Exhibit 4.1
SHOPPERS FOOD WAREHOUSE CORP.
9 3/4% Senior Notes due 2004
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INDENTURE
Dated as of June 26, 1997
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SFW HOLDING CORP.
Guarantor
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
TABLE OF CONTENTS
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Page
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE...............................................1
Section 1.1. Definitions..............................................................1
Section 1.2. Other Definitions.......................................................14
Section 1.3. Incorporation by Reference of Trust Indenture Act.......................15
Section 1.4. Rules of Construction...................................................15
ARTICLE 2. THE SECURITIES..........................................................................16
Section 2.1. Form and Dating.........................................................16
Section 2.2. Execution and Authentication............................................17
Section 2.3. Registrar and Paying Agent..............................................17
Section 2.4. Paying Agent to Hold Money in Trust.....................................18
Section 2.5. Holder Lists............................................................18
Section 2.6. Transfer and Exchange...................................................19
Section 2.7. Replacement Securities..................................................19
Section 2.8. Outstanding Securities..................................................20
Section 2.9. Treasury Securities.....................................................20
Section 2.10. Temporary Securities....................................................21
Section 2.11. Cancellation............................................................21
Section 2.12. Defaulted Interest......................................................21
Section 2.13. Deposit of Moneys.......................................................22
Section 2.14. CUSIP Number............................................................22
Section 2.15. Restrictive Legends.....................................................22
Section 2.16. Book-Entry Provisions for Global Security...............................24
Section 2.17. Special Transfer Provisions.............................................26
ARTICLE 3. REDEMPTION..............................................................................27
Section 3.1. Rights of Redemption....................................................27
Section 3.2. Notices to Trustee......................................................29
Section 3.3. Selection of Securities to be Redeemed..................................29
Section 3.4. Notice of Redemption....................................................29
Section 3.5. Effect of Notice of Redemption..........................................30
Section 3.6. Deposit of Redemption Price.............................................30
Section 3.7. Securities Redeemed in Part.............................................30
ARTICLE 4. COVENANTS...............................................................................30
Section 4.1. Payment of Securities...................................................30
Section 4.2. SEC Reports.............................................................31
Section 4.3. Compliance Certificate..................................................31
Section 4.4. Stay, Extension and Usury Laws..........................................32
Section 4.5. Limitation on Restricted Payments.......................................33
Section 4.6. Continued Existence.....................................................34
Section 4.7. Limitation on Indebtedness..............................................35
Section 4.8. Taxes...................................................................36
Section 4.9. Repurchase at Holder's Option upon Change in Control....................36
Section 4.10. Limitation on Transactions with Affiliates..............................39
Section 4.11. Limitation on Lines of Business.........................................40
Section 4.12. Dividends and Other Payment Restrictions Affecting Subsidiaries.........40
Section 4.13. Further Assurance to the Trustee........................................40
Section 4.14. Limitation on Investments, Loans and Advances...........................40
Section 4.15. Limitation on Liens.....................................................41
Section 4.16. Maintenance of Office or Agency.........................................42
Section 4.17. Tax Sharing Agreement...................................................42
Section 4.18. Management Services Agreement...........................................42
Section 4.19. Limitation on Asset Sales...............................................42
Section 4.20. Limitation on Issuance and Sale of Capital Stock
of Restricted Subsidiaries..............................................45
Section 4.21. Merger of Significant Subsidiaries......................................45
ARTICLE 5. SUCCESSORS..............................................................................45
Section 5.1. When Company May Merge, etc.............................................45
Section 5.2. Successor Corporation Substituted.......................................46
ARTICLE 6. DEFAULTS AND REMEDIES...................................................................47
Section 6.1. Events of Default.......................................................47
Section 6.2. Acceleration............................................................48
Section 6.3. Other Remedies..........................................................49
Section 6.4. Waiver of Existing and Past Defaults....................................49
Section 6.5. Control by Majority.....................................................49
Section 6.6. Limitation on Suits.....................................................49
Section 6.7. Rights of Holders to Receive Payment....................................50
Section 6.8. Collection Suit by Trustee..............................................50
Section 6.9. Trustee May File Proofs of Claim........................................50
Section 6.10. Priorities..............................................................51
Section 6.11. Undertaking for Costs...................................................51
Section 6.12. Rights and Remedies Cumulative..........................................51
Section 6.13. Delay or Omission Not Waiver............................................52
ARTICLE 7. TRUSTEE.................................................................................52
Section 7.1. Duties of Trustee.......................................................52
Section 7.2. Rights of Trustee.......................................................53
Section 7.3. Individual Rights of Trustee............................................54
Section 7.4. Trustee's Disclaimer....................................................54
Section 7.5. Notice of Defaults......................................................54
ii
Section 7.6. Reports by Trustee to Holders...........................................55
Section 7.7. Compensation and Indemnity..............................................55
Section 7.8. Replacement of Trustee..................................................56
Section 7.9. Successor Trustee by Merger, etc........................................57
Section 7.10. Eligibility; Disqualification...........................................57
Section 7.11. Preferential Collection of Claims Against Company.......................57
ARTICLE 8. DISCHARGE OF INDENTURE..................................................................57
Section 8.1. Termination of Company's Obligations....................................57
Section 8.2. Legal Defeasance and Covenant Defeasance................................58
Section 8.3. Application of Trust Money..............................................62
Section 8.4. Repayment to Company....................................................62
Section 8.5. Reinstatement...........................................................62
ARTICLE 9. AMENDMENTS..............................................................................63
Section 9.1. Without Consent of Holders..............................................63
Section 9.2. With Consent of Holders.................................................64
Section 9.3. Compliance with Trust Indenture Act.....................................65
Section 9.4. Revocation and Effect of Consents.......................................65
Section 9.5. Notation on or Exchange of Securities...................................65
Section 9.6. Trustee Protected.......................................................66
ARTICLE 10. GUARANTEE..............................................................................66
Section 10.1. Guarantee...............................................................66
Section 10.2. Limitation on Liability.................................................68
Section 10.3. Successors and Assigns..................................................68
Section 10.4. No Waiver...............................................................68
Section 10.5. Modification............................................................68
Section 10.6. Execution and Delivery of Guarantee.....................................69
Section 10.7. Certain Bankruptcy Events...............................................69
ARTICLE 11. SECURITY AND PLEDGE OF COLLATERAL......................................................69
Section 11.1. Grant of Security Interest..............................................69
Section 11.2. Delivery of Collateral..................................................70
Section 11.3. Representations and Warranties..........................................70
Section 11.4. Further Assurances......................................................72
Section 11.5. Dividends; Voting Rights................................................72
Section 11.6. Trustee Appointed Attorney-in-Fact......................................74
Section 11.7. Trustee May Perform.....................................................74
Section 11.8. Trustee's Duties........................................................75
Section 11.9. Remedies upon Event of Default..........................................75
Section 11.10. Application of Proceeds.................................................76
Section 11.11. Continuing Lien.........................................................77
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Section 11.12. Certificates and Opinions...............................................77
Section 11.13. Release; Other Liens....................................................77
ARTICLE 12. MISCELLANEOUS..........................................................................77
Section 12.1. Trust Indenture Act Controls............................................77
Section 12.2. Notices.................................................................78
Section 12.3. Communication by Holders with Other Holders.............................79
Section 12.4. Certificate and Opinion as to Conditions Precedent......................79
Section 12.5. Statements Required in Certificate or Opinion of Counsel................79
Section 12.6. Rules by Trustee and Agents.............................................80
Section 12.7. Legal Holidays..........................................................80
Section 12.8. No Recourse Against Others..............................................80
Section 12.9. Counterparts............................................................80
Section 12.10. Governing Law...........................................................81
Section 12.11. No Adverse Interpretation of Other Agreements...........................81
Section 12.12. Successors..............................................................81
Section 12.13. Severability............................................................81
Section 12.14. Table of Contents, Headings, Etc........................................82
iv
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1)............................................. 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 7.10; 7.11
(b)................................................ 7.8; 7.10; 12.2
(c)................................................ N.A.
311(a)................................................ 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312(a)................................................ 2.5
(b)................................................ 12.3
(c)................................................ 12.3
313(a)................................................ 7.6
(b)(1)............................................. 7.6
(b)(2)............................................. 7.6
(c)................................................ 7.6; 12.2
(d)................................................ 7.6
314(a)................................................ 4.2; 4.3; 12.2
(b)................................................ N.A.
(c)(1)............................................. 7.2; 12.4
(c)(2)............................................. 7.2; 12.4
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 12.5
(f)................................................ N.A.
315(a)................................................ 7.1(b)
(b)................................................ 7.5; 12.2
(c)................................................ 7.1(a)
(d)................................................ 6.5; 7.1(c)
(e)................................................ 6.11
316(a) (last sentence)................................ 2.9
(a)(1)(A).......................................... 6.5
(a)(1)(B).......................................... 6.4
(a)(2)............................................. N.A.
(b)................................................ 6.7
(c)................................................ 9.4
317(a)(1)............................................. 6.8
(a)(2)............................................. 6.9
(b)................................................ 2.4
318(a)................................................ 12.1
(c)................................................ 12.1
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N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
v
Exhibits and Schedules
Exhibit A Form of Security
Exhibit B Form of Certificate to be delivered in connection with
transfers to Non-QIB Accredited Investors
Exhibit C Form of Certificate to be delivered in connection with
transfers pursuant to Regulation S
Schedule I Pledged Shares
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INDENTURE, dated as of June 26, 1997, by and among Shoppers Food
Warehouse Corp., a Delaware corporation (the "Company"), SFW Holding Corp., a
Delaware corporation (the "Guarantor") and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties
hereto and for the equal and ratable benefit of the Holders of the Company's
9 3/4% Senior Notes due 2004:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section a. Definitions.
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"Acquired Indebtedness" means (i) with respect to any Person that
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becomes a Restricted Subsidiary of the Company (or is merged with or into the
Company or any of its Restricted Subsidiaries) after the Issue Date,
Indebtedness of such Person or any of its subsidiaries existing at the time such
Person becomes a Restricted Subsidiary of the Company (or is merged with or into
the Company or any of its Restricted Subsidiaries) and which was not incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary of the Company (or being merged with or into the Company or any of
its Restricted Subsidiaries) and (ii) with respect to the Company or any of its
Restricted Subsidiaries, any Indebtedness assumed by the Company or any of its
Restricted Subsidiaries in connection with the acquisition of any assets from
another Person (other than the Company or any of its Restricted Subsidiaries),
and which was not incurred by such other Person in connection with, or in
contemplation of, such acquisition.
"Adjusted Consolidated Net Income" means, with respect to any Person,
--------------------------------
for any period, the Consolidated Net Income of such Person for such period plus
any non-cash charges relating to the amortization of goodwill or any other
purchase accounting adjustment resulting from any acquisition.
"Affiliate" means, as applied to any Person, any other Person directly
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or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, is defined to mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent or co-registrar or any
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successor thereto.
"Asset Acquisition" means (i) any capital contribution (by means of
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transfer of cash or other property to others or payment for property or services
for the account or use of others, or otherwise) to, or purchase or acquisition
of Capital Stock in, any other Person by the Company or any of its Restricted
Subsidiaries, pursuant to which such Person shall become a Restricted
Subsidiary of the Company or any of its Restricted Subsidiaries or shall be
merged with or into the Company or any of its Restricted Subsidiaries or
(ii) any acquisition by the Company or any of its Restricted Subsidiaries of the
assets of any Person which constitute substantially all of an operating unit or
business of such Person.
