of debt securities of the Company
that have been converted into such Equity Interests (other than Equity
Interests (or convertible debt securities) sold to a Subsidiary of the Company
and other than Disqualified Stock or debt securities that have been converted
into Disqualified Stock or Equity Interests issued upon conversion of the
Company's Series B Convertible Preferred Stock or Series C Convertible
Preferred Stock outstanding on the date hereof), plus (3) to the extent that
any Restricted Investment that was made after the date hereof is sold for cash
or otherwise liquidated or repaid for cash, the lesser of (x) the cash return
of capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (y) the initial amount of such Restricted Investment.
(b) The foregoing provisions shall not prohibit (i) the payment of
any dividend or distribution within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions hereof; (ii) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company in exchange for, or out of
the proceeds of, the substantially concurrent sale (other than to a Subsidiary
of the Company) of other Equity Interests of the Company (other than any
Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (C)(2) of Section 4.07(a) hereof;
and (iii) the defeasance, redemption or repurchase of Subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness or the substantially concurrent sale (other than
to a Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (C)(2) of Section 4.07(a) hereof.
(c) The amount of all Restricted Payments (other than cash) shall
be the fair market value (evidenced by a resolution of the Board of Directors
set forth in an Officers' Certificate delivered to the Trustee) on the date of
the Restricted Payment of the asset(s) proposed to be transferred by the
Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment is permitted and setting forth the basis upon which
the calculations required by Section 4.07(a) hereof were computed, which
calculations may be based upon the Company's latest available financial
statements.
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any
<PAGE>
<PAGE>
Subsidiary to (a)(i) pay dividends or make any other distributions to the
Company or any of its Subsidiaries (A) on their Capital Interests or (B) with
respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any Indebtedness owed to the Company or any of its
Subsidiaries, (b) make loans or advances to the Company or any of its
Subsidiaries or (c) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) Existing Indebtedness as in effect on the date
hereof, including, without limitation, the Series B Senior Notes and the
indenture, dated as of May 13, 1997, related thereto, (ii) any Credit
Facility, provided that any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereto are
no more restrictive with respect to such dividend and other payment
restrictions than those contained in the Revolving Credit Facility as in
effect on the date hereof, (iii) the Indenture and the Senior Notes, (iv)
applicable law, (v) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with
past practices, (vi) Capital Lease Obligations, mortgage financings or
purchase money obligations for property acquired in the ordinary course of
business or mortgage financings secured by the Miami Lakes Facility that
impose restrictions of the nature described in clause (c) above on the
property so acquired or the Miami Lakes Facility, as the case may be, (vii)
existing with respect to any Person or the property or assets of such Person
acquired by the Company or any of its Subsidiaries, at the time of such
acquisition and not incurred in contemplation thereof, which encumbrances or
restrictions are not applicable to any Person or the property or assets of any
Person other than such Person or the property or assets of such Person so
acquired, or (viii) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced.
Section 4.09. Incurrence of Indebtedness and Issuance of
Disqualified Stock
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "INCUR") any Indebtedness (including
Acquired Debt) and the Company shall not issue any Disqualified Stock;
PROVIDED that the Company may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock and any Subsidiary may incur Indebtedness (including
Acquired Debt), if (i) in each case, the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which
such additional Indebtedness is incurred or such Disqualified Stock is issued
would have been at least (a) 2.00 to 1, on or prior to May 15, 1999, and (b)
2.25 to 1, thereafter, in each case, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock had been
<PAGE>
<PAGE>
issued, as the case may be, at the beginning of such four-quarter period and
(ii) in the case of incurrence of Indebtedness by a Subsidiary (other than
Acquired Debt), such Subsidiary guarantees, subject to Section 4.15 hereof, if
applicable, on a senior unsecured basis (a "SUBSIDIARY GUARANTEE") the
Company's payment obligations under the Senior Notes. Notwithstanding the
foregoing, any such Subsidiary Guarantee by a Subsidiary Guarantor of the
Senior Notes shall be subject to release as provided in Section 10.03 hereof.
(b) The foregoing provisions shall not apply to:
(i) the incurrence by the Company and any Subsidiary Guarantor
of Senior Revolving Debt and letters of credit pursuant to any Credit Facility
for working capital purposes (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company
thereunder) in an aggregate principal amount not to exceed the amount of the
Borrowing Base;
(ii) the incurrence by the Company of the Existing
Indebtedness;
(iii) the incurrence by the Company of the Indebtedness
represented by the Senior Notes and the incurrence by any Subsidiary Guarantor
of the Indebtedness represented by its Subsidiary Guarantee;
(iv) the incurrence by the Company and any Subsidiary
Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund, Indebtedness that was permitted hereby to be incurred;
(v) the incurrence by the Company or any Subsidiary of
intercompany Indebtedness between or among the Company and any of its
Subsidiaries; provided that (A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person other
than a Wholly Owned Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Wholly Owned
Subsidiary shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Subsidiary, as the case may be;
(vi) the incurrence by the Company and any Subsidiary
Guarantor of Indebtedness (A) represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred for
the purpose of financing up to all or any part of the purchase price or cost
of construction or improvement of property used in the business of the Company
or such Subsidiary Guarantor, or (B) represented by mortgage financing
secured solely by the Miami Lakes Facility (in addition to Indebtedness
permitted to be incurred pursuant to clauses (ii) or (iv) of this Section
4.09(b)) in a principal amount for (A) and (B) of this clause (vi) in the
aggregate not to exceed $7.5 million at any time outstanding;
(vii) the incurrence by the Company and any Subsidiary
Guarantor of Hedging Obligations in the ordinary course of business of the
Company or such Subsidiary Guarantor, as the case may be;
<PAGE>
<PAGE>
(viii) the incurrence by the Company and any Subsidiary
Guarantor of statutory obligations, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; and
(ix) the incurrence by the Company and any Subsidiary
Guarantor of Indebtedness not otherwise permitted hereunder in an aggregate
amount for all such Indebtedness not to exceed $7.5 million at any time
outstanding.
(c) The Company shall not incur any secured Indebtedness which is
not Senior Indebtedness.
(d) No Subsidiary Guarantor shall incur any secured Indebtedness
which is not Guarantor Senior Indebtedness.
Section 4.10. Asset Sales
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, engage in an Asset Sale, unless (a) the Company (or the
Subsidiary, as the case may be) receives consideration at the time of such
Asset Sale at least equal to the fair market value (evidenced by a resolution
of the Board of Directors set forth in an Officers' Certificate delivered to
the Trustee) of the assets or Equity Interests issued or sold or otherwise
disposed of and (b) at least 75% of the consideration therefor received by the
Company or such Subsidiary is in the form of cash or Cash Equivalents;
provided that the amount of (i) any liabilities (as shown on the Company's or
such Subsidiary's most recent balance sheet or in the notes thereto) of the
Company or any Subsidiary (other than liabilities that are by their terms
subordinated to the Senior Notes or any guarantee thereof) that are assumed by
the transferee of any such assets and (ii) any securities, notes or other
obligations received by the Company or any such Subsidiary from such
transferee that are promptly converted by the Company or such Subsidiary into
cash (to the extent of the cash received), shall be deemed to be cash for
purposes of this provision.
(b) Within 180 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds (a) to permanently reduce
Senior Indebtedness, (b) to permanently reduce Indebtedness permitted to be
incurred pursuant to Section 4.09(b)(i) hereof or (c) to an Investment in
another business, the making of a capital expenditure or the acquisition of
other tangible assets, in each case, in the same or a similar or related line
of business as the Company and its Subsidiaries were engaged in on the date
hereof. Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the first sentence of this paragraph shall be deemed to constitute
"EXCESS PROCEEDS." Within 30 days after the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company shall be required to make an offer
to all holders of Senior Notes (an "ASSET SALE OFFER") to purchase the maximum
principal amount of Senior Notes that may be purchased out of the Excess
Proceeds (the "OFFER AMOUNT"), at an offer price in cash in an amount equal to
100% of the principal amount thereof, plus accrued and unpaid interest, if
<PAGE>
<PAGE>
any, thereon to the date of purchase (the "ASSET SALE OFFER PRICE"), in
accordance with the procedures set forth herein; provided that, if by reason
of Section 4.10(b) of the indenture, dated as of May 13, 1997, relating to the
Series B Senior Notes, the Company is required to make an Asset Sale Offer (as
defined therein) to the holders of the Series B Senior Notes, the Excess
Proceeds may first be applied to the purchase of the Series B Senior Notes
and, to the extent so applied, the Excess Proceeds available for the purchase
of Senior Notes shall be correspondingly reduced. To the extent that the
aggregate amount of Senior Notes tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds available for the purchase of Senior Notes, the
Company and its Subsidiaries may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Senior Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds available
for the purchase of Senior Notes, the Trustee shall select the Senior Notes to
be purchased on a pro rata basis. Upon completion of such offer to purchase,
the amount of Excess Proceeds shall be reset at zero.
Section 4.11. Transactions with Affiliates
The Company shall not, and shall not permit any of its Subsidiaries
to, sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make any
contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "AFFILIATE
TRANSACTION"), unless (a) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person and (b) the Company delivers to the
Trustee (i) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $1.0 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors and (ii) with respect to any Affiliate Transaction involving
aggregate consideration in excess of $5.0 million, an opinion as to the
fairness to the Company or such Subsidiary of such Affiliate Transaction from
a financial point of view issued by a nationally-recognized investment banking
firm; provided that (A) any reasonable employment, compensation, bonus or
benefit arrangement entered into by the Company or any of its Subsidiaries in
the ordinary course of business of the Company or such Subsidiary, including
without limitation, (x) the grant of stock options, stock appreciation rights
or other stock-based incentive awards (other than Disqualified Stock) in the
ordinary course of business, provided that any non-stock payments by the
Company or any Subsidiary in connection with the grant or exercise or other
settlement of such stock options, stock appreciation rights or other
stock-based incentive awards are permitted under the provisions of Section
4.07 hereof and (y) the payment of bonuses to officers of the Company from the
6% Bonus Pool and any renewals, extensions or amendments thereof, provided
that amounts paid thereunder with respect to any Fiscal Year shall not exceed
in the aggregate 6% of the Company's pre-tax profits for such Fiscal Year
as determined pursuant to the terms of the 6% Bonus Pool as in effect on the
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date hereof, (B) transactions between or among the Company and/or its
Subsidiaries, (C) the payment of reasonable fees, expense reimbursement and
customary indemnification, advances and other similar arrangements to
directors and officers of the Company, (D) reasonable loans or advances to
employees of the Company and its Subsidiaries in the ordinary course of
business, (E) transactions permitted by Section 4.07 hereof, (F) scheduled
payments of principal and interest with respect to Existing Indebtedness and
(G) scheduled payments pursuant to the lease of the National Trading Facility
as in effect on the date hereof, in each case, shall not be deemed to be
Affiliate Transactions.
Section 4.12. Liens
The Company shall not, and shall not permit any of its Subsidiaries
to, create, incur, assume or otherwise cause or suffer to exist or become
effective any Lien of any kind (other than Permitted Liens) upon any of their
property or assets, now owned or hereafter acquired, unless all payments due
under this Indenture and the Senior Notes and the Subsidiary Guarantees, if
any, are secured on an equal and ratable basis with the obligations so secured
until such time as such obligations are no longer secured by a Lien.
Section 4.13. Sale and Leaseback Transactions
The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any sale and leaseback transaction; PROVIDED that the Company
and any Subsidiary Guarantor may enter into a sale and leaseback transaction
if (a) the Company or such Subsidiary Guarantor could have (i) incurred
Indebtedness in an amount equal to the Attributable Debt relating to such sale
and leaseback transaction pursuant to Section 4.09 hereof and (ii) incurred a
Lien to secure such Indebtedness pursuant to Section 4.12 hereof, (b) the
gross cash proceeds of such sale and leaseback transaction are at least equal
to the fair market value (as determined in good faith by the Board of
Directors and set forth in an Officers' Certificate delivered to the Trustee)
of the property that is the subject of such sale and leaseback transaction and
(c) the transfer of assets in such sale and leaseback transaction is permitted
by, and the Company or such Subsidiary Guarantor applies the proceeds of such
transaction in compliance with, Section 4.10 hereof.
Section 4.14. Limitation on Issuances and Sales of Capital
Interests of Wholly Owned Subsidiaries
The Company (a) shall not, and shall not permit any Wholly Owned
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise
dispose of (including by way of merger, consolidation or similar transaction)
any Capital Interests of any Wholly Owned Subsidiary of the Company to any
Person (other than the Company or a Wholly Owned Subsidiary of the Company),
unless (i) such transfer, conveyance, sale, lease or other disposition is of
all the Capital Interests of such Wholly Owned Subsidiary and (ii) the cash
Net Proceeds from such transfer, conveyance, sale, lease or other disposition
are applied in accordance with Section 4.10 hereof, and (b) shall not permit
any Wholly Owned Subsidiary of the Company to issue any of its Equity
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Interests (other than, if necessary, Capital Interests constituting directors'
qualifying shares or interests) to any Person other than to the Company or a
Wholly Owned Subsidiary of the Company, except to the extent that (x) in
the case of clause (a) above such transfer, conveyance, sale, lease or other
disposition of any such Capital Interests is by a Wholly Owned Subsidiary to a
Subsidiary of the Company and does not constitute an Asset Sale by reason of
clause (a) of the last sentence of the definition of Asset Sale and (y) in the
case of clause (b) above any such issuance of Equity Interests is to a
Subsidiary of the Company and does not constitute an Asset Sale by reason of
clause (b) of the last sentence of the definition of Asset Sale.
Section 4.15. Limitations on Issuances of Guarantees of
Indebtedness
The Company shall not permit any Subsidiary, directly or indirectly,
to guarantee or secure the payment of any Indebtedness other than the Senior
Notes, unless such Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for the Guarantee of the
payment of the Senior Notes by such Subsidiary, which Guarantee shall be
senior to or PARI PASSU with such Subsidiary's Guarantee of, or pledge to
secure, such other Indebtedness. Notwithstanding the foregoing, any such
Guarantee by a Subsidiary of the Senior Notes shall provide by its terms that
it shall be automatically and unconditionally released and discharged upon
either (a) the release or discharge of such Guarantee of such Indebtedness,
except a discharge by or as a result of payment under such Guarantee, or (b)
any sale, exchange or transfer, to any Person not an Affiliate of the Company,
of all of the Company's Capital Interests in, or all or substantially all
the assets of, such Subsidiary, which sale, exchange or transfer is made in
compliance with the applicable provisions hereof. The form of such Guarantee
is attached as Exhibit C hereto.
Section 4.16. Subsidiary Guarantees
If any Subsidiary of the Company shall, after the date hereof, incur
Indebtedness in circumstances under which, pursuant to Section 4.09 hereof,
the incurrence of such Indebtedness requires that such Subsidiary execute a
Subsidiary Guarantee or that it be a Subsidiary Guarantor, then such
Subsidiary, subject to Section 4.09 (b)(v), shall execute and deliver to the
Trustee a Subsidiary Guarantee in the form attached hereto as Exhibit C and a
supplemental indenture in the form attached hereto as Exhibit D and deliver an
Opinion of Counsel, in accordance with the terms hereof.
Section 4.17. Business Activities
The Company shall not, and shall not permit any Significant
Subsidiary to, engage in any business, other than such business activities as
the Company and its Subsidiaries are engaged in on the date hereof and such
business activities similar or reasonably related thereto.
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Section 4.18. Offer to Repurchase Upon Change of Control
(a) Upon the occurrence of a Change of Control, each Holder of
Senior Notes shall have the right to require the Company to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Senior Notes pursuant to the offer described below (the "CHANGE OF CONTROL
OFFER") at an offer price in cash equal to 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest, if any, thereon to the date
of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 60 days following any
Change of Control, the Company shall mail a notice to each Holder, with a copy
to the Trustee, describing the transaction or transactions that constitute the
Change of Control and offering to repurchase Senior Notes pursuant to the
procedures required hereby and described in such notice. The Company shall
comply with the requirements of Rule 14e-1 under the 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 the Senior
Notes as a result of a Change of Control.
(b) On the payment date set forth in the Change of Control Offer
(the "CHANGE OF CONTROL PAYMENT DATE"), the Company shall, to the extent
lawful, (i) accept for payment all Senior Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all
Senior Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Senior Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Senior Notes
or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Senior Notes so tendered the Change of Control
Payment for such Senior Notes, and the Trustee shall promptly authenticate and
mail (or cause to be transferred by book entry) to each Holder a new Senior
Note equal in principal amount to any unpurchased portion of the Senior Notes
surrendered, if any; provided that each such new Senior Note shall be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
Section 4.19. Corporate Existence
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate or other existence of any of its
Subsidiaries, in accordance with the respective organizational documents (as
the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) their rights (charter and statutory), licenses and
franchises; provided that the Company shall not be required to preserve any
such right, license or franchise, or the corporate or other existence of any
Subsidiary, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof
is not adverse in any material respect to the Holders of the Senior Notes.
