EXHIBIT 4.2
STATER BROS. HOLDINGS INC.
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FIRST SUPPLEMENTAL INDENTURE
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with respect to:
$165,000,000
11% Senior Notes Due 2001
Issued as of March 8, 1994
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IBJ SCHRODER BANK & TRUST COMPANY,
Trustee
FIRST SUPPLEMENTAL INDENTURE, dated as of July 22, 1997 (the "SUPPLEMENT")
between Stater Bros. Holdings Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "COMPANY"), having
its principal office at 21700 Barton Road, Colton, California 92324, and IBJ
Schroder Bank & Trust Company, a New York banking corporation, as trustee
(herein called the "TRUSTEE"), for the Company's 11% Senior Notes Due 2001 (the
"SECURITIES").
The Company has heretofore executed and delivered to the Trustee an
Indenture, dated as of March 8, 1994 (the "INDENTURE"), under which the
Securities in the aggregate principal amount of $165,000,000 were issued and are
outstanding.
In accordance with Section 9.02 of the Indenture, the Company has obtained
the written consent of the Holders of a majority in principal amount of the
Securities to certain amendments to such Indenture. The Company is authorized
to enter into this Supplement by a Board Resolution and simultaneously herewith
the Trustee has received an Opinion of Counsel and an Officers' Certificate in
accordance with Section 10.04 of the Indenture stating that the execution of
this Supplement is permitted by the Indenture and all conditions precedent under
the Indenture relating to the execution of this Supplement have been complied
with.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
SECTION 101. Section 1.01 of the Indenture is amended by adding the
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following definitions in alphabetical order:
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A. "New Notes" means the Company's $100.0 million New Notes due 2004.
B. "Qualified La Cadena Investment" means an Investment in the Company
by La Cadena for the purpose of providing funds to either the Company or
Stater Bros. Markets, as the case may be, to purchase additional limited
liability company interests in Santee LLC, provided, however, that if such
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investment is made in the form of Indebtedness, then such Indebtedness
shall be (a) unsecured Indebtedness, and (b) Subordinated Indebtedness.
C. "Qualified Non-Recourse Indebtedness" means Indebtedness of any Person
(i) as to which neither the Company nor any of its Subsidiaries (other than
any Unrestricted Subsidiary) (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise) or (c) constitutes the lender; and (ii) no default with respect
to which (including any right that the holders thereof may have to take
enforcement action against such Person) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any of
its Subsidiaries (other than any Unrestricted Subsidiary) to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or
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payable prior to its stated maturity; provided, however, that the Company
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or any Subsidiary may execute and become obligated under the Santee
Documents and perform its obligations thereunder, and such execution,
obligation and performance shall not disqualify the Indebtedness of Santee
or Santee LLC from constituting Qualified Non-Recourse Indebtedness.
D. "Revolving Credit Facility" means the Company's or any Subsidiary's
revolving credit facilities or any replacement facilities with respect
thereto.
E. "Santee" means Santee Dairies, Inc., a California corporation.
F. "Santee LLC" means Santee Dairies, LLC, a Delaware limited liability
company.
G. "Santee Documents" means that certain Product Purchase Agreement
between Stater Bros. Markets and Santee, that certain Owner Consent between
Stater Bros. Markets and the trustee pursuant to the trust agreement
executed as part of the Santee Financing, that certain Limited Liability
Company Agreement between Stater Bros. Markets, Hughes Markets, Inc., and
Santee, LLC and all documents effecting and ancillary to the Santee
Financing.
H. "Santee Financing" means the issuance by Santee of up to $80.0 million
in principal amount of notes with respect to the construction of a new
dairy in the City of Industry, California, and all transactions incident
and ancillary thereto.
I. "Santee Noteholders" means the purchasers of notes with respect to the
Santee Financing.
J. "Subordinated Indebtedness" means any Indebtedness of the Company or
any of its Subsidiaries (whether outstanding on the date of the Indenture
or thereafter incurred) that (i) matures no earlier than the date that is
one year after the maturity date of the Notes and (ii) is subordinated with
respect to payment of principal and interest to the payment of principal
and interest on the Notes (whether upon dissolution, liquidation, or
reorganization of the Company or any such Subsidiary, or otherwise).