"Asset Sale" means, with respect to any Person, any direct or indirect
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sale, issuance, conveyance, lease, assignment, transfer or other disposition or
series of sales, transfers or other dispositions (including without limitation,
by merger or consolidation or by exchange of assets and whether by operation of
law or otherwise) made by such Person or any of its Restricted Subsidiaries to
any Person other than such Person or one of its Wholly Owned Restricted
Subsidiaries (or, in the case of a sale, transfer or other disposition by a
Restricted Subsidiary, to any Person other than the Company or a directly or
indirectly Wholly Owned Restricted Subsidiary) of any assets of such Person or
any of its Restricted Subsidiaries including, without limitation, assets
consisting of any Capital Stock or other securities held by such Person or any
of its Restricted Subsidiaries, and any Capital Stock issued by any Restricted
Subsidiary of such Person, in each case, outside of the ordinary course of
business, excluding, however, any sale, transfer or other disposition, or series
of related sales, transfers or other dispositions (i) resulting in Net Cash
Proceeds to the Company and the Restricted Subsidiaries of $250,000 or less;
(ii) of Cash Equivalents or inventory in the ordinary course of business or
obsolete equipment in the ordinary course of business consistent with past
practices of the Company; (iii) the lease or sublease of any real or personal
property in the ordinary course of business; or (iv) the proceeds of which are
not applied in accordance with Section 4.19, and which, together with all other
proceeds of Asset Sales that are not applied in accordance with Section 4.19, do
not exceed $5,000,000.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
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state or foreign law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
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committee of such board of directors duly authorized to act under this
Indenture.
"Board Resolution" means, with respect to any Person, a copy of a
----------------
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Legal Holiday.
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"Capital Stock" means, with respect to any Person, any and all shares,
-------------
partnership, membership or other interests, participations or other equivalents
(however designated, whether voting or non-voting) of such Person's capital
stock, whether now outstanding or issued after the Issue Date, and any and all
rights, warrants or options exchangeable into such capital stock.
2
"Capitalized Lease Obligation" means any obligation to pay rent or
----------------------------
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required to be classified
and accounted for as a capital lease obligation under GAAP, and, for the purpose
of this Indenture, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) obligations issued or unconditionally
----------------
guaranteed by the United States of America or any agency thereof, or obligations
issued by an agency or instrumentality thereof and backed by the full faith and
credit of the United States of America having maturities of not more than one
year from the date of acquisition; (ii) commercial paper rated the highest grade
by Moody's or S&P and maturing not more than one year from the date of creation
thereof; (iii) time deposits with, and certificates of deposit and banker's
acceptances issued by, any bank having capital surplus and undivided profits
aggregating at least $500,000,000 and maturing not more than one year from the
date of creation thereof; (iv) repurchase agreements that are secured by a
perfected security interest in an obligation described in clause (i) and are
with any bank described in clause (iii); (v) shares of any money market mutual
fund that (a) has at least 95% of its assets invested continuously in the types
of investments referred to in clauses (i) and (ii) above, (b) has net assets of
not less than $500,000,000 and (c) has the highest rating obtainable from either
S&P or Moody's; and (vi) readily marketable direct obligations issued by any
state of the United States of America or any political subdivision thereof
having one of the two highest rating categories obtainable from either Moody's
or S&P.
"Common Stock" of any Person means Capital Stock of such Person that
------------
does not rank (as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person) prior to shares of Capital Stock of any other class of such
Person.
"Company" means the party named as such above until a successor
-------
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means its successor.
"Consolidated Cash Flow" means, with respect to any Person, for any
----------------------
period (all as determined on a consolidated basis in accordance with GAAP),
Consolidated Net Income of such Person in such period plus (a) to the extent
reflected in the income statement of such Person, (i) income taxes,
(ii) Interest Expense, (iii) depreciation and amortization, (iv) LIFO charges,
(v) the amount of any restructuring reserve or charge and (vi) other non-cash
charges reducing Consolidated Net Income minus (b) to the extent reflected in
such income statement, non-cash items (excluding the reversal of any non-cash
charge to the extent such non-cash charge reduced Consolidated Net Income in a
prior period) which had the effect of increasing Consolidated Net Income for
such period.
"Consolidated Interest Coverage Ratio" means, for any Person, on a
------------------------------------
consolidated basis, the ratio of (i) Consolidated Cash Flow for such Person and
its Restricted Subsidiaries during the Four Quarter Period immediately preceding
the date of the incurrence of the proposed
3
Indebtedness giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date") to (ii) Interest Expense of such Person
for such Four Quarter Period. For purposes of this definition, "Consolidated
Cash Flow" and "Interest Expense" shall be calculated after giving effect on a
pro forma basis for such Four Quarter Period to (i) the incurrence or repayment
of any Indebtedness of such Person or any of its Restricted Subsidiaries at any
time during or subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such incurrence or repayment and the
application of the proceeds thereof, as the case may be, occurred on the first
day of the Four Quarter Period, (ii) any Asset Sales or other asset dispositions
of such Person and its Restricted Subsidiaries occurring at any time during or
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such Asset Sale or other asset disposition and the
applications of the proceeds therefrom occurred on the first day of the Four
Quarter Period and (iii) any Asset Acquisition or other acquisition of assets or
Capital Stock of an entity (occurring by merger or otherwise) occurring at any
time during or subsequent to the last day of the Four Quarter Period and on or
prior to the Transaction Date, as if such acquisition occurred on the first day
of the Four Quarter Period. If such Person or any of its Restricted Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the preceding
sentence shall give effect to the incurrence of such guaranteed Indebtedness as
if such Person or any Restricted Subsidiary of such Person had directly incurred
or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Interest Expense": (a) interest on any Indebtedness under a revolving credit
facility shall be computed based upon the pro forma average daily balance of
such Indebtedness during the Four Quarter Period; and (b) if interest on any
Indebtedness actually incurred on the Transaction Date may be determined
optionally at an interest rate based upon a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period.
"Consolidated Net Income" means, with respect to any Person for any
-----------------------
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, however, that (a) the Net Income of any Person (the "other
-------- -------
Person") in which the Person in question or one of its Restricted Subsidiaries
has a joint interest with a third party (which interest does not cause the Net
Income of such other Person to be consolidated into the Net Income of the Person
in question in accordance with GAAP) shall be included only to the extent of the
amount of dividends or distributions paid to the Person in question or one of
its Restricted Subsidiaries, (b) the Net Income of any Restricted Subsidiary of
the Person in question that is subject to any restriction or limitation on the
payment of dividends or the making of other distributions shall be excluded to
the extent of such restriction or limitation, (c) (i) the Net Income (or loss)
of any Person acquired in a pooling of interests transaction for any period
prior to the date of such acquisition and (ii) any net gain or loss resulting
from an Asset Acquisition or Asset Sale by the Person in question or any of its
Restricted Subsidiaries shall be excluded, and (d) extraordinary gains and
losses and any one-time increase or decrease to Net Income recorded because of
the adoption of new accounting policies, practices or standards required or
permitted by GAAP shall be excluded.
4
"Consolidated Net Worth" means with respect to any Person at any date
----------------------
of determination, the consolidated equity represented by the shares of such
Person's Capital Stock (other than Disqualified Stock) at such date, as
determined on a consolidated basis in accordance with GAAP and adjusted to
exclude all upward revaluations and other write-ups in the book value of any
asset of such Person or a Restricted Subsidiary of such Person subsequent to the
Issue Date.
"Custodian" means any receiver, trustee, assignee, liquidator or
---------
similar official under any Bankruptcy Law.
"Dart" means Dart Group Corporation, a Delaware corporation.
----
"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 under this Indenture.
"Definitive Securities" means Securities that are substantially in the
---------------------
form attached hereto as Exhibit A.
"Depository" means, with respect to the Securities issuable or issued
----------
in whole or in part in global form, the Person specified in Section 2.3 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and, thereafter "Depository" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock which, by its terms (or by
------------------
the terms of any security into which it is convertible or for which it is
exchangeable, in each case, at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is exchangeable for Indebtedness, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the Stated Maturity of the Securities.
"Equity Offering" means a private placement or public offering of
---------------
Capital Stock (other than Disqualified Stock) of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated thereunder.
"Exchange Notes" means Indebtedness of the Company identical in all
--------------
material respects to the Securities issued on the Issue Date (except that the
Exchange Notes will not contain terms with respect to transfer restrictions)
that is issued by the Company in exchange for such Securities.
"Exchange Offer" means the offer by the Company and the Guarantor, made
--------------
pursuant to the Registration Rights Agreement, to exchange the Exchange Notes
and guarantee thereof for the Securities issued on the Issue Date and guarantee
thereof.
5
"Fair Market Value" means, with respect to any asset or property, the
-----------------
price which could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. With respect to any
Person, Fair Market Value shall be determined by the Board of Directors of such
Person acting in good faith and shall be evidenced by a Board Resolution
delivered to the Trustee.
"Four Quarter Period" means the four most recent full fiscal quarters
-------------------
for which financial information is available.
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the Issue Date and as such principles may
be amended from time to time, including, without limitation, those 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 approved by a significant segment of the
accounting profession.
"Global Security" means one or more permanent global securities in
---------------
registered form, substantially in the form attached hereto as Exhibit A.
"guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part). The
term "guarantee" used as a verb has a corresponding meaning.
"Guarantor" means SFW Holding Corp., a Delaware corporation.
---------
"Holder" or "Securityholder" means a Person in whose name a Security
------ --------------
is registered.
"Increasing Rate Note Indenture" means the Indenture dated as of
------------------------------
February 6, 1997, by and among SFW Acquisition Corp. (predecessor to the
Company), the Guarantor and the Trustee, as amended by the First Supplemental
Indenture, dated as of February 6, 1997.
"Indebtedness" means, with respect to any Person at any date of
------------
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (iv) all obligations of such
Person to pay the deferred and
6
unpaid purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services, except trade
payables incurred in the ordinary course that have not remained unpaid for
greater than 90 days past their original due date, or accrued liabilities
arising in the ordinary course of business which are not overdue or which are
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which adequate reserves have been made, (v) all
obligations of such Person as lessee relating to a Capitalized Lease Obligation,
(vi) all Indebtedness of other Persons secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person, (vii) all
Indebtedness of other Persons guaranteed by such Person (but only to the extent
of the amount actually guaranteed), (viii) to the extent not otherwise included
in this definition, obligations under currency agreements, interest rate
agreements and commodity agreements and (ix) any and all deferrals, renewals,
extensions and refunding of, or amendments, modifications or supplements to, any
of the foregoing. The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date.
"Indenture" means this Indenture as amended or supplemented from time
---------
to time in accordance with the terms hereof.
"Institutional Accredited Investor" means an institutional "accredited
---------------------------------
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act).
"Interest Expense" means, for any Person for any period, (i) total
----------------
interest obligations (paid or accrued) of such Person in respect of its
Indebtedness, determined on a consolidated basis and in accordance with GAAP
(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 Capitalized
Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letters of credit or bankers' acceptance financing); minus (ii) the
amortization of deferred financing costs.
"Interest Payment Date" shall have the meaning assigned to such term in
---------------------
paragraph 1 of the Securities.
"Investment" means (i) any direct or indirect advance, loan or other
----------
extension of credit or capital contribution to another Person (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such other Person), (ii) any commitment to
make any such advance, loan, extension or capital contribution (but excluding
accounts receivable in the ordinary course), (iii) any purchase or acquisition
(whether for cash, property, services, securities or otherwise) of Capital
Stock, bonds, notes, debentures, options, warranty or similar instruments
7
issued by any Person or (iv) the designation by the Board of Directors or board
of directors of a Restricted Subsidiary to be an Unrestricted Subsidiary. The
Company shall be deemed to make an "Investment" in an amount equal to the Fair
Market Value of the net assets of any Subsidiary determined by the Board of
Directors of the Company in good faith at the time that such Subsidiary is
designated an Unrestricted Subsidiary. Any property transferred to an
Unrestricted Subsidiary from the Company shall be deemed an Investment valued at
its Fair Market Value, as determined by the Board of Directors of the Company in
good faith at the time of such transfer.