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Section 4.20. Payments for Consent
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Senior Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Senior Notes, unless such consideration is
offered to be paid or agreed to be paid to all Holders of the Senior Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
Section 4.21. Limitation on Preferred Stock or Preferred Equity
Interests of Subsidiaries.
The Company will not permit any of its Subsidiaries to issue or sell
any preferred stock or preferred Equity Interests (other than to the Company
or to a Wholly Owned Subsidiary of the Company) or permit any Person (other
than the Company or a Wholly-Owned Subsidiary of the Company) to own any
preferred stock or preferred Equity Interests of any Subsidiary.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets
(a) The Company may not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets
in one or more related transactions to, another corporation, Person or entity,
unless (i) the Company is the surviving Person or the entity or the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is organized and existing under the
laws of the United States, any state thereof or the District of Columbia; (ii)
the entity or Person formed by or surviving any such consolidation or
merger (if other than the Company) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Senior Notes and
this Indenture pursuant to a supplemental indenture reasonably satisfactory to
the Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; and (iv) the Company or the entity or Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made (A)
shall have Consolidated Net Worth immediately after the transaction equal to
or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) except in the case of a transaction the
principal purpose and effect of which is to change the Company's state of
incorporation, shall, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of
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the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09(a) hereof.
(b) The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed
transaction and such supplemental indenture comply with this Indenture.
The Trustee shall be entitled to conclusively rely upon such Officers'
Certificate and Opinion of Counsel.
Section 5.02. Successor Corporation Substituted
Upon any consolidation or merger, or any sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged
or to which such sale, lease, conveyance 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 Senior Notes with the same effect as
if such successor Person has been named as the Company herein.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default
Each of the following constitutes an "EVENT OF DEFAULT":
(a) default by the Company for 30 days in the payment when due of
interest on the Senior Notes;
(b) default by the Company in the payment of all or any part of the
principal, or premium, if any, on the Senior Notes when and as the same
becomes due and payable at maturity, upon redemption, by acceleration, or
otherwise, including, without limitation, the payment of the Change of Control
Payment or the Asset Sale Offer Price, or otherwise;
(c) failure by the Company or any of its Subsidiaries to
observe or perform in all material respects the covenants contained in
Sections 4.07, 4.09, 4.12 and 5.01 hereof;
(d) failure by the Company or any of its Subsidiaries to observe or
perform in all material respects any other covenant or agreement on the part
of the Company or such Subsidiary contained in the Senior Notes or this
Indenture and the continuance of such failure for a period of 30 days after
written notice is given to the Company by the Trustee or to the Company and
the Trustee by the holders of at least 25% in aggregate principal amount
of the Senior Notes then outstanding, specifying such default, requiring that
it be remedied and stating that such notice is a "Notice of Default";
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(e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness by the Company or any of its Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date hereof,
which default (A) is caused by a failure to pay principal of or premium, if
any, or interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a "PAYMENT
DEFAULT") or (B) results in the acceleration of such Indebtedness prior to its
express maturity and, in each of (A) or (B), the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $3.0 million or more;
(f) failure by the Company or any of its Subsidiaries to pay one or
more final non-appealable judgments aggregating in excess of $3.0 million
entered by courts of competent jurisdiction which judgments are not paid,
discharged or stayed within 60 consecutive days after their entry;
(g) except as permitted hereby, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Subsidiary Guarantor, or
any Person acting on behalf of any Subsidiary Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee;
(h) the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken together, would constitute a Significant
Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
(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; and
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary of the Company in an involuntary case;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary of the Company or for all or substantially all of the property of
the Company or any Significant Subsidiary of the Company; or
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(iii) orders the liquidation of the Company or any Significant
Subsidiary of the Company, and the order or decree remains unstayed and in
effect for 60 consecutive days.
The term "BANKRUPTCY LAW" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Section 6.02. Acceleration
(a) If an Event of Default (other than an Event of Default
specified in clause (h) or (i) of Section 6.01 relating to the Company, any
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of not less than 25% in
aggregate principal amount of the then outstanding Senior Notes by written
notice to the Company and the Trustee, may declare the unpaid principal of,
premium, if any, and any accrued and unpaid interest on all the Senior Notes
to be due and payable. Upon such declaration the principal, premium, if any,
and interest shall be due and payable immediately. If an Event of Default
specified in clause (h) or (i) of Section 6.01 occurs relating to the Company,
any Significant Subsidiary or any group of Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary, such an amount
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. The
Holders of a majority in aggregate principal amount of the then outstanding
Senior Notes, by written notice to the Trustee, may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal, interest or premium that has become
due solely because of the acceleration) have been cured or waived.
(b) In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Senior
Notes pursuant to Section 3.07 hereof, an equivalent premium shall also become
and be immediately due and payable to the extent permitted by law upon
acceleration of the Senior Notes. If an Event of Default occurs prior to May
15, 2002 by reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Senior Notes prior to May 15, 2002 pursuant to Section 3.07,
then the amount payable for purposes of this paragraph for the period from
the date hereof through and including May 14, 1998 shall be 110.375% and the
amount payable for purposes of this paragraph for each of the years beginning
on May 15 of the years set forth below shall be as set forth in the following
table, in each case, expressed as a percentage of the amount that would
otherwise be due but for the provisions of this paragraph, plus accrued
interest, if any, to the date of payment:
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<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1998. . . . . . . . . . . . . 109.338%
1999. . . . . . . . . . . . . 108.300%
2000. . . . . . . . . . . . . 107.263%
2001. . . . . . . . . . . . . 106.225%
</TABLE>
Section 6.03. Other Remedies
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Senior Notes or to enforce the performance of any
provision of the Senior Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Senior Note 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. All remedies are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults
Holders of not less than a majority in aggregate principal amount of
the then outstanding Senior Notes by notice to the Trustee may on behalf of
the Holders of all of the Senior Notes waive an existing Default or Event of
Default and its consequences, except a continuing Default or Event of Default
in the payment of the principal of, premium, if any, or interest on, the
Senior Notes and except as to payments required under Sections 4.10 and 4.18
hereof. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 6.05. Control by Majority
Subject to Section 7.01(e) hereof, Holders of a majority in
principal amount of the then outstanding Senior Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it.
However, the Trustee may refuse to follow any direction that conflicts with
the law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Senior Notes or that may involve
the Trustee in personal liability.
Section 6.06. Limitation on Suits
A Holder of a Senior Note may pursue a remedy with respect to this
Indenture or the Senior Notes only if:
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(a) the Holder of a Senior Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Senior Note or Holders of Senior Notes offer
and, if requested, provide to the Trustee 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, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Senior Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Senior Note may not use this Indenture to prejudice
the rights of another Holder of a Senior Note or to obtain a preference or
priority over another Holder of a Senior Note.
Section 6.07. Rights of Holders of Senior Notes to Receive
Payment
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Senior Note to receive payment of principal, premium, if any,
and interest on the Senior Note, on or after the respective due dates
expressed in the Senior Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder of the Senior Note.
Section 6.08. Collection Suit by Trustee
If an Event of Default specified in Section 6.01(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, and interest remaining unpaid on the
Senior Notes and interest on overdue principal and, to the extent lawful,
interest 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 Claim
The Trustee is authorized to 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 of the Senior Notes allowed in any judicial
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proceedings relative to the Company (or any other obligor upon the Senior
Notes), its creditors or its property and shall be entitled and empowered to
participate as a member, voting or otherwise, of any official committee
of creditors appointed in such matter and to collect, receive and distribute
any money or other property payable or deliverable on any such claims, and any
custodian in any such judicial proceeding is hereby authorized by each Holder
of a Senior Note to make such payments to the Trustee, and in the event that
the Trustee shall consent to the making of such payments directly to the
Holders of the Senior Notes, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.07 hereof out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders of the Senior Notes may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to restrict the right of
any Holder of a Senior Note to vote on any plan of reorganization,
arrangement, adjustment or composition affecting the Senior Notes or the
rights of any Holder of a Senior Note thereunder, or to authorize the Trustee
to vote in respect of the claim of any Holder of a Senior Note in any such
proceeding.
Section 6.10. Priorities
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 7.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
SECOND: to Holders of Senior Notes for amounts due and unpaid on the
Senior Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable
on the Senior Notes for principal, premium, if any and interest, respectively;
and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Senior Notes.
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
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by it as a Trustee, a court in its discretion may 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 does not apply to a suit by the Trustee, a suit
by a Holder of a Senior Note pursuant to Section 6.07, or a suit by Holders of
more than 10% in principal amount of the then outstanding Senior Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture or the TIA and the Trustee need
perform only those duties that are specifically set forth in this Indenture or
the TIA and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee, and
(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. However, the
Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture, but shall not be
obligated to verify the contents thereof.
(c) none of the provisions of this Indenture shall be construed to
relieve the Trustee from liabilities 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 Responsible 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 hereof.
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(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request or direction of any Holder of Senior Notes, unless
such Holder shall have offered to the Trustee reasonable compensation and
indemnity satisfactory to it (including, in the Trustee's discretion, payment
in cash) against any loss, liability or expense, including reasonable
attorneys' fees that might be incurred by it in compliance with such request
or direction.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. Rights of Trustee
(a) The Trustee may conclusively rely upon 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.
The Trustee shall receive and retain financial reports and statements of the
Company as provided herein, but it shall have no duty to review or analyze
such statements to determine compliance with covenants or other obligations
of the Company.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection
from liability in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(f) The Trustee shall be under no obligation to exercise any of its
rights and powers under this Indenture at the request or direction of any
Holder of Senior Notes unless such Holder shall have offered to the Trustee
reasonable compensation and indemnity satisfactory to it (including, in the
Trustee's discretion, payment in cash) against any loss, liability or expense,
including reasonable attorneys' fees that might be incurred by it in
compliance with such request or direction.
(g) The Trustee shall not be bound to ascertain or inquire as to
the performance or observance of any covenants, conditions or agreements on
the part of the Company, except as set forth herein; but the Trustee may
require of the Company full information and advice as to the performance of
the aforesaid covenants, conditions and agreements.
Section 7.03. Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Notes and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must (i) eliminate such conflict within 90 days, (ii) apply to the
Commission for permission to continue as trustee or (iii) resign. Any Agent
may do the same with like rights and duties. The Trustee is also subject to
Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Senior Notes, it shall
not be accountable for the Company's use of the proceeds from the Senior Notes
or any money paid to the Company or upon the Company's direction under any
provision of this Indenture, 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 or recital herein or any
statement in the Senior Notes or any other document in connection with the
sale of the Senior Notes or pursuant to this Indenture other than its
certificate of authentication.
Section 7.05. Notice of Defaults
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Senior Notes a
notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of principal
of, premium, if any, or interest on any Senior Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the
Holders of the Senior Notes. The Trustee shall not be required to take notice
or be deemed to have notice of any Default hereunder except failure by the
Company to cause to be made any of the payments to the Trustee required to be
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made, or an Event of Default of which the Trustee has actual knowledge, unless
the Trustee shall have been specifically notified in writing of such Default
by the Company or the Holders of at least 25% in aggregate principal amount of
the then outstanding Senior Notes. All notices or other instruments required
by this Indenture to be delivered to the Trustee must, in order to be
effective, be delivered to the Corporate Trust Office of the Trustee, and, in
the absence of such notice so delivered, the Trustee may conclusively assume
that no Default exists.
Section 7.06. Reports by Trustee to Holders of the Senior Notes
Within 60 days after each April 15 beginning with the April 15
following the date of this Indenture and for so long as Senior Notes remain
outstanding, the Trustee shall mail to the Holders of the Senior Notes a brief
report dated as of such reporting date that complies with TIA ss.ss. 313(a)
(but if no event described in TIA ss.ss. 313(a) has occurred within the twelve
months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA ss.ss. 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA ss.ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Senior Notes shall be mailed to the Company and filed with the Commission and
each stock exchange on which the Senior Notes are listed. The Company shall
promptly notify the Trustee when the Senior Notes are listed on any stock
exchange.
Section 7.07. Compensation and Indemnity
The Company shall pay to the Trustee from time to time upon written
request reasonable compensation for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and actual out-of-pocket expenses incurred or made by it in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents
and counsel, but shall not include expenses incurred as a result of
the Trustee's negligence or willful misconduct.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses, including reasonable attorneys' fees, incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture without negligence or bad faith on its part. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder, except to the extent of actual
prejudice to the Company resulting from such failure. 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 consent, which consent shall not be unreasonably withheld.
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The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations under this Section 7.07,
the Trustee shall have a Lien prior to the Senior Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Senior Notes. Such Lien shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
Section 7.08. Replacement of Trustee
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of
Senior Notes of a majority in principal amount of the then outstanding Senior
Notes may remove the Trustee by so notifying the Trustee and the Company in
writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(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 Custodian or 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 promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Senior
Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
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 then outstanding Senior
Notes may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
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If the Trustee after written request by any Holder of a Senior Note
who has been a Holder of a Senior Note for at least six months fails to comply
with Section 7.10, such Holder of a Senior Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, 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. The successor Trustee shall mail a notice of
its succession to Holders of the Senior Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the Lien provided for in Section 7.07 hereof, provided all sums
owing to the retiring Trustee hereunder have been paid. Notwithstanding
replacement of the retiring Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 hereof shall continue for the benefit
of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation or association, the successor corporation or association without
any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America or of any state thereof authorized under such laws to exercise
corporate trustee power, shall be subject to supervision or examination by
federal or state authority and shall have a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.ss. 310(a)(1), (2) and (5). The Trustee is subject to
TIA ss.ss. 310(b).
Section 7.11. Preferential Collection of Claims Against Company
The Trustee is subject to TIA ss.ss. 311(a), excluding any creditor
relationship listed in TIA ss.ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss.ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance
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The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, with
respect to the Senior Notes, elect to have either Section 8.02 or 8.03 be
applied to all outstanding Senior Notes upon compliance with the conditions
set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.02, the Company shall be deemed to have been
discharged from its obligations with respect to all outstanding Senior Notes
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 Senior Notes, which shall thereafter be deemed
to be "outstanding" only for the purposes of Section 8.05 and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all their other obligations under such Senior Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Senior Notes to receive
solely from the trust fund described in Section 8.04, and as more fully set
forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Senior Notes when such payments are due, (b) the
Company's obligations with respect to such Senior Notes under Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.10 and 4.02, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations
in connection therewith and (d) this Article 8. Subject to compliance with
this Article 8, the Company may exercise its option under this Section 8.02,
notwithstanding the prior exercise of its option under Section 8.03 with
respect to the Senior Notes.
Section 8.03. Covenant Defeasance
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.03, the Company shall be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and Article 5
with respect to the outstanding Senior Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "COVENANT DEFEASANCE"),
and the Senior Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed "outstanding" for all other purposes hereunder (it
being understood that such Senior Notes shall not be deemed outstanding for
accounting purposes). For this purpose, such Covenant Defeasance means that,
with respect to the outstanding Senior Notes, the Company may omit to comply
with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
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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, but, except as specified above, the
remainder of this Indenture and such Senior Notes shall be unaffected thereby.
In addition, upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.03, Sections 6.01(e) and (f) shall not constitute
Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance
The following shall be the conditions to application of either
Section 8.02 or Section 8.03 to the outstanding Senior Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 7.10 who shall agree to comply with the provisions of this Article 8
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 Senior Notes, (i) cash in U.S. Dollars
in an amount, (ii) non-callable Government Securities which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms shall provide, not later than one day before the due date of
any payment, cash in U.S. Dollars in an amount, or (iii) a combination
thereof, in such amounts, as will be 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 (A) the principal of, premium, if any, and interest on the
outstanding Senior Notes on the stated maturity or on the applicable
redemption date, as the case may be, of such principal or installment of
principal, premium, if any, or interest and (B) any mandatory sinking fund
payments or analogous payments applicable to the outstanding Senior Notes on
the day on which such payments are due and payable in accordance with the
terms of this Indenture and of such Senior Notes; provided that the Trustee
shall have been irrevocably instructed to apply such money or the proceeds of
such non-callable Government Securities to said payments with respect to the
Senior Notes;
(b) In the case of an election under Section 8.02, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date hereof, there has been a change in the
applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Senior 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;
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(c) In the case of an election under Section 8.03, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee to the effect that the Holders of the
outstanding Senior 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 in the same amount, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had not
occurred;
(d) No Default or Event of Default with respect to the Senior Notes
shall have occurred and be continuing on the date of such deposit (other than
a Default or Event of Default resulting from the borrowing of funds to be
applied to such deposit) or, insofar as Section 6.01(h) or (i) is concerned,
at any time in 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);
(e) Such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any other material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) In the case of an election under either Section 8.02 or 8.03,
the Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that after the 91st day following the deposit, assuming that no Holder
of a Senior Note is an "insider" as defined in Section 101(31) of the U.S.