K. "Unrestricted Subsidiary" means, to the extent such Persons become
Subsidiaries, (i) Santee LLC, (ii) Santee, and (iii) any subsidiary of an
Unrestricted Subsidiary; provided, however, that any Unrestricted
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Subsidiary that incurs Indebtedness other than Qualified Non-Recourse
Indebtedness shall no longer be deemed an Unrestricted Subsidiary, for so
long as such Indebtedness not constituting Qualified Non-Recourse
Indebtedness shall be outstanding; provided, further, that at such time as
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any Unrestricted Subsidiary ceases to be an Unrestricted Subsidiary, all
Indebtedness of such Subsidiary shall be deemed to have been incurred by
the Company and such Subsidiary for the purposes hereof.
SECTION 102. Section 1.01 of the Indenture is amended by deleting the
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definition of "Consolidated Stockholders' Equity" therefrom in its entirety and
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replacing such definition with the following:
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"Consolidated Stockholders' Equity" as of any date means with respect
to any Person the amount by which the assets of such Person and its
Consolidated Subsidiaries exceed (a) the total liabilities of such Person
and its Consolidated Subsidiaries, plus (b) any redeemable Preferred Stock
(including Disqualified Capital Stock) of such Person or any Preferred
Stock of any Consolidated Subsidiary of such Person issued to any Person
other than such Person or
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a Wholly Owned Subsidiary of such Person, in each case determined in
accordance with GAAP.
SECTION 103. Section 1.01 of the Indenture is amended by deleting the
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definition of "Consolidated Subsidiary" therefrom in its entirety and replacing
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such definition with the following:
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"Consolidated Subsidiary" of any Person means a Subsidiary which for
financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such Person as a consolidated subsidiary; provided,
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however, that the Unrestricted Subsidiaries of any Person shall not be
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included as Consolidated Subsidiaries of such Person for purposes of this
Indenture, regardless of whether such Unrestricted Subsidiaries are or, in
accordance with GAAP, should be, accounted for as consolidated
subsidiaries; provided, further, that any Person that is not a subsidiary
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of a Person shall not be included as a Consolidated Subsidiary of such
Person for purposes of the Indenture, regardless of whether such Person is,
or in accordance with GAAP, should be, accounted for as a consolidated
subsidiary.
SECTION 104. Section 1.01 of the Indenture is amended by adding the
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following sentence to the end of the definition of "Indebtedness" therein:
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"For the avoidance of doubt, the Santee Financing and the Santee
Documents shall be deemed not to constitute, nor to have given rise to, the
incurrence of any Indebtedness of the Company or any of its Subsidiaries."
SECTION 105. Section 1.01 of the Indenture is amended by deleting the
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definition of "Person" therefrom in its entirety and replacing such definition
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with the following:
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"Person" means any individual, corporation, partnership, joint
venture, trust, estate, limited liability company, unincorporated
organization or government or any agency or political subdivision thereof.
SECTION 106. Section 1.01 of the Indenture is amended by deleting the
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definition of "Restricted Payments" therefrom in its entirety and replacing such
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definition with the following:
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"Restricted Payment" means (i) the declaration or payment of any
dividend or the making of any other distribution or other payment (whether
in cash, securities or other property or assets of the Company or of any
Subsidiary) of the Company's or any Subsidiary's Capital Stock, or to the
holders of the Company's or any Subsidiary's Capital Stock or to any
Affiliate of the Company, whether outstanding on the Issue Date or
thereafter (other than dividends or distributions payable solely in
Qualified Capital Stock of the Company, dividends or distributions declared
or paid by any Subsidiary to the Company); (ii) any purchase, redemption,
retirement or other acquisition for value of any Capital Stock of the
Company or of any Subsidiary or of any Affiliate of the Company, whether
outstanding on the Issue Date or thereafter, or any warrants, rights or