"Issue Date" means the date of original issuance of the Securities
----------
under this Indenture.
"Legal Holiday" means a Saturday, Sunday or a day on which banking
-------------
institutions in the States of New York or Maryland, or the state in which the
principal corporate trust office of the Trustee is located, are required or
authorized by law or other governmental action to be closed.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
----
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof, or any agreement
to give any security interest).
"Liquidated Damages" means all liquidated damages then owing pursuant
------------------
to Section 5 of the Registration Rights Agreement.
"Management Services Agreement" means the Management Services Agreement
-----------------------------
dated February 6, 1997, between Dart and SFW Acquisition Corp. (predecessor of
the Company).
"Maturity Date" means June 15, 2004.
-------------
"Moody's" means Moody's Investors Service, Inc. or if Moody's Investors
-------
Service, Inc. shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
that if Moody's Investors Service, Inc. ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"Moody's" shall mean any other nationally recognized rating agency (other than
S&P) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Company by a written
notice given to the Trustee.
"Net Cash Proceeds" means (a) in the case of any Asset Sale or any
-----------------
issuance and sale by any Person of Capital Stock, the aggregate net cash
proceeds and Cash Equivalents received by such Person after payment of expenses,
taxes, commissions and the like incurred in connection therewith (and, in the
case of any Asset Sale, net of the amount of cash applied to repay Indebtedness
secured by the asset involved in such Asset Sale) and (b) in the case of any
conversion or exchange of any outstanding Indebtedness or Disqualified Stock of
any Person for or into shares of Capital Stock of the Company, the sum of
(i) the proceeds received by the
8
Company in connection with the issuance of such Indebtedness or Disqualified
Stock on the date of such issuance and (ii) any additional amount paid by the
holder to the Company upon such conversion or exchange.
"Net Income" means, with respect to any Person for any period, the net
----------
income (loss) of such Person determined in accordance with GAAP.
"Net Sales" means, with respect to any Person for any period, the net
---------
sales of such Person determined in accordance with GAAP.
"New Credit Facility" means a credit facility with a bank or other
-------------------
third party in the aggregate principal amount at any time outstanding not to
exceed $35,000,000 that may be secured by inventory, accounts receivable and
certain other assets of the Company and its Subsidiaries, and any replacement,
renewal, refinancing or extension thereof in accordance with Section 4.7(c).
"Non-Recourse Debt" means Indebtedness (i) as to which under the terms
-----------------
thereof (including any related instruments, documents or filings) neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) and (b) is directly or indirectly liable (as a
guarantor or otherwise); (ii) no default with respect to which (including any
rights that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of the Company or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.
"Offering" means the offering by the Company of $200,000,000 aggregate
--------
principal amount of its 9 3/4% Senior Notes due 2004.
"Officer" means, with respect to any Person, the Chairman of the Board,
-------
the Chairman of the Executive Committee of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary,
any Assistant Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed by two Officers, one
---------------------
of whom must be the Chairman of the Board, the Chairman of the Executive
Committee of the Board, the President, the Treasurer or a Vice President of the
Company, that meets the requirements of Sections 12.4 and 12.5 hereof.
"Opinion of Counsel" means a written opinion reasonably satisfactory in
------------------
form and substance to the Trustee from legal counsel who is reasonably
acceptable to the Trustee, that
9
meets the requirements of Sections 12.4 and 12.5 hereof. The counsel may be an
employee of or counsel to the Company or the Trustee.
"Permitted Investments" means (i) certificates of deposit with final
---------------------
maturities of 3 years or less issued by United States commercial banks having
capital and surplus in excess of $100,000,000; (ii) commercial paper, bankers
acceptances, notes, bonds, debentures, repurchase agreements, call loans,
guaranteed investment certificates and other similar instruments, in each case
having a rating of investment grade by S&P or Moody's and, in each case, having
a maturity of 3 years or less; (iii) marketable direct obligations of the United
States Government or a United States agency with a maturity of 3 years or less;
(iv) shares of money market mutual or similar funds having assets in excess of
$100,000,000; (v) marketable direct obligations issued by any state of the
United States of America having the highest rating obtainable from either
Moody's or S&P and having a maturity of 3 years or less; (vi) asset-backed
securities rated "AA" or higher by Moody's or S&P with a maturity of 3 years or
less; and (vii) mortgage-backed securities rated "AA" or higher by Moody's or
S&P with a maturity of 3 years or less; provided that the Company and its
Restricted Subsidiaries may not make a Permitted Investment if, as a result of
giving effect thereto, (A) more than 20% of the aggregate Investments made
pursuant to clauses (i) through (vii) of this definition are rated "BBB" or
below or (B) more than 10% of the aggregate Investments made pursuant to clauses
(i) through (vii) of this definition are made pursuant to clause (vii) of this
definition.
"Permitted Liens" means, with respect to any Person, any Lien arising
---------------
by reason of (a) any judgment, decree or order of any court, so long as such
Lien is being contested in good faith and is adequately bonded, and any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have expired;
(b) taxes, assessments, governmental charges or claims not yet delinquent or
which are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted or if a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor; (c) security for payment of workers' compensation or other
insurance or social security legislation; (d) security for the performance of
tenders, contracts (other than contracts for the payment of money) or leases
(excluding any Capitalized Lease Obligations) incurred in the ordinary course of
business; (e) deposits to secure public or statutory obligations, or in lieu of
surety, performance or appeal bonds, entered into in the ordinary course of
business; (f) judgment and attachment Liens with respect to judgments and
attachments not giving rise to an Event of Default; (g) Liens arising by
operation of law in favor of carriers, warehousemen, landlords, mechanics,
materialmen, laborers, employees or suppliers, incurred in the ordinary course
of business and as to which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor, which
are not yet delinquent or are being contested in good faith by negotiations or
by appropriate proceedings which suspend the collection thereof; (h) easements,
rights-of-way, zoning and similar covenants and restrictions and other similar
encumbrances or title defects which, in the aggregate, are not substantial in
amount, and which do not in any case materially detract from the value of the
property subject thereto or
10
materially interfere with the ordinary conduct of the business of such Person or
any of its Restricted Subsidiaries; provided, such Liens are not incurred in
connection with any borrowing of money or any commitment to loan any money or
extend any credit; (i) Liens arising in the ordinary course of business in favor
of custom and revenue authorities arising as a matter of law to secure payment
of custom duties; (j) leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business of such Person or
of any of its Restricted Subsidiaries or which do not in any case materially
detract from the value of the property subject thereto (as such property is used
by such Person or one or more of its Restricted Subsidiaries); and (k) Liens
arising from filing precautionary UCC financing statements relating solely to
leases not prohibited by this Indenture.
"Permitted Secured Indebtedness" means any Indebtedness secured by
------------------------------
purchase money Liens upon or in any assets or property either acquired by the
Company and its Restricted Subsidiaries in the ordinary course of business with
the proceeds thereof or assumed by the Company and its Restricted Subsidiaries
pursuant to an Investment not prohibited by this Indenture; provided, however,
-------- -------
that (i) any such purchase money Lien shall not extend to or cover any assets or
property other than the assets or property being acquired and shall attach to
such assets or property within 60 days of the acquisition of such assets or
property and (ii) the aggregate principal amount of Indebtedness secured by such
Liens shall not exceed the lesser of the cost or Fair Market Value of the assets
or property being acquired.
"Person" means any individual, corporation, partnership, association,
------
trust or any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
"Pledge Agreement" means the Pledge Agreement dated the date of this
----------------
Indenture between the Company and the Trustee.
"QIB" has the meaning assigned to the term "qualified institutional
---
buyer" in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement
-----------------------------
dated as of even date herewith, by and among the Company and the other parties
named on the signature pages thereof, as such agreement may be amended, modified
or supplemented from time to time.
"Restricted Account" means a dedicated account to be established by the
------------------
Trustee for investment of the Restricted Proceeds in accordance with the Pledge
Agreement.
"Restricted Proceeds" means $50,000,000 of the net proceeds received by
-------------------
the Company from the Offering that the Company will deposit with the Trustee in
the Restricted Account pursuant to the Pledge Agreement.
"Restricted Security" has the meaning assigned to such term in
-------------------
Rule 144(a)(3) under the Securities Act.
11
"Restricted Subsidiary" of a Person means any Subsidiary of the
---------------------
referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
---------
"SEC" means the Securities and Exchange Commission.
---
"Securities" means the securities described above and issued under this
----------
Indenture in the form of Exhibit A hereto. After the consummation of the
Exchange Offer, references to the Securities shall mean the Exchange Notes and
(if any) the Securities issued on the Issue Date pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
"Securities Custodian" means, with respect to the Securities in global
--------------------
form, initially, the Trustee and any successor entity thereto or such other
Person as appointed by the Company from time to time in accordance with the
provisions of this Indenture.
"Settlement" means one or two settlements involving total payments and
----------
commitments by Dart and its Subsidiaries of at least $50,000,000 (which may
include related expenses and payments to mortgage lenders) in which (i) Herbert
H. Haft and/or (ii) Robert M. Haft, Gloria G. Haft and Linda G. Haft, as the
case may be, relinquish his or their claims to control of Dart, dispose (or
agree to dispose) of all or substantially all of his or their Capital Stock in
Dart, disclaim any equity interest in the Company and the Guarantor and resign
any positions of employment and board representation with Dart, the Company and
the Guarantor.
"Significant Subsidiary" means any Restricted 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 Issue Date.
"S&P" means Standard & Poor's Corporation or, if Standard & Poor's
---
Corporation shall cease rating debt securities having a maturity at original
issuance of at least one year and such ratings business shall have been
transferred to a successor Person, such successor Person; provided, however,
-------- -------
that if Standard & Poor's Corporation ceases rating debt securities having a
maturity at original issuance of at least one year and its ratings business with
respect thereto shall not have been transferred to any successor Person, then
"S&P" shall mean any other nationally recognized rating agency (other than
Moody's) that rates debt securities having a maturity at original issuance of at
least one year and that shall have been designated by the Company by a written
notice given to the Trustee.
"Stated Maturity" means, (i) with respect to any debt security, the
---------------
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is
12
due and payable and (ii) with respect to any scheduled installment of principal
or interest on any debt security, the date specified in such debt security as
the fixed date on which such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
----------
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock 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 such Person or a combination
thereof.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated
---------------------
February 6, 1997, between Dart and SFW Acquisition Corp. (predecessor of the
Company).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
---
77aaa-77bbbb) as in effect on the date of execution of this Indenture, except as
otherwise provided in Section 9.3.
"Trust Officer" means any officer or corporate trust assistant officer
-------------
of the Trustee assigned by the Trustee to administer its corporate trust
matters.
"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.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
-----------------------
(other than the Subsidiaries of the Company existing as of the Issue Date or any
successor to any of them) that at the time of determination shall have been
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution and (ii) any Subsidiary of an Unrestricted Subsidiary; but, in
each case, only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Capital Stock or (y) to maintain or
preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries; and (e) has at least one director
on its board of directors that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of the Company or any of its
Restricted Subsidiaries. Any such designation by the Board of Directors shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
indicating that such designation complies with the foregoing conditions and was
permitted under Section 4.5 hereof. If, at any time, any
13
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date. The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any Indebtedness of such Unrestricted Subsidiary
which is outstanding at the time of such designation and such designation shall
only be permitted if (A) no Default or Event of Default would be in existence
immediately following such designation and (B) the Company shall have delivered
to the Trustee an Officers' Certificate indicating that such designation
complies with the foregoing conditions.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
----------------------------------
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which shall at the time be owned by such person or by one
or more Wholly Owned Restricted Subsidiaries of such Person or by such Person
and one or more Wholly Owned Restricted Subsidiaries of such Person.