Bankruptcy Code and assuming that prior to such 91st day no voluntary or
involuntary bankruptcy case has been commenced with respect to the Company,
such deposit will not constitute a preference as defined in Section 547 of the
U.S. Bankruptcy Code, and, assuming such a bankruptcy case is commenced on or
after such 91st day, the trust funds will not constitute property included
within the estate of the debtor;
(g) In the case of an election under either Section 8.02 or 8.03,
the Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 8.02 or 8.03 was not made by the Company with the intent of preferring
the Holders over other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating that
all conditions precedent provided for relating to either the Legal Defeasance
under Section 8.02 or the Covenant Defeasance under Section 8.03 (as the case
may be) have been complied with as contemplated by this Section 8.04.
Section 8.05. Deposited Money and Government Securities to
be Held in Trust; Other Miscellaneous Provisions
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Subject to Section 8.06, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 in respect of the outstanding Senior Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Senior Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company or a Subsidiary
Guarantor, if any, acting as Paying Agent) as the Trustee may determine, to
the Holders of such Senior Notes 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 cash or non-callable
Government Securities deposited pursuant to Section 8.04 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Senior Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
Company's request any money or non-callable Government Securities held by it
as provided in Section 8.04 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a)), 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 8.06. Repayment to Company
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company in trust for the payment of the principal of, premium, if
any, or interest on any Senior Note and remaining unclaimed for two years
after such principal, and premium, if any, or interest has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Senior
Note shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining shall be repaid to the Company.
Section 8.07. Reinstatement
If the Trustee or Paying Agent is unable to apply any U.S. Dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03,
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as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Senior Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03, as the case may be; provided that, if the Company makes any
payment of principal of, premium, if any, or interest on any Senior Note
following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Senior Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture, the Senior Notes or any
Subsidiary Guarantee without the consent of any Holder of a Senior Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes;
(c) to provide for the assumption of the Company's or any
Subsidiary Guarantor's obligations to the Holders of the Senior Notes in the
case of a merger, consolidation or other similar business combination pursuant
to Article 5 or Section 10.04 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes or that does not materially
adversely affect the legal rights hereunder of any Holder of the Senior Notes;
(e) to provide for Subsidiary Guarantees of the Senior Notes; or
(f) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by resolutions of the
Board of Directors of the Company authorizing the execution of any such
amended or supplemental indenture and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental indenture authorized
or permitted by the terms of this Indenture and make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to enter into such amended or supplemental indenture
which affects its own rights, duties or immunities under this Indenture or
otherwise.
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Section 9.02. With Consent of Holders of Senior Notes
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture or the Senior Notes or any
amended or supplemental indenture with the written consent of the Holders of
at least a majority in aggregate principal amount of the Senior Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Senior Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default and its consequences (other
than a Default or Event of Default in the payment of the principal of,
premium, if any, or interest on the Senior Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Senior Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding
Senior Notes (including consents obtained in connection with a tender offer or
exchange offer for the Senior Notes).
Upon the request of the Company accompanied by resolutions of the
Board of Directors of the Company authorizing the execution of any such
amended or supplemental indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Senior
Notes as aforesaid, and upon receipt by the Trustee of the documents described
in Section 9.06 hereof, the Trustee shall join with the Company in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental indenture.
It shall not be necessary for the consent of the Holders of Senior
Notes under this Section 9.02 to approve the particular form of any proposed
amendment 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 Senior Notes
affected thereby 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
such amended or supplemental indenture or waiver. Subject to Sections 6.04
and 6.07 hereof, the Holders of a majority in aggregate principal amount of
the Senior Notes then outstanding may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Senior
Notes. However, without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Senior Notes held by a non-consenting
Holder of Senior Notes):
(a) reduce the principal amount of Senior Notes whose Holders must
consent to an amendment, supplement or waiver;
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(b) reduce the principal of or change the fixed maturity of any
Senior Note or alter the provisions with respect to the redemption of the
Senior Notes;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Senior Note;
(d) waive a Default or Event of Default in the payment of principal
of, premium, if any, or interest on the Senior Notes, including, without
limitation, payment of the Change of Control Payment or the Asset Sale Offer
Price (except a rescission of acceleration of the Senior Notes by the Holders
of at least a majority in aggregate principal amount of the then outstanding
Senior Notes and a waiver of the payment default that resulted from such
acceleration);
(e) make any Senior Note payable in money other than that stated in
the Senior Notes;
(f) make any change in Section 6.04 or 6.07 hereof or in the
provisions of this Indenture relating to the rights of Holders of Senior Notes
to receive payments of principal of, premium, if any, or interest on the
Senior Notes;
(g) waive a redemption payment with respect to any Senior Note; or
(h) make any change in this sentence of this Section 9.02.
Section 9.03. Compliance with Trust Indenture Act
Every amendment or supplement to this Indenture or the Senior Notes
shall be set forth in an amended or supplemental indenture that complies 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 of a Senior Note is a continuing consent by the
Holder of a Senior Note and every subsequent Holder of a Senior Note or
portion of a Senior Note that evidences the same debt as the consenting
Holder's Senior Note, even if notation of the consent is not made on any
Senior Note. However, any such Holder of a Senior Note or subsequent Holder
of a Senior Note may revoke the consent as to its Senior Note if the Trustee
receives written notice of revocation before the date the waiver, supplement
or amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder of a
Senior Note.
Section 9.05. Notation on or Exchange of Senior Notes
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Note thereafter authenticated. The Company
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in exchange for all Senior Notes may issue and the Trustee shall authenticate
new Senior Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. Trustee to Sign Amendments, etc.
Subject to the receipt of an Officers' Certificate and an Opinion of
Counsel as set forth in this Section 9.06, and upon the filing with the
Trustee of evidence of consent of the Holders as provided in Section 9.02
hereof, the Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental indenture until the
Board of Directors of the Company approves it, and no Subsidiary Guarantor may
sign such an amendment or supplemental indenture until its board of directors
approves it. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that such amendment or supplement is authorized or permitted by this
Indenture, that all conditions precedent to the execution of the amendment or
supplement by the parties thereto have been complied with and that the
amendment or supplement is valid and binding upon the Company and any
Subsidiary Guarantor in accordance with its terms.
ARTICLE 10
GUARANTEE OF SENIOR NOTES
Section 10.01. Subsidiary Guarantee
Subject to the provisions of this Article 10, each Subsidiary
Guarantor, if any, jointly and severally, shall unconditionally guarantee, on
a senior unsecured basis, to each Holder of a Senior 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 Senior
Notes or the obligations of the Company to the Holders or the Trustee
hereunder or under the Senior Notes, that (a) the principal of, premium, if
any, and any accrued and unpaid interest on the Senior Notes shall be duly and
punctually paid in full when due, whether at maturity, by acceleration or
otherwise, and interest on overdue principal of, premium, if any, and (to the
extent permitted by law) interest on the Senior Notes and all other
obligations of the Company to the Holders or the Trustee hereunder or under
the Senior Notes (including fees, expenses or other) shall be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; (b) in
case of any extension of time of payment or renewal of any Senior Notes or any
of such other obligations, the same shall 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; and (c) any and all costs and
expenses (including, without limitation, reasonable attorneys' fees and
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expenses) incurred by the Trustee or its agents or any Holder of Senior Notes
in enforcing any rights under any Subsidiary Guarantee shall be promptly paid
in full when due. Failing payment when due of any amount so guaranteed or
failing performance of any other Guaranteed Obligation of the Company to the
Holders, for whatever reason, each Subsidiary Guarantor shall be obligated to
pay, or to perform or to cause the performance of, the same immediately. Each
Subsidiary Guarantee shall be a guarantee of payment and not a guarantee of
collection. An Event of Default under this Indenture or the Senior Notes
shall constitute an event of default under each Subsidiary Guarantee, and
shall entitle the Holders of Senior Notes to accelerate the Guaranteed
Obligations of the Subsidiary Guarantors in the same manner and to the same
extent as the Guaranteed Obligations of the Company. Each Subsidiary
Guarantor's Subsidiary Guarantee shall be unconditional, irrespective of the
validity, regularity or enforceability of the Senior Notes or this Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of Senior Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same
or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. By executing a Subsidiary
Guarantee, each Subsidiary Guarantor shall be deemed to waive diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company and such Subsidiary Guarantor,
protest, notice and all demands whatsoever and covenant that its Subsidiary
Guarantee shall not be discharged except by complete performance of all
Guaranteed Obligations, except as specified in Section 10.03. If any Holder
or the Trustee is required by any court or otherwise to return to the Company
or such Subsidiary Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to either the Company or such Subsidiary
Guarantor, any amount paid by any such entity to the Trustee or such Holder,
such Subsidiary Guarantor's Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. By executing a
Subsidiary Guarantee, each Subsidiary Guarantor shall be deemed to agree that
it shall not be entitled to any right of subrogation in relation to the
Holders in respect of any Guaranteed Obligations until payment in full of all
Guaranteed Obligations and further that, as between the Subsidiary Guarantors,
on the one hand, and the Holders of Senior Notes and the Trustee, on the other
hand, (x) the maturity of the Guaranteed Obligations may be accelerated as
provided in Article 6 hereof for the purposes of its Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations, and (y) in the event of
any acceleration of such Guaranteed Obligations as provided in Article 6
hereof, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Subsidiary Guarantor for the purpose
of its Subsidiary Guarantee. The Guaranteed Obligations of each
Subsidiary Guarantor shall rank pari passu in right of payment with all
Guarantor Senior Indebtedness of such Subsidiary Guarantor.
Section 10.02. Limitation of the Subsidiary Guarantors' Liability
Each Subsidiary Guarantor, by executing a Subsidiary Guarantee, and,
by its acceptance hereof, each beneficiary hereof, shall be deemed to confirm
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that it is the intention and agreement of all such parties that such
Subsidiary Guarantor's Subsidiary Guarantee not constitute a fraudulent
transfer, conveyance or obligation for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law (including, without limitation, the Debtor and
Creditor Law of the State of New York). To effectuate the foregoing
intention, each such Person hereby irrevocably agrees that the Guaranteed
Obligations of the Subsidiary Guarantors under this Article 10 shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor, result
in the Guaranteed Obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting a fraudulent transfer, conveyance or
obligation.
Section 10.03. Release of the Subsidiary Guarantors
In the event of (i) a sale or other disposition of all, or
substantially all, of the assets of any Subsidiary Guarantor, by way of
merger, consolidation or otherwise, or a sale or other disposition of all of
the capital stock of any Subsidiary Guarantor, such Subsidiary Guarantor (in
the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the capital stock of such Subsidiary
Guarantor) or the corporation acquiring the property (in the event of a sale
or other disposition of all, or substantially all, of the assets of such
Subsidiary Guarantor) will be released and relieved of any obligations under
its Subsidiary Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied in accordance with Section 4.10 hereof, (ii) in the
event the Subsidiary Guarantee was issued under Section 4.09 or 4.16 hereof by
reason of the incurrence of Indebtedness by a Subsidiary Guarantor permitted
pursuant to Section 4.09 hereof, upon the payment in full, whether at maturity
or otherwise, of all Indebtedness incurred by the Subsidiary Guarantor by
reason of which it executed or was required to execute a Subsidiary Guarantee,
such Subsidiary Guarantor will be released and relieved of any obligations
under such Subsidiary Guarantee and (iii) in the event the Subsidiary
Guarantee was issued by reason of the Guarantee or securing of payment of
Indebtedness other than the Senior Notes pursuant to Section 4.15 hereof, upon
the release or discharge of the Guarantee by the Subsidiary Guarantor of all
such Indebtedness, except a discharge by or as a result of payment under such
Guarantee, such Subsidiary Guarantor will be released and relieved of any
obligation under such Subsidiary Guarantee. The Trustee shall deliver an
appropriate instrument evidencing such release upon receipt of a request of
the Company accompanied by an Officers' Certificate and Opinion of Counsel
certifying as to the compliance with this Section 10.03. Any Subsidiary
Guarantor not released from its obligations under its Subsidiary Guarantee
shall remain liable for the full amount of principal of, premium, if any, and
accrued and unpaid interest on the Senior Notes and for the other obligations
of such Subsidiary Guarantor under this Indenture as provided in this Article
10.
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Section 10.04. Merger, Consolidation or Sale of Assets
No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Subsidiary
Guarantor (other than a Subsidiary of the Company that is a Subsidiary
Guarantor), unless (i) subject to Section 10.03 hereof, the Person formed by
or surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) assumes all the Guaranteed Obligations of such Subsidiary Guarantor
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists and (iii) such Subsidiary
Guarantor, or any Person formed by or surviving any such consolidation or
merger, would be permitted by virtue of the Company's pro forma Fixed Charge
Coverage Ratio to incur, immediately after giving effect to such transaction,
at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09(a) hereof; provided that the
foregoing provisions shall not apply to any Asset Sale subject to Section 4.10
hereof.
Section 10.05. Execution and Delivery of Subsidiary Guarantees
To evidence its Subsidiary Guarantee set forth in this Article 10,
each Subsidiary Guarantor shall execute and deliver to the Trustee a
Subsidiary Guarantee in the form of Exhibit C hereto and a supplemental
indenture in the form of Exhibit D hereto, pursuant to which such Subsidiary
shall become a Subsidiary Guarantor under this Article 10 and shall guarantee
the obligations of the Company as provided in this Article 10. Concurrently
with the execution and delivery of such Subsidiary Guarantee and supplemental
indenture, the Company shall deliver to the Trustee an Opinion of Counsel
reasonably satisfactory to the Trustee substantially to the effect that such
Subsidiary Guarantee and supplemental indenture have been duly authorized,
executed and delivered by such Subsidiary Guarantor and that, subject to the
application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
fraudulent transfer and other laws relating to creditors' rights generally and
to general principles of equity, whether considered in a proceeding at law or
in equity, the Subsidiary Guarantee of such Subsidiary Guarantor contained
herein and in its Subsidiary Guarantee (subject to the limitations set forth
in Section 10.02) is a legal, valid and binding obligation of such Subsidiary
Guarantor, enforceable against such Subsidiary Guarantor in accordance with
its terms.
Each Subsidiary Guarantee shall remain in full force and effect and
apply to all of the Senior Notes notwithstanding any failure to endorse on
each Senior Note a notation of such Subsidiary Guarantee. The delivery of any
Senior Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Subsidiary Guarantee set forth in this
Indenture on behalf of each Subsidiary Guarantor.
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ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss.ss.318(c), the imposed duties shall control.
Section 11.02. Notices
Any notice or communication by the Company, any Subsidiary Guarantor
or the Trustee to the others is duly given if in writing and delivered in
person or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, to the others' address:
If to the Company or any Subsidiary Guarantor:
French Fragrances, Inc.
14100 N.W. 60th Avenue
Miami Lakes, Florida 33014
Telecopier No.: (305) 818-8020
Attention: Chief Financial Officer
With a copy to:
Steel Hector & Davis LLP
200 South Biscayne Boulevard
Suite 4000
Miami, Florida 33131
Telecopier No.: (305) 577-7001
Attention: Beatriz Llorens Koltis, Esq.
If to the Trustee:
Marine Midland Bank
140 Broadway
12th Floor
New York, New York 10005
Telecopier No.: (212) 658-6425
Attention: Corporate Trust Administration -
French Fragrances
The Company, any Subsidiary Guarantor or the Trustee, by notice to
the others, may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to the Trustee
or to Holders of Senior Notes) shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; five Business Days after
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being deposited in the mail, postage prepaid, if mailed; when answered back,
if telexed; when receipt acknowledged, if telecopied; and the next Business
Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to the Trustee shall be deemed to have
been duly given to the Trustee when received at its Corporate Trust Office,
Attention: Corporate Trust Administration French Fragrances.
Any notice or communication to a Holder of a Senior Note shall be
either mailed by first class mail or sent by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by
the Registrar. Any notice or communication shall also be so mailed or sent
to any Person described in TIA ss.ss. 313(c), to the extent required by the
TIA. Failure to mail or send a notice or communication to a Holder of a
Senior Note or any defect in it shall not affect its sufficiency with respect
to other Holders of Senior Notes.
If a notice or communication is mailed or sent in the manner
provided above within the time prescribed, it is duly given, whether or not
the addressee receives it.
If the Company mails or sends a notice or communication to Holders
of Senior Notes, it shall mail or send a copy to the Trustee and each Agent at
the same time.
Section 11.03. Communication by Holders of Senior Notes with Other
Holders of Senior Notes
Holders of the Senior Notes may communicate pursuant to TIA ss.ss.
312(b) with other Holders of Senior Notes with respect to their rights under
this Indenture or the Senior Notes. The Company, any Subsidiary Guarantor,
the Trustee, the Registrar and anyone else shall have the protection of TIA
ss.ss. 312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
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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 (other than a certificate
provided pursuant to TIA ss.ss. 314(a)(4)) shall comply with the provisions of
TIA ss.ss. 314(e) and shall include:
(a) a statement that the person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been satisfied.