options to purchase or acquire shares of the Capital Stock of the Company
or of any Subsidiary or of any Affiliate of the Company, whether
outstanding on the Issue Date or thereafter, held by any Person other than
the Company or one of its Wholly Owned Subsidiaries (other than through the
issuance in exchange therefor solely of Qualified Capital Stock); (iii) the
prepayment, acquisition, decrease or retirement prior to maturity,
scheduled repayment or scheduled sinking fund payment of any Indebtedness
of the Company that is subordinated (whether pursuant to its terms,
structurally or by operation of law) to the Notes or (iv) to incur, create,
assume or suffer to exist any guarantee of
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Indebtedness of, or make any loan or advancement to, or other Investment
in, any Related Person of the Company (other than a Wholly Owned Subsidiary
(other than an Unrestricted Subsidiary)). The dollar amount of any non-cash
dividend or distribution by the Company or any Subsidiary on the Company's,
any Subsidiary's or any of the Company's Affiliate's Capital Stock shall be
equal to the Fair Market Value of such dividend or distribution at the time
of such dividend or distribution. Notwithstanding the foregoing, provided
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that no Default or Event of Default shall have occurred and be continuing
or would result as a consequence thereof, the following shall not be or be
deemed to be Restricted Payments: (a) the repayment upon the consummation
of an Asset Sale of any Indebtedness of the Company permitted by Section
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4.12 which is subordinated (whether pursuant to its terms or by operation
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of law) to the Notes and which is secured by a Lien permitted by Section
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4.14 to the extent that such Indebtedness is required to be repaid in
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connection with such Asset Sale pursuant to the terms of the instrument
governing such Indebtedness and such Lien, provided that concurrent or
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prior repayment of the Notes is provided for with the proceeds of such
Asset Sale if the Notes are secured by a Lien pari passu with or senior to
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the Lien of such Indebtedness, or (b) the prepayment, acquisition,
retirement or decrease of Indebtedness of the Company that is subordinated
(whether pursuant to its terms or by operation of law) to the Notes that is
prepaid, acquired, decreased or retired by conversion into or in exchange
for Qualified Capital Stock.
SECTION 107. Section 4.05 of the Indenture is amended by deleting such
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Section therefrom in its entirety and replacing such Section with the following:
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Section 4.05 Limitations on Restricted Payments and Investments.
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(a) The Company will not, and will not permit or cause any of the
Subsidiaries (other than any Unrestricted Subsidiary), directly or
indirectly, to, make any Restricted Payment or Investment after the Issue
Date unless, at the time of such proposed Restricted Payment or Investment,
and on a pro forma basis immediately after giving effect thereto:
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(A) no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(B) the aggregate amount expended for all Restricted Payments and
Investments subsequent to June 30, 1997 would not exceed the sum of:
(1) 50% of the aggregate Consolidated Net Income of the
Company (or if such Consolidated Net Income is a loss, minus 100%
of such loss) earned on a cumulative basis during the period
beginning on June 30, 1997 and ending on the last date of the
Company's fiscal quarter immediately preceding such proposed
Restricted Payment or Investment; plus
(2) 100% of the aggregate Net Equity Proceeds received by
the Company from any Person (other than a Subsidiary) from the
issuance and sale subsequent to June 30, 1997 of Qualified
Capital Stock (excluding (x) any Qualified Capital Stock paid as
a dividend on any Capital Stock of the Company or of any
Subsidiary or as interest on any Indebtedness of the Company or
of any Subsidiary, (y) the issuance of Qualified Capital Stock
upon the conversion of, or in exchange for, any Capital Stock of
the Company or of any Subsidiary and (z) any Qualified Capital
Stock of the Company with respect to which the purchase price
thereof has been financed directly or
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indirectly using funds (i) borrowed from the Company or any
Subsidiary, unless and until and to the extent such borrowing is
repaid, or (ii) contributed, extended, guaranteed or advanced by
the Company or any Subsidiary (including, without limitation, in
respect of any employee stock ownership or benefit plan)); plus
(3) $5.0 million; and
(C) the Company shall be able to incur (assuming a market rate of
interest with respect thereto) at least $1.00 of additional
Indebtedness under Section 4.12(a).