Section b. Other Definitions.
- --------- -----------------
Term Defined in Section
---- ------------------
"Affiliate Transaction".....................................................4.10
---------------------
"Agent Members".............................................................2.16
-------------
"Change in Control" .........................................................4.9
-----------------
"Change in Control Payment Date".............................................4.9
------------------------------
"Change in Control Repurchase Price".........................................4.9
----------------------------------
"Collateral"................................................................11.1
----------
"Company Notice..............................................................4.9
--------------
"Default Amount".............................................................6.2
--------------
"Deficiency"................................................................4.19
----------
"DTC"........................................................................2.1
---
"Event of Default"...........................................................6.1
----------------
"Net Cash Proceeds Offer"...................................................4.19
-----------------------
"Net Cash Proceeds Offer Amount"............................................4.19
------------------------------
"Obligations"...............................................................10.1
-----------
"Paying Agent"...............................................................2.3
------------
"Permitted Indebtedness".....................................................4.7
----------------------
"Pledged Shares"............................................................11.1
--------------
"Private Placement Legend"..................................................2.15
------------------------
"Proceeds Purchase Date"....................................................4.19
----------------------
"Registrar"..................................................................2.3
---------
"Repurchase Date"............................................................4.9
---------------
"Restricted Payments"........................................................4.5
-------------------
14
"Secured Obligations".......................................................11.1
-------------------
"Special Mandatory Redemption"...............................................3.1
----------------------------
"U.S. Government Obligations"................................................8.2
---------------------------
"Voting Trustee".............................................................4.9
--------------
Section c. 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 Securities;
--------------------
"indenture security holder" means a Holder or a
-------------------------
Securityholder;
"indenture to be qualified" means this Indenture;
-------------------------
"indenture trustee" or "institutional Trustee" means the
----------------- ---------------------
Trustee;
"obligor" on the Securities means the Company and any
-------
successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section d. Rules of Construction.
- --------- ---------------------
Unless the context otherwise requires:
i. a term has the meaning assigned to it;
ii. an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
iii. "or" is not exclusive;
iv. words in the singular include the plural, and in the plural,
include the singular;
v. provisions apply to successive events and transactions; and
vi. references to sections of or rules under the Securities Act
shall be deemed to
15
include substitute, replacement or successor sections or rules adopted by the
SEC from time to time.
ARTICLE 2.
THE SECURITIES
Section a. Form and Dating.
- --------- ---------------
The Definitive Securities, the Global Security and the Trustee's
certificate of authentication with respect thereto shall be substantially in the
form of Exhibit A to this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rules or usage. Each Security
shall be dated the date of its authentication. The Securities shall be in
denominations of $1,000 and integral multiples thereof. The Securities shall not
be issuable in bearer form.
The terms and provisions contained in the Securities shall constitute,
and are hereby expressly made, a part of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
Securities offered and sold to Institutional Accredited Investors will
be issued in the form of permanent certificated Securities, in definitive, fully
registered form without interest coupons (substantially in the form of Exhibit A
attached hereto).
Securities offered and sold in an offshore transaction in reliance on
Regulation S under the Securities Act shall be issued in the form of permanent
certificated Securities in registered form without interest coupons
(substantially in the form of Exhibit A attached hereto).
Securities offered and sold in reliance on Rule 144A will be
represented initially by a single permanent global note, in definitive, fully
registered form without interest coupons (substantially in the form of Exhibit A
attached hereto) and will be deposited with the Trustee as custodian for The
Depository Trust Company or its successors ("DTC"), Depository of the Global
Security, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Global Security shall represent such of the
outstanding Securities as shall be specified therein and shall provide that it
shall represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, by adjustments made on the records of the Trustee, as custodian for
the Depository, to reflect exchanges and redemptions. Any endorsement of a
Global Security to reflect the amount of any increase or decrease in the amount
of outstanding Securities represented thereby shall be made by the Trustee or
the Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required in Section 2.6.
16
Section b. Execution and Authentication.
- --------- ----------------------------
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities
and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture. The Guarantor shall endorse all Securities issued by the Company
under this Indenture.
The Trustee shall authenticate Securities for original issue up to two
hundred million dollars ($200,000,000) and shall authenticate Exchange Notes
from time to time for issue only in exchange for a like principal amount of
Securities, in each case upon a written order of the Company in the form of an
Officers' Certificate to a Trust Officer directing the Trustee to authenticate
the Securities or the Exchange Notes, as the case may be, and certifying that
all conditions precedent to the issuance of the Securities contained herein have
been complied with; provided that Exchange Notes shall be issuable only upon the
valid surrender for cancellation of Securities issued on the Issue Date of a
like aggregate principal amount in accordance with the Registration Rights
Agreement. Upon the written order of the Company in the form of an Officers'
Certificate, the Trustee shall authenticate Securities in substitution of
Securities issued on the Issue Date to reflect any name change of the Company.
The aggregate principal amount of Securities outstanding at any time may not
exceed two hundred million dollars ($200,000,000), except as provided in Section
2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to and at
the expense of the Company to authenticate Securities. An authenticating agent
may authenticate Securities whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
Section c. Registrar and Paying Agent.
- --------- --------------------------
The Company shall maintain an office or agency where (a) Securities may
be presented or surrendered for registration of transfer or for exchange
("Registrar"), (b) Securities may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the Company and the
Guarantor in respect of the Securities and this Indenture may be served. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional
17
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. The Company or any
of its Subsidiaries may act as Paying Agent or Registrar, except that for the
purposes of Articles 3 and 8 and Sections 2.4, 4.9 and 4.19, neither the Company
nor any Affiliate of the Company shall act as Paying Agent. The Company
initially appoints the Trustee as Registrar and Paying Agent until such time as
the Trustee has resigned or a successor has been appointed.
The Company initially appoints DTC to act as Depository with respect to
the Global Security.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Security.
Section d. 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 will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of or interest on the Securities, and will notify the Trustee of any
default by the Company or the Guarantor 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 and account for any money disbursed by it. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee and account for any money disbursed by it. 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. 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 any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Securities.
Section e. 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
Holders and shall otherwise comply with TIA (S)(S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least three
Business Days before each Interest Payment Date and, at such other times as the
Trustee may request in writing, within five Business Days of such request a list
in such form and as of such date as the Trustee may reasonably require, and
which the Trustee may conclusively rely upon, of the names and addresses of
Holders, and the Company shall otherwise comply with TIA (S)(S) 312(a).
18
Section f. Transfer and Exchange.
- --------- ---------------------
When Securities are presented to the Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided, however, that the
-------- -------
Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar, duly executed by the Holder thereof or its attorney
duly authorized in writing. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Securities at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchanges or transfers pursuant to Sections 2.2, 2.7, 2.10, 3.7,
4.9, 4.19 or 9.5). The Registrar shall not be required to register the transfer
of or exchange of any Security (i) during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Securities and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article 3, except the unredeemed
portion of any Security being redeemed in part.
Any Holder of the Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book-entry system maintained by the Holder of
such Global Security (or its agent), and that ownership of a beneficial interest
in the Global Security shall be required to be reflected in a book entry.
Section g. Replacement Securities.
- --------- ----------------------
If any mutilated Security is surrendered to the Trustee, the Registrar
or Securities Custodian, or the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Security, the
Company shall issue, the Guarantor shall endorse and the Trustee, upon the
written order of the Company signed by an Officer, shall authenticate a
replacement Security if the Trustee's requirements 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 which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company
and shall be entitled to all benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost
19
or stolen Securities.
Section h. Outstanding Securities.
- --------- ----------------------
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Security
effected by the Trustee hereunder, and those described in this Section as not
outstanding.
If a Security is replaced pursuant to Section 2.7 hereof (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7
hereof.
If the principal amount of any Security is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay all of the principal and interest due on the Securities
payable on that date, and is not prohibited from paying such money to the
Holders thereof pursuant to the terms of this Indenture, then on and after that
date such Securities shall be deemed to be no longer outstanding and shall cease
to accrue interest.
Except as set forth in Section 2.9 hereof, a Security does not cease to
be outstanding because the Company or an Affiliate holds the Security.
Section i. Treasury Securities.
- --------- -------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, the Guarantor or any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
the Guarantor 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 Securities that a Trust Officer of the
Trustee knows are so owned shall be so disregarded.
Section j. Temporary Securities.
- --------- --------------------
Until Definitive Securities are ready for delivery, the Company may
prepare, the Guarantor shall endorse and the Trustee shall authenticate
temporary Securities upon a written order of the Company in the form of an
Officers' Certificate delivered or caused to be delivered to a Trust Officer.
Temporary Securities shall be substantially in the form of Definitive
Securities
20
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare, the Guarantor
shall endorse and the Trustee shall authenticate, upon receipt of a written
order of the Company in the form of an Officers' Certificate which shall specify
the amount of the temporary Securities to be authenticated and the date on which
the temporary Securities are to be authenticated, Definitive Securities in
exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all benefits of
this Indenture.
Section k. Cancellation.
- --------- ------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or a Subsidiary), and no one else shall
cancel all Securities surrendered for registration of transfer, exchange,
payment, replacement or cancellation and certification of their destruction
(subject to the record retention requirements of the Exchange Act) shall be
delivered to the Company unless, by a written order, signed by an Officer, the
Company shall direct that cancelled Securities be returned to it. The Company
may not issue new Securities to replace Securities that it has paid or that have
been delivered to the Trustee for cancellation. If the Company or the Guarantor
shall acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
Section l. Defaulted Interest.
- --------- ------------------
If the Company defaults in a payment of interest on the Securities, 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, in each case at the rate provided
in the Securities and in Section 4.1 hereof. The Company shall, with the consent
of the Trustee, fix each such special record date and payment date. At least 15
days before the subsequent special record date, the Company (or upon the written
request of the Company, the Trustee, in the name of and at the expense of the
Company) shall mail to each Holder a notice that states the subsequent special
record date, the related payment date and the amount of such interest to be
paid. The Company may also pay defaulted interest in any other lawful manner.
Section m. Deposit of Moneys.
- --------- -----------------
Prior to 11:00 a.m. New York City time on each Interest Payment Date
and the Maturity Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to
21
the Holders on such Interest Payment Date or Maturity Date, as the case may be.
Section n. CUSIP Number.
- --------- ------------
The Company in issuing the Securities may use one or more "CUSIP"
numbers, and if so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities.
Section o. Restrictive Legends.
- --------- -------------------
Each Global Security and Definitive Security that constitutes a
Restricted Security shall bear the following legend (the "Private Placement
Legend") on the face thereof until after the second anniversary of the later of
the Issue Date and the last date on which the Company or any Affiliate of the
Company was the owner of such Security (or any predecessor security) (or such
shorter period of time as permitted by Rule 144(k) under the Securities Act or
any successor provision thereunder) (or such longer period of time as may be
required under the Securities Act or applicable state securities laws in the
opinion of counsel for the Company, unless otherwise agreed by the Company and
the Holder thereof):
"THIS SENIOR NOTE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) or (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SENIOR NOTE IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT
WILL NOT, WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SENIOR NOTE, RESELL OR OTHERWISE TRANSFER THIS SENIOR
NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT,
22
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SENIOR NOTE (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 OR ANY OTHER APPLICABLE
EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS SENIOR NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION
WITH ANY TRANSFER OF THIS SENIOR NOTE WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SENIOR NOTE, IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER
OF THIS SENIOR NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS."