Section 11.06. Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or at a
meeting of Holders of Senior Notes. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
Section 11.07. No Personal Liability of Directors, Officers,
Employees, Partners and Stockholders
No director, officer, employee, incorporator, partner or stockholder
of the Company or any Subsidiary of the Company, as such, shall have any
liability for any obligations of the Company or any Subsidiary Guarantor under
the Senior Notes, this Indenture or any Subsidiary Guarantee or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of the Senior Notes by accepting a Senior Note waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Senior Notes. Such waiver may not be effective to waive
liabilities under the federal securities laws, and it is the view of the
Commission that such a waiver is against public policy.
Section 11.08. Governing Law
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE, THE SENIOR NOTES AND ANY SUBSIDIARY GUARANTEE.
Section 11.09. No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
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Section 11.10. Successors
All agreements of the Company in this Indenture and the Senior Notes
shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successor.
Section 11.11. Severability
In case any provision in this Indenture or in the Senior Notes shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 11.12. Counterpart Originals
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
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 of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
Section 11.14. Agent for Service of Process; Consent to
Jurisdiction
By the execution and delivery of this Indenture, the Company
(i) acknowledges that it has, by separate written instrument, irrevocably
designated and appointed Abelman, Frayne & Schwab, 150 East 42nd Street, 26th
Floor, New York, NY 10017-5612 (Attn: Peter Lynfield) as its authorized agent
upon whom process may be served in any suit or proceeding arising out of or
relating to the Senior Notes or this Indenture that may be instituted in any
federal or New York state court located in The City of New York, or brought by
the Trustee (whether in its individual capacity or in its capacity as Trustee
hereunder) or by any Holder, and acknowledges that Abelman, Frayne & Schwab
has accepted such designation, (ii) submits to the non-exclusive jurisdiction
of any such court in any such suit or proceeding, and (iii) agrees that
service of process upon Abelman, Frayne & Schwab and written notice of said
service to the Company (mailed or delivered to the Company's Corporate
Secretary at its principal office 14100 N.W. 60th Avenue, Miami Lakes, Florida
33014 as specified in Section 11.02 hereof), shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
The Company further agrees to take any and all action, including the execution
and filing of any and all such documents and instruments, as may be necessary
to continue such designation and appointment of Abelman, Frayne & Schwab in
full force and effect so long as this Indenture shall be in full force and
effect.
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The Company irrevocably and unconditionally waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to
the laying of venue of any such action, suit or proceeding in any such court
or any appellate court with respect thereto. The Company irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum
to the maintenance of such action, suit or proceeding in any such court.
Any Subsidiary that executes a Subsidiary Guarantee and a
supplemental indenture in the form of EXHIBIT D hereto, pursuant to which such
Subsidiary shall become a Subsidiary Guarantor under Article 10 hereof, shall
be deemed to have irrevocably designated and appointed Abelman, Frayne &
Schwab as its authorized agent for service of process and shall be bound by
the provisions set forth in this Section 11.14 as if it were the Company.
[Signatures on following page]
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SIGNATURES
Dated as of April 27, 1998 French Fragrances, Inc.
By: /s/William J. Mueller
--------------------------
Title: Vice President-Operations,
Chief Financial Officer
and Treasurer
Marine Midland Bank,
as Trustee
By: /s/Frank J. Godino
------------------
Title: Vice President
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EXHIBIT A-1
(FACE OF NOTE)
10 3/8% Senior Note due 2007, Series C
No. $__________
CUSIP NO. 357658AD5
FRENCH FRAGRANCES, INC.
promises to pay to
____________________
or its registered assigns
the principal sum of
Dollars on May 15, 2007.
Interest Payment Dates: May 15 and November 15, commencing November 15, 1998.
Record Dates: May 1 and November 1 (whether or not a Business Day).
Dated: ____________,1998
French Fragrances, Inc.
By: ________________________________
Name:
Title:
(SEAL)
This is one of the Series C Senior Notes
referred to in the within-
mentioned Indenture:
Marine Midland Bank, as Trustee
By: ___________________________
(Authorized Signature)
Dated: ________________________
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[Unless and until it is exchanged in whole or in part for Definitive
Notes, this Note may not be transferred except as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.] (1)
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(As defined in Rule 144A under the Securities Act) (A "QIB") OR
(B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE COMPANY, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (D) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND IN
THE CASE OF CLAUSE (D) OR (E) BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY SO REQUESTS)
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND, AND ACKNOWLEDGES THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. AS USED HEREIN,
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THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING." (2)
This Note shall not become valid or obligatory until the certificate of
authentication hereon shall have been duly manually signed by the Trustee in
accordance with the Indenture. This Note shall be governed by and construed
in accordance with the laws of the State of the New York.
- --------------------------
(1) This paragraph should be included only if the Senior Note is issued in
global form.
(2) This paragraph and the legend constituting the preceding five
paragraphs should be removed upon the exchange of Senior Notes for Exchange
Senior Notes in the Exchange Offer or upon the registration of the Senior
Notes pursuant to the terms of the Registration Rights Agreement. Also upon
the Exchange Offer, the Senior Notes issued as Exchange Senior Notes shall be
denominated as Series D and paragraph 20 thereof shall be removed.
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(Form of Reverse Side of Series C Senior Note)
10 3/8% Senior Note due 2007, Series C
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined) unless otherwise indicated.
1. INTEREST. French Fragrances, Inc., a Florida corporation (the
"Company"), promises to pay interest on the principal amount of this Senior
Note at the rate and in the manner specified below. The Company shall pay
interest on the principal amount of this Senior Note in cash at the rate per
annum of 10 3/8%. The Company will pay interest semi-annually on May 15 and
November 15 of each year, commencing November 15, 1998, or, if any such day is
not a Business Day, on the next succeeding Business Day (each, an "Interest
Payment Date") to Holders of record on the immediately preceding May 1 and
November 1. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Interest shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Senior Notes. To the extent
lawful, the Company shall pay interest on overdue principal at the rate of the
then applicable interest rate on the Senior Notes; it shall pay interest on
overdue installments of interest (without regard to any applicable grace
periods) at the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior
Notes (except defaulted interest) to the Persons who are registered Holders
of Senior Notes at the close of business on the record date next preceding the
Interest Payment Date, even if such Senior Notes are cancelled after such
record date and on or before such Interest Payment Date. The Holder hereof
must surrender this Senior Note to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. The Company, however, may pay principal, premium, if any, and
interest by check payable in such money. The Senior Notes will be payable as
to principal, premium and interest at the office or agency of the Company
maintained for such purpose within the City and State of New York or, at the
option of the Company, payment of interest may be made by check mailed to the
Holders of Senior Notes at their respective addresses set forth in the
register of Holders of Senior Notes. Unless otherwise designated by the
Company, the Company's office or agency in New York, New York will be the
office of the Trustee maintained for such a purpose.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without prior notice to any Holder of a Senior Note.
The Company or any Subsidiary may act in any such capacity.
4. INDENTURE. The Company issued the Senior Notes under an
Indenture, dated as of April 27, 1998 (the "Indenture"), between the Company
and the Trustee. The terms of the Senior Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb), as in
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effect on the date of the Indenture. The Senior Notes are subject to all such
terms, and Holders of Senior Notes are referred to the Indenture and such act
for a statement of such terms. The terms of the Indenture shall govern any
inconsistencies between the Indenture and the Senior Notes. The Senior Notes
are senior unsecured obligations of the Company limited to $40,000,000 in
aggregate principal amount. The Senior Notes include the Initial Senior Notes
and the Exchange Senior Notes, to be issued in Exchange for the Initial Senior
Notes pursuant to the Indenture. The Initial Senior Notes and the Exchange
Senior Notes are treated as a single class of securities under the Indenture.
5. OPTIONAL REDEMPTION. The Senior Notes will not be redeemable
at the Company's option prior to May 15, 2002. Thereafter, the Senior Notes
will be subject to redemption at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days' notice, in cash at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest, if any, thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on
May 15 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2002 . . . . . . . . . . . . . . 105.188%
2003 . . . . . . . . . . . . . . 103.458%
2004 . . . . . . . . . . . . . . 101.729%
2005 and thereafter. . . . . . . 100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to May 15, 2000,
the Company, at its option, may on any one or more occasions redeem up to 35%
of the initially outstanding aggregate principal amount of Senior Notes at a
redemption price equal to 109 3/8% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereon to the redemption date, with the
net proceeds of one or more Public Equity Offerings of the Company
generating in each case net proceeds of at least $15.0 million; provided that
at least 65% of the initially outstanding aggregate principal amount of Senior
Notes remains outstanding immediately after the occurrence of any such
redemption; and provided, further, that such redemption shall occur within 60
days of the date of the closing of any such Public Equity Offering of the
Company.
6. MANDATORY REDEMPTION. Except as set forth in Sections 4.10 and
4.18 of the Indenture, the Company is not required to make mandatory
redemption or sinking fund payments with respect to the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER. (a) Upon the occurrence of a
Change of Control, each Holder of Senior Notes will have the right to require
the Company to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes at an offer price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the date of purchase. Holders of Senior
Notes that are subject to an offer to purchase will receive a Change of
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Control Offer from the Company prior to any related Change of Control Payment
Date and may elect to have such Senior Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
(b) If the Company or a Subsidiary consummates any Asset Sales, and
when the aggregate amount of Excess Proceeds from such Asset Sales exceeds
$10.0 million, the Company will be required to make an offer to all Holders of
Senior Notes to purchase the maximum principal amount of Senior Notes that may
be purchased out of the Excess Proceeds, at an offer price in cash in an
amount equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Indenture; provided that, if by reason of Section
4.10(b) in the indenture, dated as of May 13, 1997, relating to the Series B
Senior Notes, the Company is required to make an Asset Sale Offer (as defined
therein) to the holders of the Series B Senior Notes, the Excess Proceeds may
first be applied to the purchase of the Series B Senior Notes and, to the
extent so applied, the Excess Proceeds available for the purchase of Senior
Notes shall be correspondingly reduced. If the aggregate principal amount of
Senior Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds available for the purchase of Senior Notes, the Trustee shall select
the Senior Notes to be purchased on a pro rata basis. Holders of Senior Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
Senior Notes purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Senior Notes are to be redeemed at its registered address.
Senior Notes may be redeemed in part but only in whole multiples of $1,000,
unless all of the Senior Notes held by a Holder of Senior Notes are to be
redeemed. On and after the redemption date, interest ceases to accrue on
Senior Notes or portions of them called for redemption unless the Company
defaults in making such redemption payment.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Notes may be registered and
Senior Notes may be exchanged as provided in the Indenture. The Registrar and
the Trustee may require a Holder of a Senior Note, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Registrar need
not exchange or register the transfer of any Senior Note or portion of a
Senior Note selected for redemption. Also, it need not exchange or register
the transfer of any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee
for registration of the transfer of this Senior Note, the Trustee, any Agent
and the Company may deem and treat the Person in whose name this Senior Note
is registered as its absolute owner for the purpose of receiving payment of
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principal of, premium, if any, and interest on this Senior Note and for all
other purposes whatsoever, whether or not this Senior Note is overdue, and
neither the Trustee, any Agent nor the Company shall be affected by notice to
the contrary. The registered Holder of a Senior Note shall be treated as its
owner for all purposes.
11. AMENDMENTS, SUPPLEMENT AND WAIVERS. Subject to certain
exceptions, the Indenture or the Senior Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Senior Notes then outstanding (including consents obtained in connection
with a tender offer or exchange offer for Senior Notes), and any existing
Default or compliance with any provision of the Indenture or the Senior Notes
may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Senior Notes (including consents obtained in
connection with a tender offer or exchange offer for Senior Notes). However,
without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Senior Notes held by a non-consenting holder) (i) reduce
the principal amount of Senior Notes whose Holders must consent to an
amendment, supplement or waiver, (ii) reduce the principal of or change the
fixed maturity of any Senior Note or alter the provisions with respect to the
redemption of the Senior Notes, (iii) reduce the rate of or change the time
for payment of interest on any Senior Note, (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on, the
Senior Notes, including, without limitation, payment of the Change of Control
Payment or the Asset Sale Offer Price (except a rescission of acceleration of
the Senior Notes by the Holders of at least a majority in aggregate principal
amount of the Senior Notes and a waiver of the payment default that resulted
from such acceleration), (v) make any Senior Note payable in money other than
that stated in the Senior Notes, (vi) make any change in the provisions of the
Indenture relating to waivers of Defaults or the rights of Holders of Senior
Notes to receive payments of principal of or premium, if any, or interest on
the Senior Notes, (vii) waive a redemption payment with respect to any Senior
Note or (viii) make any change in the foregoing amendment and waiver
provisions. Notwithstanding the foregoing, without the consent of any Holder
of Senior Notes, the Company and the Trustee may amend or supplement the
Indenture or the Senior Notes to cure any ambiguity, defect or inconsistency,
to provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes, to provide for the assumption of the Company's
obligations to Holders of Senior Notes in the case of a merger or
consolidation or other business combination, to make any change that would
provide any additional rights or benefits to the Holders of Senior Notes or
that does not materially adversely affect the legal rights under the Indenture
of any such Holder, to provide for Subsidiary Guarantees of the Senior Notes
or to comply with requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Each of the following constitutes an
Event of Default: (i) default for 30 days in the payment when due of interest
on the Senior Notes; (ii) default in the payment of all or any part of the
principal, or premium, if any, on the Senior Notes when and as the same
becomes due and payable at maturity, upon redemption, by acceleration, or
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otherwise, including, without limitation, the payment of the Change of Control
Payment or the Asset Sale Offer Price, or otherwise; (iii) failure by the
Company or any of its Subsidiaries to observe or perform in all material
respects the covenants contained in Sections 4.07, 4.09, 4.12 and 5.01 of the
Indenture; (iv) failure by the Company or any of its Subsidiaries to observe
or perform in all material respects any other covenant or agreement on the
part of the Company or such Subsidiary contained in the Senior Notes or the
Indenture and the continuance of such failure for a period of 30 days after
written notice is given to the Company by the Trustee or to the Company and
the Trustee by the holders of at least 25% in aggregate principal amount of
the Senior Notes then outstanding, specifying such default, requiring that it
be remedied and stating that such notice is a "Notice of Default;" (v) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness by the Company or
any of its Subsidiaries (or the payment of which is guaranteed by the Company
or any of its Subsidiaries) whether such Indebtedness or guarantee now exists,
or is created after the date of the Indenture, which default (A) is caused by
a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (B) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each of (A) and (B), the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $3.0 million or more; (vi) failure by the Company or any of its
Subsidiaries to pay final non-appealable judgments aggregating in excess of
$3.0 million, which judgments are not paid, discharged or stayed for a period
of 60 days; (vii) except as permitted by the Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; and (viii) certain events of bankruptcy or insolvency with respect
to the Company or any of its Significant Subsidiaries, or any group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Senior
Notes may declare all the Senior Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary, all outstanding Senior Notes will
become due and payable without further action or notice. Holders of the
Senior Notes may not enforce the Indenture or the Senior Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Senior Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Senior Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
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interest. The Holders of a majority in aggregate principal amount of the
Senior Notes then outstanding, by notice to the Trustee, may on behalf of the
Holders of all of the Senior Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default
or Event of Default in the payment of interest on, or the principal of, Senior
Notes and except as to payments required under Sections 4.10 and 4.18 of the
Indenture. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. SUBSIDIARY GUARANTEES. This Senior Note is entitled to the
benefits of any Subsidiary Guarantee of any Subsidiary Guarantor made for the
benefit of the Holders in accordance with the provisions of the Indenture.
Upon the terms and subject to the conditions set forth in the Indenture, such
Subsidiary Guarantors, if any, will unconditionally guarantee that the
principal of and premium, if any, and interest on the Senior Notes will be
duly and punctually paid in full when due, whether at maturity, by
acceleration or otherwise, and interest on overdue principal and premium, if
any, and (to the extent permitted by law) interest on any interest, if any, on
the Senior Notes and that all other Guaranteed Obligations of the Company to
the Holders or the Trustee under the Senior Notes or the Indenture (including
fees, expenses or other Guaranteed Obligations) will be promptly paid in full.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee;
however, if the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to
continue as Trustee or resign.
15. NO PERSONAL LIABILITIES OF DIRECTORS, OFFICERS, EMPLOYEES,
PARTNERS AND STOCKHOLDERS. No director, officer, employee, manager,
incorporator, partner or stockholder of the Company or any Subsidiary of the
Company, as such, shall have any liability for any obligations of the Company
or any Subsidiary Guarantor under the Senior Notes, the Indenture or any
Subsidiary Guarantee or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder of a Senior Note by accepting
a Senior Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Senior Notes.
16. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder of a Senior Note or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
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18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior Notes and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Holders of Senior Notes. No representation is made as to the accuracy of such
numbers either as printed on the Senior Notes or as contained in any notice of
redemption, and reliance may be placed only on the other identification
numbers placed thereon.
19. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE SENIOR NOTES AND ANY
SUBSIDIARY GUARANTEE.
20. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement among the Company and the Initial Purchaser, the Company will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Senior Note shall have the right to exchange this Senior Note for the
Company's 10 3/8% Senior Notes due 2007, Series D (the "Exchange Senior
Notes"), which have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects to the
Initial Senior Notes. The Holders of the Initial Senior Notes shall be
entitled to receive Liquidated Damages in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.
The Company will furnish to any Holder of a Senior Note upon written
request and without charge a copy of the Indenture. Request may be made to:
French Fragrances, Inc.
14100 N.W. 60th Avenue
Miami Lakes, Florida 33014
Telecopier No.: (305) 818-8020
Attention: Chief Financial Officer
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SCHEDULE OF EXCHANGES OF SENIOR NOTES (3)
<TABLE>
<CAPTION>
THE FOLLOWING EXCHANGES OF A PART OF THIS GLOBAL NOTE FOR OTHER
SENIOR NOTES HAVE BEEN MADE:
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Principal Amount
Signature of this Global
Amount of authorized officer Amount of Note following
decrease in or Trustee or increase in such decrease or
Date of Principal Amount Note Custodian Principal Amount increase
Exchange of this Global of this Global
Note Note
- -----------------------------------------------------------------------------------------
- ---------------------
(3) This should be included only if the Senior Note is issued in global form.
</TABLE>
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ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we)
assign and transfer this Senior Note to
______________________________________________________________________________
(Insert assignee's social security or federal tax I.D. no.)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably
appoint_______________________________________________________________________
agent to transfer this Senior 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 Senior Note)
Signature Guarantee.
[ ]
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Senior Note
purchased by the Company pursuant to Section 4.10 or Section 4.18 of the
Indenture check the appropriate box:
[ ] Section 4.10 [ ] Section 4.18
If you want to have only part of the Senior Note purchased by the
Company pursuant to Section 4.10 or Section 4.18 of the Indenture, state the
amount (in integral multiples of $1,000) you elect to have purchased:
$________________
Date:____________
Your Signature:________________________________
(Sign exactly as your name appears on the face
of this Senior Note)
Signature Guarantee.
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EXHIBIT A-2
-----------
(Face of Regulation S Global Note)
10 3/8% Senior Note due 2007, Series C
No._____ $____________________
CUSIP NO. U31403AB1
FRENCH FRAGRANCES, INC.
promises to pay to
____________________
or its registered assigns
the principal sum of
Dollars on May 15, 2007.
Interest Payment Dates: May 15 and November 15, commencing November 15, 1998.
Record Dates: May 1 and November 1 (whether or not a Business Day).
Dated: ____________, 1998
FRENCH FRAGRANCES, INC.
By:_______________________________
Name:
Title:
(SEAL)
This is one of the Series C Senior Notes
referred to in the within-
mentioned Indenture:
Marine Midland Bank, as Trustee
By:______________________________________
(Authorized Signature)
Dated:___________________________________
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(Back of Regulation S Global Note)
10 3/8% Senior Note due 2007, Series C
[Unless and until it is exchanged in whole or in part for Definitive
Notes, this Note may not be transferred except as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Company or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.] (1)
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (As
defined in Rule 144A under the Securities Act) (A "QIB") OR (B)
IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND IN THE CASE OF CLAUSE (D) OR (E) BASED UPON
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY IF THE COMPANY
SO REQUESTS) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR
AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND, AND
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(4) ACKNOWLEDGES THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
This Regulation S Global Note is exchangeable in whole or in part for one
or more Rule 144A Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Global Note for one or more Rule 144A Global Notes, the Trustee
shall cancel this Regulation S Global Note. (2)
This Note shall not become valid or obligatory until the certificate of
authentication hereon shall have been duly manually signed by the Trustee in
accordance with the Indenture. This Note shall be governed by and construed
in accordance with the Laws of the State of the New York.
- -----------------------
(1) This paragraph should be included only if the Senior Note is issued in
global form.
(2) This paragraph and the legend constituting the preceding six paragraphs
should be removed upon the exchange of Senior Notes for Exchange Senior
Notes in the Exchange Offer or upon the registration of the Senior Notes
pursuant to the terms of the Registration Rights Agreement. Also upon
the Exchange Offer, the Senior Notes issued as Exchange Senior Notes
shall be denominated as Series D and paragraph 20 thereof shall be
removed.
<PAGE>
<PAGE>
(Form of Reverse Side of Series C Senior Note)
10 3/8% Senior Note due 2007, Series C
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined) unless otherwise indicated.
1. INTEREST. French Fragrances, Inc., a Florida corporation (the
"Company"), promises to pay interest on the principal amount of this Senior
Note at the rate and in the manner specified below. The Company shall pay
interest on the principal amount of this Senior Note in cash at the rate per
annum of 10 3/8%. The Company will pay interest semi-annually on May 15 and
November 15 of each year, commencing November 15, 1998, or, if any such day is
not a Business Day, on the next succeeding Business Day (each, an "INTEREST
PAYMENT DATE") to Holders of record on the immediately preceding May 1 and
November 1. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Interest shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Senior Notes. To the extent
lawful, the Company shall pay interest on overdue principal at the rate of the
then applicable interest rate on the Senior Notes; it shall pay interest on
overdue installments of interest (without regard to any applicable grace
periods) at the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior
Notes (except defaulted interest) to the Persons who are registered Holders of
Senior Notes at the close of business on the record date next preceding the
Interest Payment Date, even if such Senior Notes are cancelled after such
record date and on or before such Interest Payment Date. The Holder hereof
must surrender this Senior Note to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. The Company, however, may pay principal, premium, if any, and
interest by check payable in such money. The Senior Notes will be payable as
to principal, premium and interest at the office or agency of the Company
maintained for such purpose within the City and State of New York or, at the
option of the Company, payment of interest may be made by check mailed to the
Holders of Senior Notes at their respective addresses set forth in the
register of Holders of Senior Notes. Unless otherwise designated by the
Company, the Company's office or agency in New York, New York will be the
office of the Trustee maintained for such a purpose.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or Company-registrar without prior notice to any Holder of a Senior
Note. The Company or any Subsidiary may act in any such capacity.
4. INDENTURE. The Company issued the Senior Notes under an
Indenture, dated as of April 27, 1998 (the "INDENTURE"), between the Company
and the Trustee. The terms of the Senior Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss.ss.ss. 77aaa-77bbbb), as
<PAGE>
<PAGE>
in effect on the date of the Indenture. The Senior Notes are subject to all
such terms, and Holders of Senior Notes are referred to the Indenture and such
act for a statement of such terms. The terms of the Indenture shall govern
any inconsistencies between the Indenture and the Senior Notes. The Senior
Notes are senior unsecured obligations of the Company limited to $40,000,000
in aggregate principal amount. The Senior Notes include the Initial Senior
Notes and the Exchange Senior Notes, to be issued in exchange for the Initial
Senior Notes pursuant to the Indenture. The Initial Senior Notes and the
Exchange Senior Notes are treated as a single class of securities under the
Indenture.
5. OPTIONAL REDEMPTION. The Senior Notes will not be redeemable
at the Company's option prior to May 15, 2002. Thereafter, the Senior Notes
will be subject to redemption at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days' notice, in cash at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest, if any, thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on
May 15 of the years indicated below:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
2002. . . . . . . . . . . . . . 105.188%
2003. . . . . . . . . . . . . . 103.458%
2004. . . . . . . . . . . . . . 101.729%
2005 and thereafter . . . . . . 100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to May 15, 2000,
the Company, at its option, may on any one or more occasions redeem up to 35%
of the initially outstanding aggregate principal amount of Senior Notes at a
redemption price equal to 109 3/8% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereon to the redemption date, with the
net proceeds of one or more Public Equity Offerings of the Company generating
in each case net proceeds of at least $15.0 million; PROVIDED that at least
65% of the initially outstanding aggregate principal amount of Senior Notes
remains outstanding immediately after the occurrence of any such redemption;
and PROVIDED, FURTHER, that such redemption shall occur within 60 days of the
date of the closing of any such Public Equity Offering of the Company.
6. MANDATORY REDEMPTION. Except as set forth in Sections 4.10 and
4.18 of the Indenture, the Company is not required to make mandatory
redemption or sinking fund payments with respect to the Senior Notes.
7. REPURCHASE AT OPTION OF HOLDER. (a) Upon the occurrence of a
Change of Control, each Holder of Senior Notes will have the right to require
the Company to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes at an offer price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the date of purchase. Holders of Senior
<PAGE>
<PAGE>
Notes that are subject to an offer to purchase will receive a Change of
Control Offer from the Company prior to any related Change of Control Payment
Date and may elect to have such Senior Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
(b) If the Company or a Subsidiary consummates any Asset Sales, and
when the aggregate amount of Excess Proceeds from such Asset Sales exceeds
$10.0 million, the Company will be required to make an offer to all Holders of
Senior Notes to purchase the maximum principal amount of Senior Notes that may
be purchased out of the Excess Proceeds, at an offer price in cash in an
amount equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Indenture; provided that, if by reason of
Section 4.10(b) in the indenture, dated as of May 13, 1997, relating to the
Series B Senior Notes, the Company is required to make an Asset Sale Offer (as
defined therein) to the holders of the Series B Senior Notes, the Excess
Proceeds may first be applied to the purchase of the Series B Senior Notes
and, to the extent so applied, the Excess Proceeds available for the purchase
of Senior Notes shall be correspondingly reduced. If the aggregate principal
amount of Senior Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds available for the purchase of Senior Notes, the Trustee shall
select the Senior Notes to be purchased on a PRO RATA basis. Holders of
Senior Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Senior Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Senior Notes are to be redeemed at its registered address.
Senior Notes may be redeemed in part but only in whole multiples of $1,000,
unless all of the Senior Notes held by a Holder of Senior Notes are to be
redeemed. On and after the redemption date, interest ceases to accrue on
Senior Notes or portions of them called for redemption unless the Company
defaults in making such redemption payment.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Notes may be registered and
Senior Notes may be exchanged as provided in the Indenture. The Registrar and
the Trustee may require a Holder of a Senior Note, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Registrar need
not exchange or register the transfer of any Senior Note or portion of a
Senior Note selected for redemption. Also, it need not exchange or register
the transfer of any Senior Notes for a period of 15 days before a selection of
Senior Notes to be redeemed.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee
for registration of the transfer of this Senior Note, the Trustee, any Agent
and the Company may deem and treat the Person in whose name this Senior Note
<PAGE>
<PAGE>
is registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Senior Note and for all
other purposes whatsoever, whether or not this Senior Note is overdue, and
neither the Trustee, any Agent nor the Company shall be affected by notice
to the contrary. The registered Holder of a Senior Note shall be treated as
its owner for all purposes.
11. AMENDMENTS, SUPPLEMENT AND WAIVERS. Subject to certain
exceptions, the Indenture or the Senior Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Senior Notes then outstanding (including consents obtained in connection
with a tender offer or exchange offer for Senior Notes), and any existing
Default or compliance with any provision of the Indenture or the Senior Notes
may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Senior Notes including consents obtained in
connection with a tender offer or exchange offer for Senior Notes). However,
without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Senior Notes held by a non-consenting holder) (i) reduce
the principal amount of Senior Notes whose Holders must consent to an
amendment, supplement or waiver, (ii) reduce the principal of or change the
fixed maturity of any Senior Note or alter the provisions with respect to the
redemption of the Senior Notes, (iii) reduce the rate of or change the time
for payment of interest on any Senior Note, (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on, the
Senior Notes, including, without limitation, payment of the Change of Control
Payment or the Asset Sale Offer Price (except a rescission of acceleration of
the Senior Notes by the Holders of at least a majority in aggregate principal
amount of the Senior Notes and a waiver of the payment default that resulted
from such acceleration), (v) make any Senior Note payable in money other than
that stated in the Senior Notes, (vi) make any change in the provisions
of the Indenture relating to waivers of Defaults or the rights of Holders of
Senior Notes to receive payments of principal of or premium, if any, or
interest on the Senior Notes, (vii) waive a redemption payment with respect to
any Senior Note or (viii) make any change in the foregoing amendment and
waiver provisions. Notwithstanding the foregoing, without the consent of any
Holder of Senior Notes, the Company and the Trustee may amend or supplement
the Indenture or the Senior Notes to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Senior Notes in addition to or in
place of certificated Senior Notes, to provide for the assumption of the
Company's obligations to Holders of Senior Notes in the case of a merger or
consolidation or other business combination, to make any change that would
provide any additional rights or benefits to the Holders of Senior Notes or
that does not materially adversely affect the legal rights under the Indenture
of any such Holder, to provide for Subsidiary Guarantees of the Senior Notes
or to comply with requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Each of the following constitutes an
Event of Default: (i) default for 30 days in the payment when due of interest
on the Senior Notes; (ii) default in the payment of all or any part of the
principal, or premium, if any, on the Senior Notes when and as the same
<PAGE>
<PAGE>
becomes due and payable at maturity, upon redemption, by acceleration, or
otherwise, including, without limitation, the payment of the Change of Control
Payment or the Asset Sale Offer Price, or otherwise; (iii) failure by the
Company or any of its Subsidiaries to observe or perform in all material
respects the covenants contained in Sections 4.07, 4.09, 4.12 and 5.01 of the
Indenture; (iv) failure by the Company or any of its Subsidiaries to observe
or perform in all material respects any other covenant or agreement on the
part of the Company or such Subsidiary contained in the Senior Notes or the
Indenture and the continuance of such failure for a period of 30 days after
written notice is given to the Company by the Trustee or to the Company and
the Trustee by the holders of at least 25% in aggregate principal amount of
the Senior Notes then outstanding, specifying such default, requiring that it
be remedied and stating that such notice is a "Notice of Default;" (v) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness by the Company or
any of its Subsidiaries (or the payment of which is guaranteed by the Company
or any of its Subsidiaries) whether such Indebtedness or guarantee now exists,
or is created after the date of the Indenture, which default (A) is caused by
a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (B) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each of (A) and (B), the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $3.0 million or more; (vi) failure by the Company or any of its
Subsidiaries to pay final non-appealable judgments aggregating in excess of
$3.0 million, which judgments are not paid, discharged or stayed for a period
of 60 days; (vii) except as permitted by the Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee; and (viii) certain events of bankruptcy or insolvency with respect
to the Company or any of its Significant Subsidiaries, or any group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Senior
Notes may declare all the Senior Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary, all outstanding Senior Notes
will become due and payable without further action or notice. Holders of the
Senior Notes may not enforce the Indenture or the Senior Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Senior Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Senior Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
<PAGE>
<PAGE>
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the
Senior Notes then outstanding, by notice to the Trustee, may on behalf of the
Holders of all of the Senior Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default
or Event of Default in the payment of interest on, or the principal of, Senior
Notes and except as to payments required under Sections 4.10 and 4.18 of the
Indenture. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. SUBSIDIARY GUARANTEES. This Senior Note is entitled to the
benefits of any Subsidiary Guarantee of any Subsidiary Guarantor made for the
benefit of the Holders in accordance with the provisions of the Indenture.
Upon the terms and subject to the conditions set forth in the Indenture, such
Subsidiary Guarantors, if any, will unconditionally guarantee that the
principal of and premium, if any, and interest on the Senior Notes will be
duly and punctually paid in full when due, whether at maturity, by
acceleration or otherwise, and interest on overdue principal and premium, if
any, and (to the extent permitted by law) interest on any interest, if any, on
the Senior Notes and that all other Guaranteed Obligations of the Company to
the Holders or the Trustee under the Senior Notes or the Indenture (including
fees, expenses or other Guaranteed Obligations) will be promptly paid in full.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee;
however, if the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to
continue as Trustee or resign.
15. NO PERSONAL LIABILITIES OF DIRECTORS, OFFICERS, EMPLOYEES,
PARTNERS AND STOCKHOLDERS. No director, officer, employee, manager,
incorporator, partner or stockholder of the Company or any Subsidiary of the
Company, as such, shall have any liability for any obligations of the Company
or any Subsidiary Guarantor under the Senior Notes, the Indenture or any
Subsidiary Guarantee or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder of a Senior Note by accepting
a Senior Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Senior Notes.
16. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder of a Senior Note or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
<PAGE>
<PAGE>
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior Notes and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Holders of Senior Notes. No representation is made as to the accuracy of such
numbers either as printed on the Senior Notes or as contained in any notice of
redemption, and reliance may be placed only on the other identification
numbers placed thereon.
19. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE SENIOR NOTES AND ANY
SUBSIDIARY GUARANTEE.
20. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement among the Company and the Initial Purchaser, the Company will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Senior Note shall have the right to exchange this Senior Note for the
Company's 10 3/8% Senior Notes due 2007, Series D (the "EXCHANGE SENIOR
NOTES"), which have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects to the
Initial Senior Notes. The Holders of the Initial Senior Notes shall be
entitled to receive Liquidated Damages in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.