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(b) Section 4.05(a) shall not prevent (a) the payment of any
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dividend within 60 days after the date of its declaration if at such date
of declaration the payment of such dividend would comply with the
provisions set forth above, provided that such dividend will be deemed to
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have been paid as of its date of declaration for the purposes of this
Section 4.05, (b) if no Default or Event of Default shall have occurred and
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be continuing or would occur as a consequence thereof, the purchase,
redemption, retirement or acquisition of any shares of Capital Stock of the
Company or of any Subsidiary or any Indebtedness of the Company that is
pari passu with or subordinated to the Notes solely with or out of the net
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cash proceeds of the substantially concurrent sale (other than to a
Subsidiary or by a Subsidiary to one of its subsidiaries) of shares of
Qualified Capital Stock of the Company or of a Subsidiary and neither such
purchase, redemption, retirement or acquisition nor the proceeds of any
such sale will be included in any computation made under clause (B)(2)
above, (c) payments pursuant to usual and customary indemnification
arrangements for directors and officers of the Company, any Subsidiary,
Santee LLC or Santee, (d) payment to Craig of up to $69,365,000 plus
accrued and unpaid dividends from the proceeds of the sale of the New Notes
to repurchase the outstanding Series B Preferred Stock, (e) the making of
Permitted Investments, (f) the making of Investments in any Subsidiary
(other than any Unrestricted Subsidiary)(including any Person who becomes a
Subsidiary as a result of any Investment, other than any Unrestricted
Subsidiary) by the Company or any other Subsidiary, provided that any
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Indebtedness evidencing such Investment is not subordinated to any
Indebtedness or other obligation of such Subsidiary, (g) the making of
Investments in the Company by any Subsidiary provided that any Indebtedness
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evidencing such Investment is subordinated and junior to the Notes), (h)
the making of Investments of the type described in Section 4.20(b)(i), (ii)
and (iii), (i) the making of Investments in any Person, provided that the
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consideration paid by the Company or a Subsidiary for such Investment
consists solely of Qualified Capital Stock, (j) payment to Texas Eastern of
dividends on the Markets Preferred Stock as in effect on the Issue Date,
(k) the making of Investments in Santee, LLC of up to $25.0 million; (l)
the making of Investments in Santee, LLC for the purpose of purchasing
additional limited liability company interests in Santee LLC with the
proceeds of a Qualified La Cadena Investment, and (m) the payment to La
Cadena of an amount equal to the lesser of the amount of (i) the sum of (X)
any Qualified La Cadena Investment, plus (Y) an amount equal to a
commercially reasonable rate of interest on such Qualified La Cadena
Investment to the extent that the net proceeds received by Stater Bros.
Markets from the sale or disposition of that portion of Stater Bros.
Markets' interest in Santee LLC which was acquired with the proceeds from
such Qualified La Cadena Investment exceeds the original amount of the
Qualified La Cadena Investment; and (ii) net proceeds received by Stater
Bros. Markets from the sale or disposition of that portion of Stater Bros.
Markets' interest in Santee LLC which was acquired with the proceeds from
such Qualified La Cadena Investment and (n) the payment of a financial
advisory fee of up to $2.0 million to La Cadena substantially
contemporaneously with the effective date of the First Supplemental
Indenture to this Indenture; provided that in each such
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case of clauses (f) through (j) above, no Default or Event of Default has
occurred and is continuing or would result therefrom. The amounts expended
or received, as applicable, pursuant to clause (a) will be included, and
clauses (b) through (n) will be excluded, in computing the amounts
available for Restricted Payments and Investments for purposes of the
immediately preceding paragraph.
(c) For purposes of this Section 4.05, a distribution to holders
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of the Company's Capital Stock of (i) shares of Capital Stock of any
Subsidiary or (ii) other assets of the Company, without, in either case,
the receipt of equivalent consideration therefor shall be deemed to be the
equivalent of a cash dividend equal to the excess of the Fair Market Value
of the shares or other assets being so distributed at the time of such
distribution over the consideration, if any, received therefor.
SECTION 108. Section 4.12 of the Indenture is amended by deleting the such
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Section therefrom in its entirety and replacing such Section with the following:
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Section 4.12 Limitation on Indebtedness.
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(a) The Company will not, and will not permit any of its Subsidiaries
(other than any Unrestricted Subsidiaries), directly or indirectly, to
incur any Indebtedness, provided that if no Default or Event of Default
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shall have occurred and be continuing at the time or as a consequence of
the incurrence of such Indebtedness, the Company may incur Indebtedness if,
on the date of the incurrence of such Indebtedness after giving pro forma
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effect to the incurrence of such Indebtedness, the Consolidated Fixed
Charge Coverage Ratio of the Company is at least 2.0 to 1.