Each Global Security shall also bear the following legend on the face
thereof:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE
23
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH
NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF
SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO.
OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED
TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.17 OF THE INDENTURE."
Section p. Book-Entry Provisions for Global Security.
- --------- -----------------------------------------
(1) The Global Security initially shall (i) be registered in the
name of Cede & Co., as nominee of the Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.15.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of any Holder.
24
(2) Transfers of the Global Security shall be limited to transfers
to the Depository, its successors or their respective nominees. Interests of
beneficial owners in the Global Security may be transferred or exchanged for
Definitive Securities in accordance with the rules and procedures of the
Depository and the provisions of Section 2.17. In addition, Definitive
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Security if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for the Global
Security and a successor depositary is not appointed by the Company within 90
days of such notice or (ii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depository to issue Definitive
Securities.
(3) In connection with any transfer or exchange of a portion of
the beneficial interest in the Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Definitive Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Definitive Securities of like tenor and amount.
(4) In connection with the transfer of the entire Global Security
to beneficial owners pursuant to paragraph (b), the Global Security shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations.
(5) Any Definitive Security constituting a Restricted Security
delivered in exchange for an interest in the Global Security pursuant to
paragraph (b) or (c) shall, except as otherwise provided by paragraphs (a)(i)(x)
and (c) of Section 2.17, bear the legend regarding transfer restrictions
applicable to the Definitive Securities set forth in Section 2.15.
(6) The Holder of the Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
25
Section q. Special Transfer Provisions.
- --------- ---------------------------
(1) Transfers to Non-QIB Institutional Accredited Investors and
-----------------------------------------------------------
Non-U.S. Persons. The following provisions shall apply with respect to the
- ----------------
registration of any proposed transfer of a Security constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
non-U.S. Person:
(a) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears
the Private Placement Legend, if (x) the requested transfer is after
the second anniversary of the Issue Date (provided, however, that
-------- -------
neither the Company nor any Affiliate of the Company has held any
beneficial interest in such Security, or portion thereof, at any time
on or prior to the second anniversary of the Issue Date), or (y) (l) in
the case of a transfer to an Institutional Accredited Investor which is
not a QIB (excluding non-U.S. Persons), the proposed transferee has
delivered to the Registrar a certificate substantially in the form of
Exhibit B hereto or (2) in the case of a transfer to a non-U.S. Person,
the proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit C hereto; and
(b) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Security, upon receipt by the
Registrar of (x) the certificate, if any, required by paragraph (i)
above and (y) instructions given in accordance with the Depository's
and the Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Definitive
Securities) a decrease in the principal amount of the Global Security in an
amount equal to the principal amount of the beneficial interest in the Global
Security to be transferred, and (b) the Company shall execute and the Trustee
shall authenticate and deliver one or more Definitive Securities of like tenor
and amount.
(2) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB (excluding transfers to non-U.S. Persons):
(a) the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Security stating,
or has otherwise advised the Company and the Registrar in writing, that
it is purchasing the Security for its own account, or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a QIB within the meaning of Rule 144A, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has
26
determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order
to claim the exemption from registration provided by Rule 144A; and
(b) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of Definitive Securities which
after transfer are to be evidenced by an interest in the Global
Security, upon receipt by the Registrar of instructions given in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Global Security in an amount
equal to the principal amount of the Definitive Securities to be
transferred, and the Trustee shall cancel the Definitive Securities so
transferred.
(3) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless (i) the circumstance contemplated by
paragraph (a)(i)(x) of this Section 2.17 exist or (ii) there is delivered to the
Registrar an opinion of counsel reasonably satisfactory to the Company and the
Trustee to the effect that neither such legend nor the related restrictions on
transfer are required in order to maintain compliance with the provisions of the
Securities Act.
(4) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE 3.
REDEMPTION
Section a. Rights of Redemption.
- --------- --------------------
(1) Optional Redemption. The Securities may be redeemed, in whole
-------------------
or in part, at the option of the Company at any time on or after June 15, 2001,
subject to the conditions, and at the redemption prices, specified in the
Securities, plus any accrued and unpaid interest to the date of redemption.
27
(2) Optional Redemption upon Equity Offerings. At any time until
-----------------------------------------
June 15, 2000, the Company may, at its option, redeem up to 35% (up to 10% if
the Special Mandatory Redemption has occurred) of the original aggregate
principal amount of Securities with the net cash proceeds of one or more Equity
Offerings subject to the conditions, and at the redemption price, specified in
the Securities, plus any accrued and unpaid interest to the date of redemption;
provided, however, that at least 65% of the original aggregate principal amount
- -------- -------
of the Securities remains outstanding immediately after the occurrence of such
redemption. Any such redemption shall reduce, on a dollar for dollar basis, the
principal amount of the Securities required to be redeemed pursuant to the
Special Mandatory Redemption described in clause (c) below.
(3) Special Mandatory Redemption.
----------------------------
(a) If, on or prior to June 30, 1998, the closing of a
Settlement has not occurred or the Company has not paid to Dart the
Restricted Proceeds to fund a Settlement, Securities in an aggregate
principal amount of $50,000,000 (subject to reduction pursuant to
clause (b) above) shall be redeemed pursuant to a special mandatory
redemption (the "Special Mandatory Redemption") at any time on or prior
to August 14, 1998, at 101% of the principal amount thereof, plus any
accrued and unpaid interest thereon to the date of redemption.
(b) The Company shall deposit $50,000,000 of the proceeds from
the Offering with the Trustee in the Restricted Account simultaneously
with receipt of payment therefor on the Issue Date. All amounts so
deposited shall be held by the Trustee pursuant to the Pledge Agreement
as collateral to secure the obligations of the Company under the
Securities, subject to release from the Restricted Account as set forth
in the Pledge Agreement. Following release of the Restricted Proceeds,
including any interest or profit earned thereon, from the Restricted
Account and termination of the Pledge Agreement, all of the Securities
will be unsecured obligations of the Company.
(c) Pending release of the Restricted Proceeds from the
Restricted Account pursuant to the Pledge Agreement either to make a
payment to Dart to fund a Settlement or to fund the Special Mandatory
Redemption, the Restricted Proceeds shall be invested in Cash
Equivalents as directed by the Company. If a Special Mandatory
Redemption occurs, then any interest or other profit earned on the
Restricted Proceeds shall be used to fund the Special Mandatory
Redemption (including any accrued and unpaid interest on the Securities
that are redeemed), except that any amount in the Restricted Account
not needed to fund the Special Mandatory Redemption may be used by the
Company for general corporate purposes (including payment of interest
on the Securities). If the Restricted Proceeds are released to the
Company from the Restricted Account and used to make a payment to Dart
to fund a Settlement, then any interest or other profit earned on the
Restricted Proceeds may be used by the Company for general corporate
purposes (including payment of interest on the Securities).
28
Section b. Notices to Trustee.
- --------- ------------------
In case of any redemption at the election of the Company, the Company
shall notify the Trustee of the redemption date, the principal amount of
Securities to be redeemed and the redemption price. The Company shall give each
notice provided for in this Section 3.2 at least 30 days but not more than 60
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee).
Section c. Selection of Securities to be Redeemed.
- --------- --------------------------------------
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed pro rata, by lot or by any other
method that the Trustee considers fair and appropriate; provided, however, that
any Securities to be redeemed pursuant to the Special Mandatory Redemption shall
be selected on a pro rata basis by the Trustee. The Trustee shall make the
selection not more than 60 days and not less than 30 days before the redemption
date from Securities outstanding not previously called for redemption.
Securities and portions thereof shall be redeemed only in integral multiples of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be called for redemption.
Section d. Notice of Redemption.
- --------- --------------------
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed at such Holder's
registered address.
The notice shall identify the Securities to be redeemed and shall
state:
i. the redemption date;
ii. the redemption price;
iii. if any Security is being redeemed in part, the portion
of the principal amount of such Security to be redeemed and that, after
the redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will be
issued in the Holder's name;
iv. the name and address of the Paying Agent;
v. that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
29
vi. that interest on Securities or portions thereof called
for redemption ceases to accrue on and after the redemption date; and
vii. the paragraph of the Securities pursuant to which the
Securities are being redeemed.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense.
Section e. Effect of Notice of Redemption.
- --------- ------------------------------
Notice of redemption shall be deemed to be given when mailed to each
Holder at its last registered address, whether or not the Holder receives such
notice. Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date at the price set forth in the
Security. A notice of redemption may not be conditional. Upon surrender to the
Trustee or Paying Agent, such Securities called for redemption shall be paid at
the redemption price (which shall include accrued and unpaid interest thereon to
the redemption date) but installments of interest, the maturity of which is on
or prior to the redemption date, shall be payable to Holders of record at the
close of business on the applicable payment dates.
Section f. Deposit of Redemption Price.
- --------- ---------------------------
On or before 11:00 a.m. New York City time on any redemption date, the
Company shall deposit with the Trustee or with the Paying Agent available funds
sufficient to pay the redemption price of and accrued interest (if payable under
the Securities) on all Securities to be redeemed on that date (taking into
account, in the case of a Special Mandatory Redemption, the amount on deposit in
the Restricted Account).
Section g. Securities Redeemed in Part.
- --------- ---------------------------
Upon surrender of a Security that is redeemed in part, the Company
shall issue, the Guarantor shall endorse and the Trustee shall authenticate for
the Holder at the expense of the Company a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE 4.
COVENANTS
Section a. Payment of Securities.
- --------- ---------------------
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities and this Indenture.
Principal and interest shall be considered
30
paid on the date due if the Paying Agent (other than the Company or a Subsidiary
of the Company) holds on that date money designated for and sufficient to pay in
cash all principal and interest then due. The Company shall pay all Liquidated
Damages, if any, in the same manner on the dates and in the amounts set forth in
the Registration Rights Agreement.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by the Securities, compounded semiannually;
and (ii) overdue installments of interest (without regard to any applicable
grace period) at the same rate, compounded semiannually.
Section b. SEC Reports.
- --------- -----------
(1) The Company shall deliver to the Trustee within 15 days after the
filing of the same with the SEC, copies of the quarterly and annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe), if any,
which the Company is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act. Notwithstanding that the Company may not be subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall file with the SEC, to the extent permitted by law or regulation,
and provide the Trustee and Holders with such quarterly and annual reports and
such information, documents and other reports specified in Sections 13 and 15(d)
of the Exchange Act within 15 days of the date such reports would have been due
had the Company been required to file such information, documents and reports
with the SEC. The Company also shall comply with the other provisions of TIA ss.
314(a). The Company shall timely comply with its reporting and filing
obligations under the applicable federal securities laws.
(b) At any time when the Company is not required by applicable law or
regulation to file the aforementioned reports, upon the request of a Holder, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto) to such Holder or to a prospective purchaser of such
Securities designated by such Holder, as the case may be, in order to permit
compliance by such Holder with Rule 144A.
Section c. Compliance Certificate.
- --------- ----------------------
The Company shall deliver to the Trustee, within 45 days after the end
of each of the first three quarters of the Company's fiscal year and within 90
days after the end of such fiscal year of the Company, an Officers' Certificate
stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal quarter or year, as the case may be, has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture
31
and is not in default in the performance or observance of any of the terms,
provisions and conditions hereof (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 the Company 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 Securities are prohibited. For
purposes of the foregoing sentence, the Company's compliance with conditions and
covenants under this Indenture shall be determined without regard to any period
of grace or requirement of notice provided hereunder.