The Company will furnish to any Holder of a Senior Note upon written
request and without charge a copy of the Indenture. Request may be made to:
French Fragrances, Inc.
14100 N.W. 60th Avenue
Miami Lakes, Florida 33014
Telecopier No.: (305) 818-8020
Attention: Chief Financial Officer
<PAGE>
<PAGE>
SCHEDULE OF EXCHANGES FOR GLOBAL NOTES(3)
The following exchanges of a part of this Regulation S Global Note for
other Global Notes have been made:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Principal Amount
Signature of this Global
Amount of authorized officer Amount of Note following
decrease in or Trustee or increase in such decrease or
Date of Principal Amount Note Custodian Principal Amount increase
Exchange of this Global of this Global
Note Note
- -----------------------------------------------------------------------------------------
- -----------------------
(3) This should be included only if the Senior Note is issued in global form.
</TABLE>
<PAGE>
<PAGE>
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we)
assign and transfer this Senior Note to
______________________________________________________________________________
(Insert assignee's social security or federal tax I.D. no.)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably
appoint__________________________________________________________________
agent to transfer this Senior 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 Senior Note)
Signature Guarantee.
[ ]
<PAGE>
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Senior Note
purchased by the Company pursuant to Section 4.10 or Section 4.18 of the
Indenture check the appropriate box:
[ ] Section 4.10 [ ] Section 4.18
If you want to have only part of the Senior Note purchased by the
Company pursuant to Section 4.10 or Section 4.18 of the Indenture, state the
amount (in integral multiples of $1,000) you elect to have purchased:
$________________
Date:____________
Your Signature:________________________________
(Sign exactly as your name appears on the face
of this Senior Note)
Signature Guarantee.
<PAGE>
<PAGE>
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM
RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(i) of the Indenture)
Marine Midland Bank, as Registrar
140 Broadway, 12th Floor
New York, New York 10005
Re: 10 3/8% Senior Notes due 2007, Series C of French Fragrances, Inc.
Reference is hereby made to the Indenture, dated as of April 27,
1998 (the "Indenture"), between French Fragrances, Inc., as Issuer, and Marine
Midland Bank, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $ _______________ principal amount of Senior Notes
which are evidenced by one or more Rule 144A Global Notes and held with the
Depositary in the name of ______________________ (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the Senior
Notes to a Person who will take delivery thereof in the form of an equal
principal amount of Senior Notes evidenced by one or more Regulation S Global
Notes, which amount, immediately after such transfer, is to be held with the
Depositary through Euroclear or Cedel or both.
In connection with such request and in respect of such Senior Notes, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with Rule 903 or Rule 904 under the United States Securities
Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor
hereby further certifies that:
(1) The offer of the Senior Notes was not made to a person in the United
States;
(2) either:
(a) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its
behalf reasonably believed and believes that the transferee was outside the
United States; or
(b) the transaction was executed in, on or through the facilities of
a designated offshore securities market and neither the Transferor nor any
person acting on its behalf knows that the transaction was prearranged with
a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Regulation S;
<PAGE>
<PAGE>
(4) the transaction is not part of a plan or scheme to evade the
registration provisions of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depositary through
Euroclear or Cedel or both.
Upon giving effect to this request to exchange a beneficial interest in a
Rule 144A Global Note for a beneficial interest in a Regulation S Global Note,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Regulation S Global Notes pursuant to the Indenture and
the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, the initial purchaser of such Senior Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities
Act.
[Insert Name of Transferor]
By: ___________________________
Name:
Title:
Dated:
cc: French Fragrances, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
<PAGE>
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
_________________
Marine Midland Bank, as Registrar
140 Broadway, 12th Floor
New York, New York 10005
Re: 10 3/8% Senior Notes due 2007, Series C of French Fragrances, Inc.
Reference is hereby made to the Indenture, dated as of April 27, 1998
(the "Indenture"), between French Fragrances, Inc., as Issuer, and Marine
Midland Bank, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Senior Notes which
are evidenced by one or more Regulation S Global Notes and held with the
Depositary through Euroclear or Cedel in the name of _________________________
(the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Senior Notes to a Person who will take delivery
thereof in the form of an equal principal amount of Senior Notes evidenced by
one or more Rule 144A Global Notes, in each case to be held with the
Depositary.
In connection with such request and in respect of such Senior Notes, the
Transferor hereby certifies that:
[CHECK ONE]
[ ] 1. such transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Senior Notes are being transferred to a
Person that the Transferor reasonably believes is purchasing the
Senior Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A in a transaction meeting the
requirements of Rule 144A;
or
[ ] 2. such transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
[ ] 3. such transfer is being effected pursuant to an effective
registration satement under the Securities Act;
<PAGE>
<PAGE>
or
[ ] 4. such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A
or Rule 144, and the Transferor hereby further certifies that the
Senior Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with
the requirements of the exemption claimed, which certification is
supported by an Opinion of Counsel, provided by the Transferor
or the transferee (a copy of which the Transferor has attached to
this certification) in form reasonably acceptable to the Company and
to the Registrar, to the effect that such transfer is in compliance
with the Securities Act;
and such Senior Notes are being transferred in compliance with any applicable
blue sky securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in 144A Global Senior
Notes, the resulting beneficial interest shall be subject to the restrictions
on transfer applicable to Rule 144A Global Notes pursuant to the Indenture and
the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, the initial purchaser of such Senior Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities
Act.
[Insert Name of Transferor]
By: ___________________________
Name:
Title:
Dated:
cc: French Fragrances, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
<PAGE>
<PAGE>
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF
TRANSFER OF DEFINITIVE NOTES FOR
OTHER DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN GLOBAL NOTES
(Pursuant to Section 2.06(b) or (e) of the Indenture)
Marine Midland Bank, as Registrar
140 Broadway, 12th Floor
New York, New York 10005
Re: 10 3/8% Senior Notes due 2007, Series C of French Fragrances, Inc.
Reference is hereby made to the Indenture, dated as of April 27, 1998
(the "Indenture"), between French Fragrances, Inc., as Issuer, and Marine
Midland Bank, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This relates to $ __________ principal amount of Senior Notes which are
evidenced by one or more Definitive Notes in the name of _______________ (the
"Transferor"). The Transferor has requested an exchange or transfer of such
Definitive Note(s) in the form of an equal principal amount of Senior Notes
evidenced by (a) one or more Definitive Notes, to be delivered to the
Transferor or, in the case of a transfer of such Senior Notes, to such Person
as the Transferor instructs the Trustee or (b) a beneficial interest in one or
more Global Notes.
In connection with such request and in respect of the Senior Notes
surrendered to the Registrar herewith for exchange (the "Surrendered Senior
Notes"), the Holder of such Surrendered Senior Notes hereby certifies that:
[CHECK ONE]
[ ] 1. the Surrendered Senior Notes are being acquired for the Transferor's
own account, without transfer;
or
[ ] 2. the Surrendered Senior Notes are being transferred to the Company;
or
[ ] 3. the Surrendered Senior Notes are being transferred pursuant to and
in accordance with Rule 144A under the United States Securities Act
of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Senior
Notes are being transferred to a Person that the Transferor
reasonably believes is purchasing the Surrendered Senior Notes for
its own account, or for one or more accounts with respect to which
such Person exercises sole investment discretion, and such Person
and each such account is a "qualified institutional buyer" within
<PAGE>
<PAGE>
the meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
[ ] 4. the Surrendered Senior Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
[ ] 5. the Surrendered Senior Notes are being transferred in a transaction
permitted by Rule 904 under the Securities Act;
or
[ ] 6. the Surrendered Senior Notes are being transferred pursuant to an
effective registration statement under the Securities Act;
or
[ ] 7. such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule
144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that the Senior Notes are being transferred in compliance
with the transfer restrictions applicable to the Definitive Notes
and in accordance with the requirements of the exemption claimed,
which certification is supported by an Opinion of Counsel provided
by the Transferor or the transferee (a copy of which the Transferor
has attached to this certification) in form reasonably acceptable to
the Company and to the Registrar, to the effect that such transfer
is in compliance with the Securities Act;
and the Surrendered Senior Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, the initial purchaser of such Senior Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities
Act.
[Insert Name of Transferor]
By:____________________________
Name:
Title:
Dated:_____________________
cc: French Fragrances, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation<PAGE>
<PAGE>
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE OR REGULATION S GLOBAL NOTE
TO DEFINITIVE NOTE
(Pursuant to Section 2.06(c) of the Indenture)
Marine Midland Bank, as Registrar
140 Broadway, 12th Floor
New York, New York 10005
Re: 10 3/8% Senior Notes due 2007, Series C of French Fragrances, Inc.
Reference is hereby made to the Indenture, dated as of April 27, 1998
(the "Indenture"), between French Fragrances, Inc., as Issuer, and Marine
Midland Bank, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $__________ principal amount of Senior Notes which
are evidenced by a beneficial interest in one or more Rule 144A Global Notes
or Regulation S Global Notes held with the Depositary [through Euroclear or
CEDEL] in the name of __________ (the "Transferor"). The Transferor has
requested an exchange or transfer of such beneficial interest in the form of
an equal principal amount of Senior Notes evidenced by one or more Definitive
Notes to be delivered to the Transferor or, in the case of a transfer of such
Senior Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Senior Notes
surrendered to the Registrar herewith for exchange (the "Surrendered Senior
Notes"), the Holder of such Surrendered Senior Notes hereby certifies that:
[CHECK ONE]
[ ] 1. the Surrendered Senior Notes are being transferred to the beneficial
owner of such Senior Notes;
or
[ ] 2. the Surrendered Senior Notes are being transferred pursuant to and
in accordance with Rule 144A under the United States Securities Act
of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Senior
Notes are being transferred to a Person that the Transferor
reasonably believes is purchasing the Surrendered Senior Notes for
its own account, or for one or more accounts with respect to which
such Person exercises sole investment discretion, and such Person
and each such account is a "qualified institutional buyer" within
the meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A;
or
<PAGE>
<PAGE>
[ ] 3. the Surrendered Senior Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
[ ] 4. the Surrendered Senior Notes are being transferred pursuant to an
effective registration statement under the Securities Act;
or
[ ] 5. the Surrendered Senior Notes are being transferred in a transaction
permitted by Rule 904 under the Securities Act;
or
[ ] 6. such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule
144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that the Senior Notes are being transferred in compliance
with the transfer restrictions applicable to the Global Notes and in
accordance with the requirements of the exemption claimed,
which certification is supported by an Opinion of Counsel provided
by the Transferor or the transferee (a copy of which the Transferor
has attached to this certification) in form reasonably acceptable to
the Company and to the Registrar, to the effect that such transfer
is in compliance with the Securities Act;
and the Surrendered Senior Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, the initial purchaser of such Senior Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities
Act.
[Insert Name of Transferor]
By: _____________________________
Name:
Title:
Dated:______________________
cc: French Fragrances, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
<PAGE>
<PAGE>
EXHIBIT C
SUBSIDIARY GUARANTEE
The undersigned Subsidiary Guarantor (which term includes any successor
or assign), pursuant to the terms of that certain Indenture (the "Indenture"),
dated as of April 27, 1998, between French Fragrances, Inc., a Florida
corporation (the "Company"), and Marine Midland Bank, as trustee (the
"Trustee") hereby, jointly and severally, unconditionally guarantees, on a
senior unsecured basis, to each Holder of a Senior Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Senior
Notes or the obligations of the Company to the Holders or the Trustee under
the Indenture or under the Senior Notes, that (a) the principal of, premium,
if any, and any accrued and unpaid interest on the Senior Notes shall be duly
and punctually paid in full when due, whether at maturity, by acceleration or
otherwise, and interest on overdue principal of, premium, if any, and (to the
extent permitted by law) interest on the Senior Notes and all other
obligations of the Company to the Holders or the Trustee under the Indenture
or under the Senior Notes (including fees, expenses or other) shall be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; (b) in case of any extension of time of payment or renewal of any
Senior Notes or any of such other obligations, the same shall 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; and (c) any
and all costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by the Trustee or its agents or any
Holder of Senior Notes in enforcing any rights under any Subsidiary Guarantee
shall be promptly paid in full when due.
The obligations of the Subsidiary Guarantor to the Holders of Senior
Notes and to the Trustee pursuant to this Subsidiary Guarantee and the
Indenture are expressly set forth in Article 10 of the Indenture and reference
is hereby made to such Indenture for the precise terms of this Subsidiary
Guarantee. THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN
BY REFERENCE. In the case of any discrepancy between this writing and Article
10 of the Indenture, Article 10 of the Indenture shall control.
This is a continuing guarantee and shall remain in full force and effect
and shall be binding upon the Subsidiary Guarantor and its successors and
assigns until full, final and indefeasible payment of all of the Guaranteed
Obligations (subject to Section 10.03 of the Indenture) and shall inure to the
benefit of the successors and assigns of the Trustee and the Holders of Senior
Notes and, in the event of any transfer or assignment of rights by any Holder
of Senior Notes or the Trustee, the rights and privileges herein conferred
upon the party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
guarantee of payment and not a guarantee of collection.
Notwithstanding the foregoing, this Subsidiary Guarantee shall be
automatically released and discharged (a) in the event this Subsidiary
<PAGE>
<PAGE>
Guarantee is issued by reason of the Guarantee or securing of payment of
Indebtedness other than the Senior Notes pursuant to Section 4.15 of the
Indenture, upon the release or discharge of the Guarantee by the Subsidiary
Guarantor of all such Indebtedness, except a discharge by or as a result of
payment under such Guarantee, (b) in the event this Subsidiary Guarantee is
issued under Section 4.09 or 4.16 of the Indenture by reason of the
incurrence of Indebtedness by a Subsidiary Guarantor permitted pursuant to
Section 4.09 of the Indenture, upon the payment in full, whether at maturity
or otherwise, of all Indebtedness incurred by such Subsidiary Guarantor by
reason of which it executed or was required to execute this Subsidiary
Guarantee or (c) upon a sale or other disposition of all, or substantially
all, of the assets of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
capital stock of any Subsidiary Guarantor, which sale, exchange or transfer is
made in compliance with applicable provisions of the Indenture.
The Subsidiary Guarantor and, by its acceptance hereof, each beneficiary
hereof, hereby confirms that it is the intention and agreement of all such
parties that this Subsidiary Guarantee not constitute a fraudulent transfer,
conveyance or obligation for purposes of any Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal or state law (including, without limitation, the Debtor and Creditor
Law of the State of New York). To effectuate the foregoing intention, each
such Person hereby irrevocably agrees that the Guaranteed Obligations of the
Subsidiary Guarantor under Article 10 of the Indenture shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor, result in the Guaranteed Obligations
of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer, conveyance, or obligation.
Capitalized terms used herein but not defined herein shall have the
meanings given to them in the Indenture.
[Subsidiary Guarantor]
By: _____________________________
Name:
Title:
Attest:
________________________________
Name:
Title:
<PAGE>
<PAGE>
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
Supplemental Indenture (this "Supplemental Indenture"), dated as of
____________________, ____, among French Fragrances, Inc., a Florida
corporation (the "Company"), _______________ (the "Guarantor"), a subsidiary
of the Company, and Marine Midland Bank, as trustee under the indenture
referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "INDENTURE"), dated as of April 27, 1998, providing
for the issuance of an aggregate principal amount of $40,000,000 of 10 3/8%
Senior Notes due 2007, Series C, and 10 3/8% Senior Notes due 2007, Series D
(the "SENIOR NOTES");
WHEREAS, Section 4.16 of the Indenture provides that under certain
circumstances the Company is required to cause the Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the
Guarantor shall unconditionally guarantee all of the Company's obligations
under the Senior Notes pursuant to a Guarantee on the terms and conditions set
forth in Article 10 of the Indenture; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Guarantor and the Trustee mutually covenant and agree for the
equal and ratable benefit of the holders of the Senior Notes as follows:
(a) Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
(b) Agreement to Guarantee. The Guarantor hereby agrees, jointly
and severally with all other Subsidiary Guarantors, if any, to guarantee, on a
senior unsecured basis, the Company's obligations under the Senior Notes on
the terms and subject to the conditions set forth in Article 10 of the
Indenture and to be bound by all other applicable provisions of the Indenture.
(c) No Recourse Against Others. No officer, employee, director or
stockholder of the Guarantor shall have any liability for any obligations of
the Company or any Subsidiary Guarantor under the Senior Notes, any Subsidiary
Guarantee, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation of any
such obligation. Each Holder by accepting a Senior Note waives and releases
all such liability, and such waiver and release is part of the consideration
for the issuance of the Senior Notes.
<PAGE>
<PAGE>
(d) Governing Law. The internal laws of the State of New York
shall govern and be used to construe this Supplemental Indenture.
(e) Counterparts. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all
of them together represent the same agreement.
(f) Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction hereof.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________ ___, ______
French Fragrances, Inc.