(b) The limitations set forth in Section 4.12(a) shall not apply to:
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(i) Indebtedness under a revolving credit facility or any replacement
facility thereof, provided that Indebtedness under such credit facility or
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any replacement facility, including unused commitments, shall not at any
time exceed the greater of (a) $15.0 million or (b) 15% of the Company's
Consolidated Inventory, in aggregate outstanding principal amount; (ii)
Indebtedness of the Company and its Subsidiaries existing on the Issue
Date; (iii) Indebtedness of the Company represented by the Notes and the
New Notes; (iv) Indebtedness of the Company and its Subsidiaries incurred
in exchange for or the net proceeds of which are used to extend, refinance,
renew, replace, substitute or refund ("Refinance") Indebtedness referred to
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in clauses (i), (ii) and (iii) above and (ix) below (the "Refinancing
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Indebtedness") plus any penalties, fees or premiums incurred in connection
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therewith; provided that (A) the principal amount of such Refinancing
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Indebtedness shall not exceed the principal amount of the Indebtedness
(including unused commitments) so Refinanced (the "Existing Debt") as of
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the date of the proposed incurrence of the Refinancing Indebtedness, (B)
such Refinancing Indebtedness shall have an Average Life equal to or
greater than the Average Life of the Existing Debt, (C) if the Existing
Debt (including the Notes) being Refinanced is pari passu with or
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subordinated to the Notes then such Refinancing Indebtedness shall be pari
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passu with or at least as subordinated to, as the case may be, the Notes,
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(D) the Refinancing Indebtedness has a stated maturity date no earlier than
the Existing Debt as of the date of such proposed Refinancing and (E) if
the Existing Debt is Indebtedness solely of the Company, such Refinancing
Indebtedness will only be permitted if it is Indebtedness solely of the
Company; (v) Permitted Construction Indebtedness incurred after March 8,
1994 not to exceed $10.0 million in the aggregate at any time outstanding
and designated as Permitted Construction Indebtedness subject to this
clause (v) in an Officer's Certificate delivered to the Trustee; (vi)
Indebtedness of the Company to a Wholly Owned Subsidiary of the Company or
by a Wholly Owned Subsidiary of the
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Company to the Company or between Wholly Owned Subsidiaries of the Company;
(vii) Indebtedness under Interest Rate Protection Agreements entered into
in the ordinary course of business; (viii) Indebtedness arising from
agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guarantees of letters of credit, surety bonds
or performance bonds securing any obligations of the Company pursuant to
such agreements, incurred or assumed in connection with the disposition of
any business, assets or Subsidiary of the Company, other than guarantees or
similar credit support by the Company of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or Subsidiary
for the purpose of financing such acquisition; provided that the maximum
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aggregate liability in respect of all such Indebtedness described in this
clause shall not exceed the net proceeds actually received in connection
with any such disposition; (ix) Indebtedness to secure workers'
compensation and other insurance coverages, not to exceed the minimum
amount required by the Company's insurance carriers or other applicable
regulatory agencies; and (x) Indebtedness to La Cadena incurred by the
Company in connection with a Qualified La Cadena Investment; provided,
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however, that the repayment of principal with respect to, and the payment
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of interest with respect to, any such Qualified La Cadena Investment
constituting Indebtedness shall be subject to Section 4.05.
SECTION 109. Section 4.13 of the Indenture is amended by deleting such
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Section therefrom in its entirety and replacing such Section with the following:
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[Intentionally Omitted]
SECTION 110. Section 4.14 of the Indenture is amended by deleting such
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Section therefrom in its entirety and replacing such Section with the following:
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Section 4.14 Limitations on Liens.