The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee, within five Business Days after becoming aware of (i)
any Default, Event of Default or default in the performance of any covenant,
agreement or condition in this Indenture or (ii) any event of default under any
other instrument of Indebtedness to which Section 6.1(v) applies, an Officers'
Certificate specifying such Default, Event of Default or default, describing its
status and what action the Company is taking or proposes to take with respect
thereto.
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 this Section 4.3 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 that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof, 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.
Section d. Stay, Extension and Usury Laws.
- --------- ------------------------------
Each of the Company and the Guarantor covenants (to the extent that it
may lawfully do so) that it will 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, which may
affect the covenants or the performance of this Indenture; and each of the
Company and the Guarantor (to the extent it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law has been enacted.
32
Section e. Limitation on Restricted Payments.
- --------- ---------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
i. declare or pay any dividend on or make any distribution on
account of the Company's Capital Stock (other than dividends or
distributions payable in Capital Stock (other than Disqualified Stock)
of the Company);
ii. purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company, any Subsidiary of the Company or other
Affiliate of the Company (other than any such Capital Stock owned by
the Company or any Restricted Subsidiary of the Company);
iii. purchase, redeem or otherwise acquire or retire for value
any Indebtedness that is pari passu with or subordinated to the
Securities except for payments of Permitted Indebtedness in accordance
with the provisions contained therein, as such provisions may be
amended from time to time, but subject to the provisions of this
Indenture; provided, however, that no such amendments shall cause such
-------- -------
Permitted Indebtedness (other than the New Credit Facility) to be
scheduled to mature at a date earlier than the Stated Maturity of the
Indebtedness being amended;
iv. permit any Restricted Subsidiary to declare or pay any
dividend on, or make any distribution to the Holders (as such) of, any
shares of its Capital Stock except to the Company or a Wholly Owned
Restricted Subsidiary (other than dividends or distributions payable in
Capital Stock (other than Disqualified Stock) of it or the Company); or
v. make any Investment in any Affiliate (other than the Company
or a Wholly Owned Restricted Subsidiary of the Company),
(all such payments and other actions set forth in clauses (1) through (5) above
being collectively referred to as "Restricted Payments,") unless, at the time of
such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof; and
(b) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Issue Date (including
Restricted Payments permitted by clauses (iv), (v) and (vi)
of the next succeeding paragraph), is less than the aggregate
of (A) 50% of the aggregate Adjusted Consolidated Net Income
of the Company (excluding, for purposes of this clause (A),
accrued but
33
unpaid interest income, if any, from intercompany loans) for
the first day of the fiscal quarter including the Issue Date
to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available
at the time of such Restricted Payment (or if such Adjusted
Consolidated Net Income for such period is a deficit, 100% of
such deficit), plus (B) an amount equal to the Net Cash
Proceeds (plus the noncash proceeds, as determined in good
faith by the Board of Directors) received upon the sale of
Capital Stock (other than Disqualified Stock) subsequent to
the Issue Date plus (C) an amount equal to the Net Cash
Proceeds received upon the sale or other disposition or
repayment of any Investment made after the Issue Date which
had been treated as a Restricted Payment.
The foregoing provisions of this Section 4.5 will not prohibit (i) if
no Default or Event of Default shall have occurred and be continuing or shall
occur as a consequence thereof, the payment to Dart by the Company from its
available liquid assets of an amount not to exceed $10,000,000; (ii) if no
Default or Event of Default shall have occurred and be continuing or shall occur
as a consequence thereof, upon the execution of the New Credit Facility, an
additional payment to Dart by the Company from its available liquid assets of an
amount in the aggregate not to exceed $15,000,000; (iii) if no Default or Event
of Default shall have occurred and be continuing or shall occur as a consequence
thereof, the payment to Dart by the Company of the Restricted Proceeds for
purposes of funding a Settlement; (iv) if no Default or Event of Default shall
have occurred and be continuing or shall occur as a consequence thereof,
Investments in Unrestricted Subsidiaries in an aggregate amount not to exceed
$10,000,000; (v) the payment of any dividend within 60 days after the date of
declaration thereof, if at the record date for such dividend such payment would
have complied with the provisions of this Indenture; and (vi) if no Default or
Event of Default shall have occurred and be continuing or shall occur as a
consequence thereof, the redemption, repurchase, retirement or other acquisition
of the Securities or any Capital Stock of the Company in exchange for, or out of
the proceeds of, the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of other Capital Stock of the Company (other than any
Disqualified Stock); provided, however, that payments made in accordance with
-------- -------
clauses (i), (ii) and (iii) of this paragraph shall not be deemed to be
Restricted Payments.
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 this Section 4.5 were computed, which calculations may
be based upon the Company's latest available financial statements.
Section f. Continued Existence.
- --------- -------------------
Subject to Article 5 hereof, the Guarantor and the Company will, and
will cause the Company's Restricted Subsidiaries to, do or cause to be done all
things necessary to preserve and
34
keep in full force and effect its existence as a corporation and will refrain
from taking any action that would cause its existence as a corporation to cease,
including without limitation any action that would result in its liquidation,
winding up or dissolution; provided, however, that the foregoing restriction
-------- -------
shall not prohibit the Company from merging with or into a Restricted Subsidiary
or a Restricted Subsidiary from merging with or into the Company or another
Restricted Subsidiary.
Section g. Limitation on Indebtedness.
- --------- --------------------------
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly create, incur, assume, issue,
guarantee or in any manner become liable, contingently or otherwise, for or with
respect to the payment of, any Indebtedness (including any Acquired
Indebtedness) except for the following (each of which shall be given independent
effect):
(a) Indebtedness of the Company under its Increasing Rate Senior
Notes due 2004 (to the extent that the Company has satisfied the
conditions in Section 8.1 of the Increasing Rate Note Indenture with
respect to the discharge of its obligations, other than those
obligations which expressly survive pursuant to such Section 8.1), the
Securities and the indentures governing such debt securities;
(b) Permitted Secured Indebtedness;
(c) any replacements, renewals, refinancings and extensions of
Indebtedness incurred under clause (b) above, provided that (i) any
such replacement, renewal, refinancing and extension (x) shall not
provide for any mandatory redemption, amortization or sinking fund
requirement in an amount greater than or at a time prior to the amounts
and times specified in the Indebtedness being replaced, renewed,
refinanced or extended and (y) shall be contractually subordinated to
the Securities at least to the extent, if at all, that the Indebtedness
being replaced, renewed, refinanced or extended is subordinate to the
Securities, (ii) any such Indebtedness of any Person must be replaced,
refinanced or extended with Indebtedness incurred by such Person or by
the Company; and (iii) the principal amount of Indebtedness incurred
pursuant to this clause (c) (or, if such Indebtedness provides for an
amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the maturity thereof, the
original issue price of such Indebtedness) shall not exceed the sum of
the principal amount (or with respect to Indebtedness which provides
for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof, the
accredited value thereof) of Indebtedness so replaced, renewed,
refinanced or extended, plus accrued interest, the amount of any
premium required to be paid in connection with such replacement,
renewal, refinancing or extension pursuant to the terms of such
Indebtedness or the amount of any premium reasonably determined by the
Company as necessary to accomplish such replacement, renewal,
refinancing or extension
35
by means of a tender offer or privately negotiated purchase, and the
amount of fees and expenses incurred in connection therewith;
(d) Indebtedness of the Company or of any of the Restricted
Subsidiaries of the Company not to exceed an amount in the aggregate at
any one time outstanding equal to the lesser of (i) $10,000,000 or (ii)
an amount which when added to the amount of Indebtedness outstanding at
any one time under the New Credit Facility equals $35,000,000, provided
that such Indebtedness permitted under this clause (d) shall be either
contractually subordinated to or rank pari passu with the Securities;
(e) Indebtedness of the Company or any of the Restricted
Subsidiaries of the Company, provided (i) the Consolidated Interest
Coverage Ratio of the Company for the applicable Four Quarter Period
would have been at least 1.8 to 1.0 if such incurrence or issuance of
Indebtedness had occurred prior to the second anniversary of the Issue
Date and 2.0 to 1.0 thereafter, in each case after giving pro forma
effect to such incurrence or issuance and the application of the
proceeds therefrom, and (ii) such Indebtedness shall be either
contractually subordinated to or rank pari passu with the Securities;
(f) Indebtedness of the Company under the New Credit Facility;
(g) Indebtedness under Capitalized Lease Obligations of the
Company and its Restricted Subsidiaries incurred in the ordinary course
of business, not to exceed 3% of the Net Sales of the Company and its
Restricted Subsidiaries on a consolidated basis during the Four Quarter
Period immediately preceding such incurrence; and
(h) any Investments permitted under Section 4.14 (the foregoing
items in clauses (a) through (h) are referred to as "Permitted
Indebtedness").
Section h. Taxes.
- --------- -----
The Company shall, and shall cause each of its Subsidiaries to, pay
prior to delinquency all taxes, assessments and governmental levies, except as
contested in good faith and by appropriate proceedings and for which adequate
reserves, if any, required by GAAP shall have been set aside.
Section i. Repurchase at Holder's Option upon Change in Control.
- --------- ----------------------------------------------------
(1) Upon the occurrence of a Change in Control (as hereinafter
defined), each Holder shall have the right, at such Holder's option, to require
the Company to repurchase all of such Holder's Securities, or any portion
thereof that is an integral multiple of $1,000, on the date (the "Repurchase
Date") that is no later than 60 days after the date of the Company Notice (as
hereinafter defined) for cash at a price equal to 101% of the principal amount
of such Securities to be repurchased (the "Change in Control Repurchase Price"),
plus any accrued and unpaid interest to the Repurchase Date. Within 30 days
after the occurrence of a Change in Control, the
36
Company shall mail to all Holders a notice (the "Company Notice") of the
occurrence of such Change in Control and of the repurchase right arising as a
result thereof. The Company shall also deliver a copy of the Company Notice to
the Trustee. To exercise the repurchase right, a Holder shall deliver on or
before the 30th day after the date of the Company Notice irrevocable written
notice to the Trustee of the Holder's exercise of such right, together with the
Securities with respect to which the right is being exercised, duly endorsed for
transfer to the Company. The Company Notice shall state:
i. that the Company Notice is being delivered pursuant
to this Section 4.9 and that all Securities tendered will be accepted
for payment;
ii. the purchase price and the purchase date, which shall
be no later than 60 days from the date such notice is mailed (the
"Change in Control Payment Date");
iii. that any Securities not tendered will continue to
accrue interest;
iv. that, unless the Company defaults in the payment of
the Change in Control Repurchase Price, all Securities accepted for
payment upon a Change in Control shall cease to accrue interest after
the Change in Control Payment Date;
v. that in order to exercise the repurchase right, each
Holder electing to have any Securities purchased will be required to
(i) deliver irrevocable written notice to the Trustee of such Holder's
exercise of such right, and (ii) surrender the Securities (duly
endorsed for transfer to the Company), with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Securities
completed, and any form of letter of transmittal proposed by the
Company and acceptable to the Trustee and the Paying Agent, to the
Paying Agent at the address specified in the notice, in each case, on
or before 4:00 p.m. New York City time on the 30th day after the date
of the Company Notice; and
vi. that Holders whose Securities are being purchased
only in part will be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof.
(b) On the Change in Control Payment Date, the Company
shall, to the extent lawful, (1) accept for payment Securities or portions
thereof tendered pursuant to the Change in Control Notice, (2) deposit with the
Paying Agent in immediately available funds an amount equal to the Change in
Control Repurchase Price in respect of all Securities or portions thereof so
tendered, and (3) deliver or cause to be delivered to the Trustee the Securities
so accepted together with an Officers' Certificate stating the Securities or
portions thereof tendered to the Company. The Paying Agent shall promptly mail
to each Holder of Securities so accepted payment in an amount equal to the
purchase price for the Securities, and the Trustee shall promptly authenticate
and arrange for the Guarantor to endorse, and mail to each Holder, a new
37
Security equal in principal amount to the unpurchased portion of the Securities
surrendered by such Holder, if any; provided, that each such new Security shall
be in principal amount of $1,000 or an integral multiple thereof. The Company
shall cause to be mailed to each Holder the results of any repurchases by
Securityholders pursuant to this Section 4.9 on or as soon as practicable after
the Change in Control Payment Date.