By: ____________________________
Name:
Title:
[Guarantor]
By: ____________________________
Name:
Title:
Attest:
________________________________
Name:
Title:
Marine Midland Bank,
as Trustee
By: ____________________________
Name:
Title:
Attest:
________________________________
Name:
Title:
REGISTRATION RIGHTS AGREEMENT
Dated as of April 27, 1998
between
French Fragrances, Inc.
and
Donaldson, Lufkin & Jenrette
Securities Corporation
<PAGE>
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of April 27, 1998 between French Fragrances, Inc., a Florida
corporation (the "Company") and Donaldson, Lufkin & Jenrette Securities
Corporation (the "Initial Purchaser"), who has agreed to purchase the
Company's 10 3/8% Series C Senior Notes due 2007, Series C (the "Series C
Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
April 20, 1998 (the "Purchase Agreement"), between the Company and the Initial
Purchaser. In order to induce the Initial Purchaser to purchase the Series C
Notes, the Company has agreed to provide the registration rights set forth in
this Agreement. The execution and delivery of this Agreement is a condition
to the obligations of the Initial Purchaser set forth in Section 7 of the
Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended.
Business Day: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Broker-Dealer Transfer Restricted Securities: Series D Notes that
are acquired by a Broker Dealer in the Exchange Offer in exchange for Series C
Notes that such Broker-Dealer acquired for its own account as a result of
market making activities or other trading activities (other than Series C
Notes acquired directly from the Company or any of its affiliates).
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series D Notes to be issued in the Exchange Offer, (b)
the maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof and (c) the delivery by the
Company to the Registrar under the Indenture of Series D Notes in the same
<PAGE>
<PAGE>
aggregate principal amount as the aggregate principal amount of Transfer
Restricted Securities tendered by Holders thereof pursuant to the Exchange
Offer.
Damages Payment Date: With respect to the Series C Notes, each
Interest Payment Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of
the Series D Notes pursuant to the Exchange Offer Registration Statement
pursuant to which the Company shall offer the Holders of all outstanding
Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities for Series D Notes in an aggregate
principal amount equal to the aggregate principal amount of the Transfer
Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Series C Notes to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act, and to non-U.S.
persons whom the Initial Purchaser reasonably believes are outside the
United States and to whom offers and sales of the Series C Notes may be made
in reliance upon Regulation S under the Act, in transactions meeting the
requirements of Regulation S under the Act.
Global Notes: As defined in the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated the Closing Date, between the
Company and Marine Midland Bank, as trustee (the "Trustee"), pursuant to which
the Notes are to be issued, as such Indenture is amended or supplemented from
time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series C Notes and the Series D Notes.
Person: An individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political
subdivision thereof.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
<PAGE>
<PAGE>
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each
Person who is a Holder of Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Series D Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) which is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds
Broker-Dealer Transfer Restricted Securities.
Series D Notes: The Company's 10 3/8% Series D Senior Notes due
2007 to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii)
upon the request of any Holder of Series C Notes covered by a Shelf
Registration Statement, in exchange for such Series C Notes.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without
complying with the prospectus delivery requirements of the Act, (b) the
date on which such Note has been disposed of in accordance with a Shelf
Registration Statement, (c) the date on which such Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the
Prospectus contained therein) and (d) the date on which such Note is
distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration
in which securities of the Company are sold to an underwriter for reoffering
to the public.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.
<PAGE>
<PAGE>
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
law or Commission policy (after the procedures set forth in Section 6(a)(i)
below have been complied with), the Company shall (i) cause to be filed with
the Commission as soon as practicable after the Closing Date, but in no event
later than 60 days after the Closing Date, the Exchange Offer Registration
Statement, (ii) use its reasonable best efforts to cause such Exchange Offer
Registration Statement to become effective at the earliest possible time, but
in no event later than 150 days after the Closing Date, (iii) in connection
with the foregoing, (A) file all pre-effective amendments to such Exchange
Offer Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
Series D Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting registration of the Series D Notes to be offered in exchange
for the Series C Notes that are Transfer Restricted Securities and to permit
sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be effective continuously, and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; PROVIDED, HOWEVER, that in no event shall such period be
less than 20 Business Days. The Company shall cause the Exchange Offer to
comply with all applicable federal and state securities laws. No securities
other than the Notes shall be included in the Exchange Offer Registration
Statement. The Company shall use its reasonable best efforts to commence the
Exchange Offer on or prior to 30 Business Days after the Exchange Offer
Registration Statement has become effective.
(c) The Company shall include a "Plan of Distribution" section in
the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Restricted Broker-Dealer who holds Series C Notes
that are Transfer Restricted Securities and that were acquired for the account
of such Broker-Dealer as a result of market-making activities or other
trading activities, may exchange such Series C Notes (other than Transfer
Restricted Securities acquired directly from the Company or any Affiliate of
the Company) pursuant to the Exchange Offer; however, such Broker-Dealer may
be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with its initial sale of each Series D Note received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may
be satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
<PAGE>
<PAGE>
section shall also contain all other information with respect to such sales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers that
the Commission may require in order to permit such sales pursuant thereto, but
such "Plan of Distribution" shall not be required to name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer,
except to the extent required by the Commission as a result of a change in
policy after the date of this Agreement.
The Company shall use its reasonable best efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers, and to ensure that such
Registration Statement conforms with the requirements of this Agreement, the
Act and the policies, rules and regulations of the Commission as announced
from time to time, for a period equal to the shorter of (A) one year from the
date on which the Exchange Offer is Consummated and (B) the date on which all
Transfer Restricted Securities acquired in the Exchange Offer by Restricted
Broker-Dealers have been sold to the public by such Restricted Broker-Dealers.
The Company shall provide sufficient copies of the latest version of
such Prospectus to such Restricted Broker-Dealers promptly upon request, and
in no event later than one day after such request, at any time during such
one-year period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file
an Exchange Offer Registration Statement with respect to the Series D Notes
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a)(i) below have been
complied with) or if (ii) any Holder of Transfer Restricted Securities shall
notify the Company within 20 Business Days following the Consummation of the
Exchange Offer that (A) such Holder was prohibited by law or Commission policy
from participating in the Exchange Offer or (B) such Holder may not resell the
Series D Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by
such Holder or (C) such Holder is a Broker-Dealer and holds Series C Notes
acquired directly from the Company or one of its affiliates, then the Company
shall (x) cause to be filed, on or prior to 30 days after the date on
which the Company determines that it is not required to file the Exchange
Offer Registration Statement pursuant to clause (i) above or 30 days after the
date on which the Company receives the notice specified in clause (ii) above,
a shelf registration statement pursuant to Rule 415 under the Act (which may
be an amendment to the Exchange Offer Registration Statement (in either event,
the "Shelf Registration Statement")), relating to all Transfer Restricted
Securities the Holders of which shall have provided the information required
pursuant to Section 4(b) hereof, and shall (y) use its reasonable best efforts
to cause such Shelf Registration Statement to become effective on or prior
to 150 days after the date on which the Company becomes obligated to file such
Shelf Registration Statement; provided that if the Company has not consummated
<PAGE>
<PAGE>
the Exchange Offer within 180 days of the Closing Date, then the Company will
file the Shelf Registration Statement with the Commission on or prior to the
181st date after the Closing Date. If, after the Company has filed an
Exchange Offer Registration Statement which satisfies the requirements of
Section 3(a) above, the Company is required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer shall not be
permitted under applicable law or Commission policy, then the filing
of the Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above. Such an event shall have no effect on the
requirements of clause (y) above. The Company shall use its reasonable best
efforts to keep the Shelf Registration Statement discussed in this Section
4(a) continuously effective, supplemented and amended as required by and
subject to the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for sales of Transfer Restricted
Securities by the Holders thereof entitled to the benefit of this Section
4(a), and to ensure that it conforms with the requirements of this Agreement,
the Act and the policies, rules and regulations of the Commission as announced
from time to time, for a period of at least two years (as extended pursuant to
Section 6(d)) following the Closing Date or such shorter period that will
terminate when all the Transfer Restricted Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or are eligible for sale under Rule 144(k) under the Act.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 20 days after receipt of a request
therefor, such information specified in Item 507 of Regulation S-K under the
Act for use in connection with any Shelf Registration Statement or Prospectus
or preliminary Prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to Liquidated Damages pursuant to Section
5 hereof unless and until such Holder shall have used its reasonable best
efforts to provide all such information. Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) the Company fails to file any Registration Statement required
by this Agreement with the Commission on or prior to the date specified for
such filing in this Agreement, (ii) any such Registration Statement has not
been declared effective by the Commission on or prior to the date specified
for such effectiveness in this Agreement, (iii) the Company fails to
Consummate the Exchange Offer within 30 Business Days after the Exchange Offer
Registration Statement is first declared effective by the Commission, (iv)
subject to the provisions of Section 6(c)(i) below, any Registration Statement
required by this Agreement is filed and declared effective but shall
thereafter cease to be effective for a period of one business day without
being succeeded immediately by a post-effective amendment to such Registration
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Statement that cures such failure and that is itself declared effective
immediately or (v) subject to the provisions of Section 6(c)(i) below, at any
time when a prospectus is required by the Act to be delivered in connection
with sales of the Transfer Restricted Securities, the Company shall conclude,
or the Holders of a majority in principal amount of the affected Transfer
Restricted Securities shall reasonably conclude, based on the advice of their
counsel, and shall give notice to the Company, that either (A) any event shall
have occurred or fact exist as a result of which it is necessary to amend or
supplement the prospectus in order that it will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading, or (B) it shall be necessary to amend or
supplement such Registration Statement or a Prospectus in order to comply with
the requirements of the Act or the rules of the Commission thereunder, and in
the case of clause (A) or (B), such Registration Statement is not
appropriately amended by an effective post-effective amendment, or the
Prospectus is not amended or supplemented, in a manner reasonably satisfactory
to the Holders of Transfer Restricted Securities so as to be declared
effective or made usable within one business day after the Company shall so
conclude or shall receive the above-mentioned notice from Holders of Transfer
Restricted Securities (each such event referred to in clauses (i) through (v),
a "Registration Default"), then the Company agrees to pay liquidated damages
to each Holder of Transfer Restricted Securities with respect to the first
90-day period immediately following the occurrence of such Registration
Default in an amount equal to $.05 per week per $1,000 principal amount of
Transfer Restricted Securities held by such Holder for each week or portion
thereof that the Registration Default continues. The amount of the liquidated
damages shall increase by an additional $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of liquidated damages of $.50 per week per $1,000 principal amount of
Transfer Restricted Securities. Notwithstanding anything to the contrary set
forth herein, (1) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of (i)
above, (2) upon the effectiveness of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of (ii)
above, (3) upon Consummation of the Exchange Offer, in the case of (iii)
above, (4) upon the filing of a post-effective amendment to the Registration
Statement, or an amendment or supplement to the Prospectus, or an additional
Registration Statement, in each case that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement) to again be declared effective or made usable in the case of (iv)
and (v) above, or (5) once the Transfer Restricted Securities are eligible for
resale under Rule 144(k) under the Act, the liquidated damages payable with
respect to the Transfer Restricted Securities as a result of such clause (i),
(ii), (iii), (iv) or (v), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holder of the
Global Note by wire transfer of immediately available funds or by federal
funds check and to Holders of Certificated Securities by mailing checks to
their registered addresses on each Damages Payment Date. All obligations of
the Company set forth in the preceding paragraph that are outstanding with
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respect to any Transfer Restricted Security at the time such security ceases
to be a Transfer Restricted Security shall survive until such time as all such
obligations with respect to such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all applicable provisions of
Section 6(c) below, shall use its reasonable best efforts to effect such
exchange and to permit the sale of Broker-Dealer Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following provisions:
(i) If, following the date hereof there has been published a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, such that in the reasonable opinion of counsel to the Company
there is a substantial question as to whether the Exchange Offer is permitted
by applicable federal law, the Company hereby agrees to seek a no-action
letter or other favorable decision from the Commission allowing the
Company to Consummate an Exchange Offer for such Series C Notes. The Company
hereby agrees to pursue the issuance of such a decision to the Commission
staff level, but shall not be required to take commercially unreasonable
action to effect a change of Commission policy. In connection with the
foregoing, the Company hereby agrees to take all such other actions as are
requested by the Commission or otherwise required in connection with the
issuance of such decision, including without limitation (A) participating in
telephonic conferences with the Commission, (B) delivering to the Commission
staff an analysis prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that such an Exchange
Offer should be permitted and (C) diligently pursuing a resolution (which need
not be favorable) by the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Series D Notes to be issued in the
Exchange Offer and (C) it is acquiring the Series D Notes in its ordinary
course of business. The Exchange Offer Registration Statement shall disclose
that any Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the Exchange
Offer (1) may not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in Morgan Stanley
and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to clause
(i) above), and (2) must comply with the registration and prospectus delivery
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requirements of the Act in connection with a secondary resale transaction and
that such a secondary resale transaction must be covered by an effective
registration statement containing the selling security holder information
required by Item 507 or 508, as applicable, of Regulation S-K if the resales
are of Series D Notes obtained by such Holder in exchange for Series C Notes
acquired by such Holder directly from the Company or an affiliate thereof.