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The Company will not, and will not permit any of its Subsidiaries
(other than any Unrestricted Subsidiary) to, create, incur, assume or
suffer to exist any Liens securing Indebtedness, except for (a) any Liens
which may be granted to secure the Notes; (b) Liens securing Indebtedness
that is incurred pursuant to clause (i) of Section 4.12(b); (c) Liens
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securing Indebtedness that is incurred in accordance with this Indenture
and that is pari passu with the Notes; provided that the Notes are secured
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on an equal and ratable basis to such Liens; (d) Liens securing
Indebtedness incurred in accordance with this Indenture and that is
subordinated to the Notes; provided that the Notes are secured by Liens
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ranking prior to such Liens; (e) Liens in respect of Refinancing
Indebtedness; provided that the terms of such Liens in respect of such
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Refinancing Indebtedness are not less favorable to the Holders than terms
of the Liens securing the Existing Debt being Refinanced and do not extend
to or cover any property or assets of the Company or of any of the
Subsidiaries not securing such Existing Debt; (f) Liens in respect of
Acquired Indebtedness permitted to be incurred in accordance with this
Indenture; provided that such Liens in respect of such Acquired
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Indebtedness do not extend to or cover any property or assets of the
Company or any Subsidiary other than the property or assets that secured
the Acquired Indebtedness prior to the time such Indebtedness became
Acquired Indebtedness of the Company or such Subsidiary; (g) Liens securing
Indebtedness of the Company or a Subsidiary, which Indebtedness shall not
exceed $15.0 million; and (h) Permitted Liens.
SECTION 111. Section 4.15 of the Indenture is amended by deleting such
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Section therefrom in its entirety and replacing such Section with the following:
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Section 4.15 Limitation on Payment Restrictions Affecting Subsidiaries.
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The Company will not, and will not permit any of its Subsidiaries
(other than any Unrestricted Subsidiary), directly or indirectly, to create
or suffer to exist or allow to become effective any encumbrance or
restriction of any kind (i) on the ability of any Subsidiary (other than
any Unrestricted Subsidiary) to (a) pay dividends, in cash or otherwise, or
make other payments or distributions on its Capital Stock or any other
equity interest or participation in, or measured by, its profits, owned by
the Company or any Subsidiary or any of their respective subsidiaries, or
make payments on any Indebtedness owed to the Company or any Subsidiary or
any of their respective subsidiaries, (b) make loans or advances to the
Company or any of its Subsidiaries, (c) transfer any of their respective
property to the Company or any of its Subsidiaries or (ii) on the ability
of the Company or any of its Subsidiaries (other than an Unrestricted
Subsidiary) to receive or retain any such (x) dividends, payments or
distributions, (y) loans or advances or (z) transfer of property (any such
restriction being referred to herein as a "Payment Restriction"), except
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for such encumbrances or restrictions existing under or by reason of (A)
agreements in effect as of the Issue Date, (B) applicable laws, (C) this
Indenture or the Indenture governing the New Notes, (D) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Company or any of the Subsidiaries, (E) Acquired
Indebtedness incurred in accordance with this Indenture; provided that such
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encumbrance or restriction in respect of such Acquired Indebtedness is not
applicable to any Person, or the property of any Person, other than the
Person, or the property of the Person, so acquired whether or not such
Acquired Indebtedness was incurred in connection with or anticipation of
such acquisition, (F) the Revolving Credit Facility or (G) any agreement
effecting a renewal, refunding, refinancing or extension of Indebtedness
referred to in clause (A), (E) or (F) above; provided that the provisions
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contained in such renewal, refunding, refinancing or extension relating to
such encumbrance or restriction are no more restrictive in any material
respect than the provisions contained in the agreement that is the subject
thereof.
SECTION 112. Section 4.16 of the Indenture is amended by deleting such
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Section therefrom in its entirety and replacing such Section with the following:
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Section 4.16 Limitation on Issuance and Sale of Capital Stock of
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Subsidiaries.
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The Company will not permit any Subsidiary (other than any
Unrestricted Subsidiary) to issue any shares of its Capital Stock to any
Person other than the Company or one or more of its Wholly Owned
Subsidiaries (other than any Unrestricted Subsidiary) nor will the Company
permit any Person (other than the Company or one or more of its Wholly
Owned Subsidiaries (other than any Unrestricted Subsidiary) to own or hold
any such Capital Stock, other than the Markets Preferred Stock held by
Texas Eastern Corporation as of the Issue Date. The Company will not and
will not permit any Subsidiary (other than any Unrestricted Subsidiary) to
transfer, sell or otherwise dispose of any Capital Stock of any Subsidiary
to any Person (other than to the Company or a Wholly Owned Subsidiary that
is not an Unrestricted Subsidiary) unless (i) such transfer, sale or other
disposition is of all the Capital Stock of such Subsidiary owned by the
Company or any Subsidiary and (ii) the Net Cash Proceeds from such
transfer, sale or other disposition are applied in accordance with Section
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4.20.