A "Change in Control" will be deemed to have occurred at such
time as:
(a) any Person (including any syndicate or group deemed to
be a "person" under Section 13(d)(3) of the Exchange Act,
other than Dart, the Guarantor, the Company or any employee
benefit plan of the Company or the Guarantor), is or becomes
the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act), directly or indirectly, through a purchase,
merger or other acquisition transaction or series of
transactions or otherwise, of shares of Capital Stock of the
Company, the Guarantor or Dart, entitling such Person to
exercise 35% or more of the total voting power of all shares
of Capital Stock of the Company, the Guarantor or Dart,
entitled to vote generally in the election of the directors;
(b) there occurs any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of
another Person into the Company, or any sales or transfers of
all or substantially all of the assets of the Company to
another Person (other than a merger (x) which does not result
in any reclassification, conversion, exchange or cancellation
of outstanding shares of Capital Stock or (y) which is
effected solely to change the jurisdiction of incorporation of
the Company and results in a reclassification, conversion or
exchange of outstanding shares of Capital Stock into solely
shares of Capital Stock); provided, however, that no Change in
Control will be deemed to occur pursuant to this clause (ii)
upon the merger of any Wholly Owned Restricted Subsidiary of
the Company into the Company; or
(iii) the replacement of a majority of the Board of Directors
of the Company from the directors who constituted the Board of
Directors of the Company on the Issue Date, and such
replacement shall not have been approved by either (a) a vote
of a majority of the Board of Directors then still in office
who either were (x) members of the Board of Directors of the
Company on the Issue Date or (y) whose election as a member of
the Board of Directors was approved in the manner provided in
this clause (iii) or (b) the Voting Trustee (as defined
below).
Notwithstanding the foregoing, the beneficial ownership of
shares of Capital Stock of Dart under that certain Voting Trust Agreement dated
October 6, 1995 by and among Ronald S. Haft, Dart and Larry G. Schafran and
Sidney B. Silverman, as initial voting trustees, entitling such trust, acting
through its duly appointed voting trustee, or if more than one, trustees (the
38
"Voting Trustee"), to exercise 35% or more of the total voting power of all
shares of Capital Stock of Dart shall not be deemed to constitute a Change in
Control.
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 Securities pursuant to the occurrence of a Change in Control. To
the extent that the provisions of any securities laws or regulations conflict
with the "Change in Control" provisions herein, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the "Change in Control" provisions of this
Indenture by virtue thereof.
Section j. Limitation on Transactions with Affiliates.
- ---------- -------------------------------------------
Neither the Company nor any of its Restricted Subsidiaries nor the
Guarantor shall, from and after the Issue Date, sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into 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 Restricted Subsidiary than those that could have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (b) the Company delivers to the Trustee (i) with respect to
any Affiliate Transaction involving aggregate payments in excess of $250,000, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (a) above and
such Affiliate Transaction is approved by a majority of the disinterested
members of the Board of Directors, and (ii) with respect to any Affiliate
Transaction (other than the purchase in the ordinary course of business of
property or assets for resale) involving aggregate payments in excess of
$1,000,000, an opinion as to the fairness to the Company or, in the case of a
transaction with an Affiliate and a Restricted Subsidiary, to such Restricted
Subsidiary, in each case from a financial point of view issued by an investment
banking firm of national standing; provided, however, that (i) any employment
-------- -------
agreement, consulting agreement and indemnification obligation entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such Restricted
Subsidiary, (ii) transactions in accordance with the terms of the Tax Sharing
Agreement or the Management Services Agreement (provided that the Company shall
not be permitted to make any payment to Dart under the Tax Sharing Agreement in
respect of taxes on accrued but unpaid interest income of the Company on
intercompany loans), (iii) the payment of reasonable and customary fees to
directors of the Company who are not employees of the Company and (iv)
transactions permitted under Sections 4.5 and 4.14 hereof, in each case, shall
not be deemed Affiliate Transactions.
39
Section k. Limitation on Lines of Business.
- ---------- --------------------------------
Neither the Company nor any Restricted Subsidiary of the Company shall
engage in any business other than those businesses in which the Company is
engaged on the Issue Date and any other businesses related thereto.
Section l. Dividends and Other Payment Restrictions Affecting
- ---------- --------------------------------------------------
Subsidiaries.
-------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a)(i) pay dividends or
make any other distributions to the Company or any of its Restricted
Subsidiaries (A) on its Capital Stock 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 Restricted Subsidiaries, (b) make loans or
advances to the Company or any of its Restricted Subsidiaries or (c) transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries, except for (i) such encumbrances or restrictions existing under or
by reason of this Indenture or applicable law (ii) reasonable and customary
provisions restricting subletting or assignment of any lease entered into in the
ordinary course of business, consistent with industry practices, (iii)
restrictions under any Acquired Indebtedness or any agreement relating to any
property, asset or business acquired by the Company or any of its Restricted
Subsidiaries, which restrictions existed at the time of acquisition, were not
put in place in connection with or in anticipation of such acquisition and are
not applicable to any Person, other than the Person acquired or to any property,
asset or business other than the property, asset and business so acquired, (iv)
reasonable and customary restrictions on transfers of all collateral imposed in
connection with Permitted Liens, and (v) replacements of restrictions imposed
pursuant to clause (iii) and this clause (v) that are not more restrictive than
those being replaced and do not apply to any additional property or assets.
Section m. Further Assurance to the Trustee.
- ---------- ---------------------------------
The Company, upon request of the Trustee, shall execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the provisions of this Indenture.
Section n. Limitation on Investments, Loans and Advances.
- ---------- ----------------------------------------------
The Company shall not make, and shall not permit any of its Restricted
Subsidiaries to make, any Investment, except: (i) Investments by the Company or
a Restricted Subsidiary of the Company in any Wholly Owned Restricted Subsidiary
of the Company (including any such Investment pursuant to which a Person becomes
a Wholly Owned Restricted Subsidiary of the Company) or in the Company by any
Restricted Subsidiary of the Company; (ii) Investments represented by
receivables created or acquired in the ordinary course of business or the
settlement
40
of such receivables in the ordinary course of business; (iii) Investments
permitted to be made pursuant to Section 4.5; (iv) Investments represented by
advances to employees, officers and directors of the Company or its Restricted
Subsidiaries made in the ordinary course of business and consistent with
reasonable and customary business practices; (v) Permitted Investments; (vi)
Investments permitted to be made with the Net Cash Proceeds of Asset Sales
pursuant to Section 4.19; and (vii) payments made to Dart that are permitted by
Section 4.5.
Section o. Limitation on Liens.
- ---------- --------------------
The Company shall not, and the Company shall not permit, cause or
suffer any of its Restricted Subsidiaries to, create, incur, assume or suffer to
exist any Lien of any kind upon any of its property or assets now owned or
hereafter acquired by it, except for (a) Liens of the Company and its Restricted
Subsidiaries existing as of the Issue Date; (b) Permitted Liens; (c) Liens,
arising after the Issue Date, securing Permitted Secured Indebtedness; (d) Liens
on the assets or properties of the Company and its Restricted Subsidiaries,
arising after the Issue Date, securing Capitalized Lease Obligations permitted
to be incurred under Section 4.7(g), provided that (1) the aggregate principal
amount of Indebtedness secured by such Liens shall not exceed the lesser of the
cost or Fair Market Value of the assets or property so acquired and (2) such
Liens shall not encumber any assets or property of the Company or its Restricted
Subsidiaries other than the assets or property so acquired and shall attach to
such assets or property within 60 days of the acquisition of such assets or
property; (e) leases and subleases of real property which do not interfere with
the ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries, and which are made on customary and usual terms applicable to
similar properties; (f) Liens securing Indebtedness which is incurred to
refinance Indebtedness which has been secured by a Lien permitted under this
Indenture and is permitted to be refinanced under this Indenture, provided that
such Liens do not extend to or cover any property or assets of the Company or
any of its Subsidiaries not securing the Indebtedness so refinanced; (g) Liens
securing Acquired Indebtedness, provided that such Liens (1) are not incurred in
connection with, or in contemplation of the acquisition of the property or
assets acquired and (2) do not extend to or cover any property or assets of the
Company or any of its Restricted Subsidiaries (other than the property or assets
of the Restricted Subsidiary so acquired that are subject to such Lien); (h)
Liens in favor of the Trustee under this Indenture; (i) Liens securing
Indebtedness under the New Credit Facility; and (j) any replacement, extension
or renewal, in whole or in part, of any Lien described in this or the foregoing
clauses including in connection with any refinancing of the Indebtedness, in
whole or in part, secured by any such Lien, provided that to the extent any such
clause limits the amount secured or the assets subject to such Liens, no
extension or renewal shall increase the amount or the assets subject to such
Liens, except for Liens associated with such additional assets that are
otherwise permitted hereunder. The Guarantor shall not create, incur, assume or
suffer to exist any Lien (other than the Lien created under Article 11) of any
kind upon any of its property or assets (including without limitation Capital
Stock of its Restricted Subsidiaries) now owned or hereafter acquired by it.
Notwithstanding the foregoing, Liens shall be permitted by the
previous clauses (a)
41
though (h) only to the extent that any Indebtedness secured by such Liens is
incurred pursuant to and in accordance with the provisions of this Indenture.
Section p. Maintenance of Office or Agency.
- ---------- --------------------------------
The Company and the Guarantor shall maintain in the Borough of
Manhattan, The City of New York, the office or agency required under Section 2.3
hereof. The Company and the Guarantor 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 and the Guarantor shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 12.2.
Section q. Tax Sharing Agreement.
- ---------- ----------------------
The Company shall, and shall cause its Restricted Subsidiaries to,
comply in all material respects with the Tax Sharing Agreement and shall not
amend the Tax Sharing Agreement in any material respect, except as necessary to
comply with Section 4.10 to amend the Tax Sharing Agreement to prohibit the
Company from making any payment to Dart under the Tax Sharing Agreement in
respect of taxes on accrued but unpaid interest income of the Company on
intercompany loans.
Section r. Management Services Agreement.
- ---------- ------------------------------
The Company shall, and shall cause its Restricted Subsidiaries to,
comply in all material respects with the Management Services Agreement and shall
not amend the Management Services Agreement in any material respect.
Section s. Limitation on Asset Sales.