(iii) If the Commission requests, prior to effectiveness of the
Exchange Offer Registration Statement, the Company shall provide a
supplemental letter to the Commission (A) stating that the Company is
registering the Exchange Offer in reliance on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13, 1988),
Morgan Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B) including a
representation that the Company has not entered into any arrangement or
understanding with any Person to distribute the Series D Notes to be received
in the Exchange Offer and that, to the best of the Company's information and
belief, each Holder participating in the Exchange Offer is acquiring the
Series D Notes in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the Series
D Notes received in the Exchange Offer and (C) any other undertaking or
representation required by the Commission as set forth in any no-action letter
obtained pursuant to clause (i) above.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof
(as indicated in the information furnished to the Company pursuant to Section
4(b) hereof), and pursuant thereto the Company will prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale
of the Transfer Restricted Securities in accordance with the intended method
or methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted Securities (including, without
limitation, any Exchange Offer Registration Statement and the related
Prospectus, to the extent that the same are required to be available to permit
sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers), the Company shall:
(i) use its reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this Agreement, as
applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by this
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Agreement, the Company shall give notice promptly to the underwriter(s), if
any, and selling Holders of the occurrence of such event and file promptly an
appropriate amendment to such Registration Statement, (1) in the case of
clause (A), correcting any such misstatement or omission, and (2) in the case
of clauses (A) and (B), use its reasonable best efforts to cause such
amendment to be declared effective and such Registration Statement and the
related Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter. Notwithstanding the foregoing, the Company may
suspend the offering and sales under the Exchange Offer Registration Statement
subsequent to the Consummation of the Exchange Offer or the Shelf Registration
Statement for up to 30 days in each year during which such Exchange Offer
Registration Statement is required to be effective and usable hereunder
subsequent to the Consummation of the Exchange Offer or such Shelf
Registration Statement is required to be effective and usable hereunder
(measured from the date of effectiveness of such Shelf Registration Statement
to successive anniversaries thereof) if (A) either (y)(I) the Company shall be
engaged in a material acquisition or disposition and (II)(aa) such acquisition
or disposition is required to be disclosed in the Exchange Offer Registration
Statement or the Shelf Registration Statement, the related Prospectus or any
amendment or supplement thereto, or the failure by the Company to disclose
such transaction in the Exchange Offer Registration Statement or the Shelf
Registration Statement or related Prospectus, or any amendment or supplement
thereto, as then amended or supplemented, would cause such Exchange Offer
Registration Statement or Shelf Registration Statement, Prospectus or
amendment or supplement thereto, to contain an untrue statement of material
fact or omit to state a material fact necessary in order to make the statement
therein not misleading, in light of the circumstances under which they were
made, (bb) information regarding the existence of such acquisition or
disposition has not then been publicly disclosed by or on behalf of the
Company and (cc) a majority of the Board of Directors of the Company
determines in the exercise of its good faith judgment that disclosure of such
acquisition or disposition would not be in the best interest of the Company or
would have a material adverse effect on the consummation of such acquisition
or disposition or (z) a majority of the Board of Directors of the Company
determines in the exercise of its good faith judgment that compliance with
the disclosure obligations set forth in this Section 6(c)(i) would otherwise
have a material adverse effect on the Company and its subsidiaries, taken as a
whole, and (B) the Company notifies the Holders within two business days after
such Board of Directors makes the relevant determination set forth in clause
(A); provided, however, that in each such case the applicable period specified
in Section 3 (subsequent to the Consummation of the Exchange Offer) and
Section 4 hereof during which the applicable Exchange Offer Registration
Statement or Shelf Registration Statement is required to be kept effective and
usable shall be extended by the number of days during which such effectiveness
was suspended pursuant to the foregoing and Liquidated Damages shall not apply
during any period the Company is permitted to suspend offerings and sales
under this sentence;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period set forth
in Section 3 or 4 hereof, or such shorter period as will terminate when all
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Transfer Restricted Securities covered by such Registration Statement have
been sold; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Act, and to comply fully with Rules 424, 430A and 462, as applicable, under
the Act in a timely manner; and comply with the provisions of the Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended method
or methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons, confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any Registration
Statement or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement
under the Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale in
any jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, and (D) of the existence of any fact or the happening of any event
that makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement in order to make the
statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company
shall use its reasonable best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
(iv) furnish to the Initial Purchaser, each selling Holder
named in any Registration Statement or Prospectus and each of the
underwriter(s) in connection with such sale, if any, before filing with the
Commission, copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders and underwriter(s) in
connection with such sale, if any, for a period of at least five Business
Days, and the Company will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration Statement
or Prospectus (including all such documents incorporated by reference) to
which the selling Holders of the Transfer Restricted Securities covered by
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such Registration Statement or the underwriter(s) in connection with such
sale, if any, shall reasonably object within five Business Days after the
receipt thereof;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, provide
copies of such document to the selling Holders and to the underwriter(s) in
connection with such sale, if any, make the Company's representatives
available for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the filing
thereof as such selling Holders or underwriter(s), if any, reasonably may
request;
(vi) make available at reasonable times for inspection by the
selling Holders, any managing underwriter participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such selling Holders or any of such underwriter(s), all financial
and other records, pertinent corporate documents and properties of the Company
and its subsidiaries cause the Company's and its subsidiaries' officers,
directors and employees to supply all information reasonably requested by any
such Holder, underwriter, attorney or accountant in connection with such
Registration Statement or any post-effective amendment thereto subsequent to
the filing thereof and prior to its effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s) in connection with such sale, if any, promptly include in any
Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities, information with respect
to the principal amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other terms of
the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company is notified
of the matters to be included in such Prospectus supplement or post-effective
amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s) in connection with such sale, if any, without charge, at least
one copy of the Registration Statement, as first filed with the Commission,
and of each amendment thereto, including all documents incorporated by
reference therein and all exhibits (including, at the request of such selling
Holder and such underwriter(s), exhibits incorporated therein by reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; the Company hereby consents to
the use (in accordance with law) of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
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underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
(x) enter into such agreements (including an underwriting
agreement) and make such representations and warranties and take all such
other actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any Registration
Statement contemplated by this Agreement as may be reasonably requested by any
Holder of Transfer Restricted Securities or underwriter in connection with any
sale or resale pursuant to any Registration Statement contemplated by this
Agreement, and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an Underwritten
Registration, the Company shall:
(A) furnish (or in the case of paragraphs (2) and (3), use its
reasonable best efforts to furnish) to each selling Holder, the Trustee under
the Indenture and each underwriter, if any, upon the effectiveness of the
Shelf Registration Statement and to each Restricted Broker-Dealer upon
Consummation of the Exchange Offer:
(1) a certificate, dated the date of Consummation of the Exchange
Offer or the date of effectiveness of the Shelf Registration Statement, as the
case may be, signed on behalf of the Company by (x) the President or any Vice
President and (y) a principal financial or accounting officer of the Company,
confirming, as of the date thereof, the matters set forth in paragraphs (a)
through (d) of Section 7 of the Purchase Agreement and such other similar
matters as the Holders, underwriter(s) and/or Restricted Broker Dealers may
reasonably request;
(2) an opinion, dated the date of Consummation of the Exchange
Offer or the date of effectiveness of the Shelf Registration Statement, as the
case may be, of counsel for the Company covering matters similar to those set
forth in paragraph (f) of Section 7 of the Purchase Agreement and such other
matter as the Holders, underwriters and/or Restricted Broker Dealers may
reasonably request, and in any event including a statement to the effect that
such counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company and has considered the matters required to be
stated therein and the statements contained therein, although such counsel has
not independently verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of the foregoing
(relying as to materiality to a large extent upon facts provided to such
counsel by officers and other representatives of the Company and without
independent check or verification), no facts came to such counsel's attention
that caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any post-effective
amendment thereto became effective and, in the case of the Exchange Offer
Registration Statement, as of the date of Consummation of the Exchange Offer,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
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statements therein not misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the opinion dated
the date of Consummation of the Exchange Offer, as of the date of
Consummation, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and expresses no opinion as to, the
accuracy, completeness or fairness of the financial statements, notes and
schedules and other financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement or the date of Consummation
of the Exchange Offer, as the case may be, from the Company's independent
accountants, in the customary form and covering matters of the type
customarily covered in comfort letters to underwriters in connection with
primary underwritten offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Section 7 of the Purchase Agreement,
without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, in connection with any sale or resale pursuant
to any Shelf Registration Statement the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be indemnified
pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by the selling Holders, the underwriter(s), if any, and
Restricted Broker Dealers, if any, to evidence compliance with clause (A)
above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company pursuant to this
clause (x).
The above shall be done at each closing under such underwriting or
similar agreement, as and to the extent required thereunder, and if at any
time the representations and warranties of the Company contemplated in (A)(1)
above cease to be true and correct, the Company shall so advise the
underwriter(s), if any, the selling Holders and each Restricted Broker-Dealer
promptly and if requested by such Persons, shall confirm such advice in
writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or underwriter(s),
if any, may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that the Company shall not be required to register or
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qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;
(xii) issue, upon the request of any Holder of Series C Notes
covered by any Shelf Registration Statement contemplated by this Agreement,
Series D Notes having an aggregate principal amount equal to the aggregate
principal amount of Series C Notes surrendered to the Company by such Holder
in exchange therefor or being sold by such Holder; such Series D Notes to be
registered in the name of such Holder or in the name of the purchaser(s) of
such Notes, as the case may be; in return, the Series C Notes held by such
Holder shall be surrendered to the Company for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and to register such Transfer Restricted
Securities in such denominations and such names as the Holders or the
underwriter(s), if any, may request at least two Business Days prior to such
sale of Transfer Restricted Securities;
(xiv) use its reasonable best efforts to cause the disposition
of the Transfer Restricted Securities covered by the Registration Statement to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or the
underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xi) above;
(xv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration Statement
or related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee under the
Indenture with printed certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with The Depository
Trust Company;
(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
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required to be retained in accordance with the rules and regulations of the
NASD, and use its reasonable best efforts to cause such Registration Statement
to become effective and approved by such governmental agencies or authorities
as may be necessary to enable the Holders selling Transfer Restricted
Securities to consummate the disposition of such Transfer Restricted
Securities;
(xviii) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule 158
under the Act);
(xix) use its reasonable best efforts to cause the Indenture
to be qualified under the TIA not later than the effective date of the first
Registration Statement required by this Agreement and, in connection
therewith, cooperate with the Trustee and the Holders of Notes to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute, and use its
reasonable best efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of Section 13
or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(i) or any notice from the Company of the existence of any fact of
the kind described in Sections 6(c)(iii)(B),(C)or (D) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant
to the applicable Registration Statement until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) hereof, or until it is advised in writing by the Company that the use
of the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (the
"Advice"). If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Transfer Restricted Securities that was current at the time of receipt
of either such notice. In the event the Company shall give any such notice,
the time period regarding the effectiveness of such Registration Statement set
forth in Section 3 or 4 hereof, as applicable, shall be extended by the number
of days during the period from and including the date of the giving of
such notice pursuant to Section 6(c)(i) or Sections 6(c)(iii)(B),(C) or (D)
hereof to and including the date when each selling Holder covered by such
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Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 6(c)(xv) hereof or shall have
received the Advice.
SECTION 7. REGISTRATION EXPENSES
All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a
Registration Statement becomes effective, including without limitation: (i)
all registration and filing fees and expenses (including filings made by the
Initial Purchaser or any Holder with the NASD (and, if applicable, the
reasonable fees and expenses of any "qualified independent underwriter" and
its counsel that may be required by the rules and regulations of the NASD));
(ii) all fees and expenses of compliance with federal securities and state
Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the Series D Notes to be issued in the Exchange
Offer and printing of Prospectuses), messenger and delivery services and
telephone; (iv) all fees and disbursements of counsel for the Company; (v) all
application and filing fees in connection with listing the Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance); and (vii) all
fees and reasonable out-of-pocket disbursements of the Trustee and the
Exchange Agent, including all fees and disbursements of counsel for the
Trustee and the Exchange Agent.
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company. The Company shall not be responsible for fees and
disbursements of counsel, accountants or any other advisors to the Initial
Purchaser or Holder, underwriting commissions and discounts, brokerage
commissions, agent fees (other than fees of the Exchange Agent as specified
above) and transfer taxes relating to any Registration Statement filed
pursuant to this Agreement.
SECTION 8. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each
Holder and (ii) each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) any Holder (any of
the persons referred to in this clause (ii) being hereinafter referred
to as a "controlling person") and (iii) the respective officers, directors,
partners, employees, representatives and agents of any Holder or any
controlling person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Holder"), to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities,
judgments, actions and expenses (including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or
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defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Holder) directly or indirectly
caused by, related to, based upon, arising out of or in connection with any
untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement, preliminary prospectus or Prospectus (or any
amendment or supplement thereto), or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by an untrue statement or omission
or alleged untrue statement or omission that is made in reliance upon and in
conformity with information relating to any of the Holders furnished in
writing to the Company by any of the Holders expressly for use therein.
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against
any of the Indemnified Holders with respect to which indemnity may be sought
against the Company, such Indemnified Holder (or the Indemnified Holder
controlled by such controlling person) shall promptly notify the Company in
writing (provided that the failure to give such notice shall not relieve the
Company of its obligations pursuant to this Agreement, except to the extent
the Company or any Subsidiary is materially prejudiced by such failure). In
case any such action or proceeding shall be brought or asserted against any of
the Indemnified Holders and such Indemnified Holder shall notify the Company
of the commencement thereof, the Company shall be entitled to participate
therein and, to the extent it shall wish, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Holder. Such Indemnified
Holder shall have the right to employ its own counsel in any such action
and the fees and expenses of such counsel shall be paid, as incurred, by such
Indemnified Holder, unless (i) the Company has failed promptly to assume the
defense and employ counsel reasonably satisfactory to such Indemnified Holder,
(ii) the Company has authorized the employment of counsel for the Indemnified
Holder at the expense of the Company, or (iii) the named parties to any such
action or proceeding (including any impleaded parties) include such
Indemnified Holder and the Company and such Indemnified Holder shall have been
advised by counsel that it has reasonably concluded that a conflict of
interest may exist between the Company and such Indemnified Holder in the
conduct of the defense of such action or proceeding. In the case of each of
clause (i), (ii), or (iii) above, the Company shall pay, as incurred, the fees
and expenses of such counsel, regardless of whether it is ultimately
determined that an Indemnified Holder is not entitled to indemnification
hereunder. The Company shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys (in addition to any local counsel)
at any time for such Indemnified Holders, which firm shall be designated by
the Holders of a majority in principal amount of Transfer Restricted
Securities involved in such action or proceeding. The Company shall be liable
for any settlement of any such action or proceeding effected with the
Company's prior written consent, which consent shall not be withheld
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unreasonably, and the Company agrees to indemnify and hold harmless each
Indemnified Holder from and against any loss, claim, damage, liability or
expense by reason of any settlement of any action effected with the written
consent of the Company. The Company shall not, without the prior written
consent of each Indemnified Holder, settle or compromise or consent to the
entry of judgment in or otherwise seek to terminate any pending or threatened
action, claim, litigation or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not any Indemnified Holder
is a party thereto), unless such settlement, compromise, consent or
termination includes an unconditional release of each Indemnified Holder from
all liability arising out of such action, claim, litigation or proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company, and its
respective directors, officers, and any person controlling (within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act) the Company, and
the respective officers, directors, partners, employees, representatives and
agents of each such person, to the same extent as the foregoing indemnity from
the Company to each of the Indemnified Holders, but only with respect to
claims and actions based on information relating to such Holder furnished in
writing by such Holder expressly for use in any Registration Statement.
In case any action or proceeding shall be brought against the Company or its
directors or officers or any such controlling person in respect of which
indemnity may be sought against a Holder of Transfer Restricted Securities,
such Holder shall have the rights and duties given the Company, and the
Company, such directors or officers or such controlling person shall have the
rights and duties given to each Holder by the preceding paragraph. In no
event shall any Holder be liable or responsible for any amount in excess of
the amount by which the total amount received by such Holder with respect to
its sale of Transfer Restricted Securities pursuant to a Registration
Statement exceeds the sum of (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof
(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or if such allocation is not permitted
by applicable law, the relative fault of the Company, on the one hand, and of
the Indemnified Holder, on the other hand, in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The
relative fault of the Company, on the one hand, and of the Indemnified Holder,
on the other hand, shall be determined by reference to, among other things,
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whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Indemnified Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and each Holder of Transfer Restricted Securities agree
that it would not be just and equitable if contribution pursuant to this
Section 8(c) were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Holder or its related Indemnified Holders shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of its Transfer
Restricted Securities pursuant to a Registration Statement exceeds the sum of
(A) the amount paid by such Holder for such Transfer Restricted Securities and
(B) the amount of any damages which such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute pursuant to this Section 8(c) are several
in proportion to the respective principal amount of Series C Notes held by
each of the Holders hereunder and not joint.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in
which the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act, to make available, upon request of any Holder of Transfer
Restricted Securities, to any Holder or beneficial owner of Transfer
Restricted Securities in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted Securities designated by such Holder or
beneficial owner, the information required by Rule 144A(d)(4) under the Act in
order to permit resales of such Transfer Restricted Securities pursuant to
Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements
entered into in connection therewith and (b) completes and executes all
reasonable questionnaires, powers of attorney, and other documents required
under the terms of such underwriting arrangements.
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SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment
bankers and manager or managers for any Underwritten Offering that will
administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering. Such investment bankers and managers are referred to herein
as the "underwriters."
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to
exercise all rights provided herein, in the Indenture, the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by them of the provisions of this
Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The Company has
not previously entered into any agreement granting any registration rights
pursuant to which the holders of such rights have the right to demand or
request that the Company register the securities held by them as a result of
the filing of any Registration Statement required to be filed hereunder. The
rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company will not take any
action, or voluntarily permit any change to occur, with respect to the Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case
of Section 5 hereof and this Section 12(d)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted Securities
and (ii) in the case of all other provisions hereof, the Company has obtained
the written consent of Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities. Notwithstanding the foregoing, a
waiver or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant
to such Exchange Offer may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities subject to such
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Exchange Offer. The Company will promptly furnish to the Trustee under the
Indenture a copy of any amendment, modification or supplement to this
Agreement.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier,
or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the Registrar
under the Indenture; and
(ii) if to the Company:
French Fragrances, Inc.
14100 N.W. 60th Avenue
Miami Lakes, Florida 33014
Telecopier No.: (305) 818-8020
Attention: Oscar E. Marina, Esq.
With a copy to:
Steel Hector & Davis LLP
200 South Biscayne Boulevard
Suite 4000
Miami, Florida 33131-2398
Telecopier No.: (305) 577-7001
Attention: Beatriz Llorens Koltis, Esq.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; PROVIDED,
HOWEVER, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities directly from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAWS RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred
to herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
FRENCH FRAGRANCES, INC.
By: /s/William J. Mueller
----------------------------
Title: Vice President - Operations,
Chief Financial Officer
and Treasurer
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/William J.R. Wilson
----------------------
Title: Vice President
FRENCH FRAGRANCES, INC.
14100 N.W. 60th Avenue
Miami, Florida 33014
FOR IMMEDIATE RELEASE:
FRENCH FRAGRANCES, INC. COMPLETES PRIVATE
PLACEMENT OF SENIOR NOTES
=============================================================================
MIAMI, FLORIDA (April 27, 1998) -- French Fragrances, Inc. (the "Company")
(NASDAQ NM: FRAG), a leading manufacturer and distributor of prestige
fragrances, today announced that it has completed the private placement under
Rule 144A pursuant to the Securities Act of 1933, as amended (the "Act"), of
$40 million principal amount of 10-3/8% Senior Notes due 2007 (the "Notes").
The Notes were sold at 106.5% of their principal amount and have substantially
similar terms to the Company's existing 10-3/8% Senior Notes due 2007 which
the Company issued in May 1997. The net proceeds of approximately $41.4
million from the sale of the Notes were used to repay outstanding borrowings
under the Company's revolving bank credit facility and $5 million of other
indebtedness to its bank lender, all of which were used for the March 1998
acquisition of certain assets of J.P. Fragrances, Inc., as well as for working
capital purposes.
The Notes have not be registered under the Act and may not be offered or sold
in the United States absent registration or an applicable exemption from
registration requirements. The Notes are expected to be exchanged for new
notes containing identical terms which will be registered under the Act. The
exchange offer will be made only by means of a prospectus.
Investor Contact: William J. Mueller
Chief Financial Officer
(305) 818-8102
Press Contact: Steven Anreder/Larry Hirschhorn
Anreder Hirschhorn & Silver
(212) 421-4020