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SECTION 113. Section 4.17 of the Indenture is amended by deleting such
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Section therefrom in its entirety and replacing such Section with the following:
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Section 4.17 Limitations on Transactions with Related Persons.
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The Company will not, nor will it permit any of its Subsidiaries (other
than an Unrestricted Subsidiary) to (a) sell, lease, transfer or otherwise
dispose of any of its property to, (b) purchase any property from, (c) make
any Investment in or (d) enter into or amend any contract, agreement or
understanding with or for the benefit of, a Related Person of the Company
or any Subsidiary (other than the Company or any such Subsidiary (other
than any Unrestricted Subsidiary) in which no Related Person (other than
the Company or a Wholly Owned Subsidiary (other than any Unrestricted
Subsidiary) of the Company) owns, directly or indirectly, an equity
interest) (each a "Related Person Transaction"), other than (i) Related
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Person Transactions that are on terms (which terms are in writing) that are
fair and reasonable to the Company or the Subsidiary and that are no less
favorable to the Company or such Subsidiary than those that could be
obtained in a comparable arm's length transaction by the Company or such
Subsidiary from an unrelated party as determined reasonably and in good
faith by the Board of Directors of the Company; provided that if the
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Company or any Subsidiary enters into a Related Person Transaction or
series of Related Person Transactions involving or having an aggregate
value of more than $1.0 million such Related Person Transaction shall,
prior to the consummation thereof, have been approved by a majority of the
independent directors of the Company. The restrictions of this Section
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4.17 shall not apply to (a) any transactions between Wholly Owned
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Subsidiaries (other than any Unrestricted Subsidiary) of the Company, or
between the Company and any Wholly Owned Subsidiary (other than any
Unrestricted Subsidiary) of the Company, if such transaction is not
otherwise prohibited by this Indenture, (b) any payments or purchases
permitted by Section 4.05, (c) any reasonable and customary regular fees to
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directors of the Company, (d) any transactions contemplated by the Santee
Documents; provided that such transactions are not otherwise prohibited by
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this Indenture and (e) payment of a financial advisory fee of up to $2.0
million to La Cadena substantially contemporaneously with the execution of
the First Supplemental Indenture to this Indenture.
ARTICLE TWO
SECTION 201. Effective Date of This Supplement.
---------------------------------
This Supplement shall be effective as of the date first written above, at
and after such time as the Company has delivered to the Trustee evidence of
consent from the Holders of at least a majority in principal amount of the
Securities under the Indenture then outstanding; provided that the consent
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payment (as provided for in the consent solicitation statement with respect to
this Supplement) has been made to each consenting Holder by the date that is 90
days after the execution of this Supplement.
SECTION 202. Indenture Ratified.
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Except as hereby otherwise expressly provided, the Indenture is in all
respects ratified and confirmed, and all the terms, provisions and conditions
thereof shall be and remain in full force and effect.
SECTION 203. Counterparts.
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This Supplement may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
SECTION 204. Trustee Not Responsible.
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The recitals contained herein shall be taken as the statements of the
Company and the Trustee assumes no responsibility for their correctness.
SECTION 205. Definitions and Terms.
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Unless otherwise defined herein, all initially capitalized terms used
herein shall have the meanings assigned to such terms in the Indenture.
SECTION 206. Supplemental Indenture is an Indenture.
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This Supplement is an amendment to and implementation of the Indenture, and
the Indenture and this Supplement shall be read together from and after the
effectiveness of this Supplement.
SECTION 207. Governing Law.
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This Supplement shall be governed by and construed in accordance with the
internal laws of the State of New York.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
STATER BROS. HOLDING INC.
BY: /s/ Jack H. Brown
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Name: Jack H. Brown
Title: Chairman, President & CEO
Attest: /s/ Bruce D. Varner
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Name: Bruce D. Varner
Title: Secretary
IBJ SCHRODER BANK & TRUST COMPANY, AS TRUSTEE
By: /s/ Luis Perez
---------------------------------
Name: Luis Perez
Title: ASST. VICE PRESIDENT
Attest: /s/ Barbara McCluskey
-------------------------
Name: Barbara McCluskey
Title: Assistant Secretary
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