- ---------- --------------------------
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, make any Asset Sale, unless (a) the Company or the
applicable Restricted Subsidiary receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the assets sold, (b) at
least 85% of the consideration for such Asset Sale (other than assumption of
trade Indebtedness) consists of cash and Cash Equivalents, and (c) upon
consummation of an Asset Sale, the Company will within 365 days of the receipt
of the proceeds therefrom, either: (i) apply or cause the applicable Restricted
Subsidiary to apply the Net Cash Proceeds of any Asset Sale to (1) an investment
in properties and assets that replace the properties and assets that are the
subject of such Asset Sale or (2) an investment in properties and assets that
will be used in the business of the Company and its Restricted Subsidiaries as
existing on the Issue Date; (ii) in the case of a sale of a store or stores,
deem such Net Cash Proceeds to have been applied to the extent of any capital
expenditures made to acquire or construct a replacement store in the general
vicinity of the store sold within 365 days preceding the date of the Asset Sale;
or (iii) repay senior
42
Indebtedness. If 365 days after the receipt by the Company of Net Cash Proceeds
from an Asset Sale, the accumulated Net Cash Proceeds therefrom equal or exceed
$5,000,000 (such accumulated Net Cash Proceeds are defined herein as the "Net
Cash Proceeds Offer Amount"), then the Company shall apply or cause the
applicable Restricted Subsidiary to apply such Net Cash Proceeds to the purchase
of Securities tendered to the Company for purchase at a price equal to 100% of
the principal amount thereof plus accrued interest thereon to the date of
purchase pursuant to an offer to purchase made by the Company as set forth below
(a "Net Cash Proceeds Offer"). Notwithstanding the foregoing, the Company may
exclude from the foregoing provisions Asset Sales subsequent to the Issue Date,
the proceeds of which are derived from the sale and substantially concurrent
lease-back of a supermarket and/or related assets or equipment which is acquired
or constructed by the Company or a Restricted Subsidiary subsequent to the Issue
Date; provided, however, that any such sale and substantially concurrent lease-
-------- -------
back occurs within 270 days following such acquisition or the completion of such
construction, as the case may be. Pending the utilization of any Net Cash
Proceeds in the manner (and within the time period) described above, the Company
may use any such Net Cash Proceeds to repay revolving loans under the New Credit
Facility without a permanent reduction of the commitment thereunder.
Notice of a Net Cash Proceeds Offer pursuant to this Section 4.19 will
be mailed to Holders as shown on the register of Holders not less than 365 days
nor more than 390 days after the relevant Asset Sale, with a copy to the
Trustee. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Securities pursuant to the Net Cash Proceeds Offer
and shall state the following terms:
i. that Holders may elect to tender their Securities in
whole or in part in integral multiples of $1,000 in exchange for cash;
ii. that the Net Cash Proceeds Offer is being made pursuant
to Section 4.19 and that all Securities tendered will be accepted for payment;
provided, however, that if the aggregate principal amount of Securities tendered
- -------- -------
in the Net Cash Proceeds Offer plus accrued interest at the expiration of such
offer exceeds the aggregate amount of the Net Cash Proceeds Offer, the Company
shall select the Securities to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only Securities
in denominations of $1,000 or multiples thereof shall be purchased);
iii. the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier than 30 days nor
later than 40 days from the date such notice is mailed, other than as may be
required by law) (the "Proceeds Purchase Date");
iv. that any Security not tendered will continue to accrue
interest if interest is then accruing;
v. that, unless the Company defaults in making payment
therefor, any Security
43
accepted for payment pursuant to the Net Cash Proceeds Offer shall cease to
accrue interest after the Proceeds Purchase Date;
vi. that Holders electing to have a Security purchased
pursuant to a Net Cash Proceeds Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the Business Day prior to the
Proceeds Purchase Date;
vii. that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than two Business Days prior to the
Proceeds Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Securities the
Holder delivered for purchase and a statement that such Holder is withdrawing
its election to have such Security purchased;
viii. that Holders whose Securities were purchased only in
part will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; provided that each Security purchased and
each new Security issued shall be in an original principal amount of $1,000 or
integral multiples thereof; and
ix. that each Net Cash Proceeds Offer is required to remain
open for at least 20 Business Days or such longer period as may be required by
law.
On or before the Proceeds Purchase Date, the Company shall (i) deposit
with the Paying Agent coin or currency of the United States of America as at the
time of payment shall be the legal tender for the payment of public and private
debts sufficient to pay the purchase price of all Securities to be purchased and
(ii) deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price (and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Security equal
in principal amount to any unpurchased portion of the Security surrendered). The
Company will cause to be mailed to each Holder the results of the Net Cash
Proceeds Offer on or as soon as practicable after the Proceeds Purchase Date.
For purposes of this Section 4.19, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant to a
Net Cash Proceeds Offer shall be returned by the Trustee to the Company.
To the extent that the aggregate purchase price of the Securities
tendered pursuant to any Net Cash Proceeds Offer is less than the Net Cash
Proceeds Offer Amount (such shortfall constituting a "Deficiency"), the Company
may use such Deficiency for general corporate purposes. Upon completion of any
Net Cash Proceeds Offer, the Net Cash Proceeds Offer Amount shall be reset to
zero.
44
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 purchase
of the Securities pursuant to a Net Cash Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with provisions under
this Section 4.19, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 4.19 by virtue thereof.
Section t. Limitation on Issuance and Sale of Capital Stock of Restricted
- ---------- --------------------------------------------------------------
Subsidiaries.
-------------
The Company shall not permit any Restricted Subsidiary to issue any
Capital Stock (other than to the Company or to a Restricted Subsidiary) or
permit any Person (other than the Company or a Restricted Subsidiary) to own any
Capital Stock of any Restricted Subsidiary; provided, however, that the Company
and any Restricted Subsidiary may, in any single transaction, sell all but not
less than all, of the issued and outstanding Capital Stock of any Restricted
Subsidiary to any Person in a transaction made in accordance with Section 4.19.
Section u. Merger of Significant Subsidiaries.
- ---------- -----------------------------------
The Company shall cause each of Shoppers Food Warehouse MD Corp., a
Maryland corporation ("SFW MD") and Shoppers Food Warehouse VA Corp., a Virginia
corporation ("SFW VA"), its Subsidiaries, to be merged with and into the Company
within sixty (60) days of the date hereof, with the Company being the surviving
corporation in each such merger.
ARTICLE 5.
SUCCESSORS
Section a. When Company May Merge, etc.
- ---------- ----------------------------
The Company shall not consolidate with or merge with or into or sell,
assign, convey, lease, transfer or otherwise dispose of all or substantially all
of its properties and assets to any Person or Persons in a single transaction or
through a series of related transactions unless: (a) the Company shall be the
continuing Person or the Person formed by or surviving such consolidation or
merger or the Person to which such sale, assignment, conveyance, lease, transfer
or other disposition is made (the "surviving entity") shall be a corporation
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia; (b) the surviving entity shall expressly
assume, by a supplemental indenture executed and delivered to the Trustee, in
form and substance reasonably satisfactory to the Trustee, all of the
obligations of the Company under the Securities and this Indenture; (c)
immediately before and immediately after giving effect to such transaction or
series of transactions (including, without limitation, any Indebtedness incurred
or anticipated to be incurred in connection with or in respect to such
45
transaction or series of transactions), no Default or Event of Default shall
have occurred and be continuing; (d) the Company or the surviving entity (in the
case of a merger or consolidation involving the Company or any sale, assignment,
conveyance, lease, transfer or other disposition of all or substantially all of
the Company's properties and assets) shall immediately after giving effect to
such transaction or series of transactions (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions) have a Consolidated Net
Worth equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction or series of transactions; (e) immediately
after giving effect to such transaction or series of transactions, the Company
or the surviving entity (in the case of a merger or consolidation involving the
Company or any sale, assignment, conveyance, lease, transfer or other
disposition of all or substantially all of the Company's properties and assets)
could incur $1.00 of Indebtedness pursuant to Section 4.7(e); and (f) the
Company or the surviving entity shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that such
consolidation, merger, sale, assignment, conveyance, lease, transfer or other
disposition and, if a supplemental indenture is required in connection with such
transaction or series of transactions, such supplemental indenture complies with
this Section 5.1 and that all conditions precedent herein provided relating to
the transaction or series of transactions have been satisfied. The foregoing
limitations in clauses (b) and (f) of this Section shall not apply to a merger
of any Wholly Owned Restricted Subsidiary of the Company into the Company. The
foregoing provisions of this Section 5.1 relating to restrictions on mergers,
consolidations and transfers of assets shall also apply to the Guarantor,
provided that with respect to clause (b) the Company shall be deemed to mean the
Guarantor.
Section b. 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 5.1, the successor corporation or partnership 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 with the same effect as if such successor Person has been named
as the Company herein; provided, however, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest on the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section a. Events of Default.
- ---------- ------------------
"Event of Default," whenever used herein, means any one of the
following events:
46
(i) default in the payment of any interest on the
Securities when it becomes due and payable and continuance of such
default for a period of 30 days; or
(ii) default in the payment of the principal of, or
premium, if any, on the Securities when due (including a default in the
obligation to effectuate the Special Mandatory Redemption as provided
under Section 3.1(c) of this Indenture or under Section 3.3 of the
Pledge Agreement or in payment upon the exercise by a Holder of its
right to require repurchase of its Securities pursuant to Section 4.9
of this Indenture); or
(iii) default by the Company or the Guarantor in the
performance, or breach, of any covenant or agreement in this Indenture
(other than defaults specified in clause (i) or (ii) above), or the
Pledge Agreement (other than a default specified in clause (ii) above),
and continuance of such default or breach for a period of 30 days after
written notice to the Company or the Guarantor, as the case may be, by
the Trustee or to the Company or the Guarantor, as the case may be, and
the Trustee by the Holders of at least 25% in aggregate principal
amount of the outstanding Securities; or
(iv) failure by the Company, the Guarantor or any
Restricted Subsidiary (a) to make any payment when due with respect to
any other Indebtedness under one or more classes or issues of
Indebtedness, which one or more classes or issues of Indebtedness are
in an aggregate principal amount of $5,000,000 or more, and such
failure extends beyond the stated period of grace applicable thereto or
(b) to perform any term, covenant, condition or provision of one or
more classes or issues of Indebtedness, which one or more classes or
issues of Indebtedness are in an aggregate principal amount of
$5,000,000 or more, which failure, in the case of this clause (b),
results in an acceleration of the maturity thereof (whether or not such
right has yet been exercised); or
(v) one or more judgments, orders or decrees for the
payment of money in excess of $2,500,000, either individually or in an
aggregate amount, shall be entered against the Company, the Guarantor
or any of their respective Restricted Subsidiaries or any of their
respective properties and shall not be discharged and there shall have
been a period of 60 days during which a stay of enforcement of such
judgment or order, by reason of pending appeal or otherwise, shall not
be in effect; or
(vi) a decree, judgment or order by a court of competent
jurisdiction shall have been entered adjudging the Company, the
Guarantor or any of their respective Restricted Subsidiaries that
individually or as a group constitute a Significant Subsidiary, as
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company, the Guarantor or such
Significant Subsidiary under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a
period of 60 days; or a decree or order of a court of competent
jurisdiction over the appointment of a receiver, liquidator, trustee or
assignee in bankruptcy or insolvency of the Company, the Guarantor or
such Significant Subsidiary, or of the property of any such Person, or
for
47
the winding up or liquidation of the affairs of any such Person, shall
have been entered, and such decree, judgment or order shall have
remained in force undischarged and unstayed for a period of 60 days; or
(vii) this Indenture or, prior to the termination in
accordance with its terms, the Pledge Agreement, ceases to be in full
force and effect or ceases to give the Trustee, in any material
respect, the Liens, rights, powers and privileges purported to be
created hereby and thereby, in each case, as determined by a court of
competent jurisdiction.
Section b. Acceleration.
- ---------- -------------
If an Event of Default (other than an Event of Default specified in
clause (vi) above with respect to the Company) occurs and is continuing, then
the Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities may, by written notice, and the Trustee upon the request
of the Holders of not less than 25% in aggregate principal amount of the
outstanding Securities shall, declare the principal amount plus accrued interest
(if any) on all Securities on the date of such declaration to be due and payable
immediately (the "Default Amount"). Upon such declaration, the Default Amount
shall become due and payable immediately. If an Event of Default specified in
clause (vi) above with respect to the Company occurs and is continuing, then the
Default 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.
After a declaration of acceleration, the Holders of a majority in
aggregate principal amount of outstanding Securities may, by notice to the
Trustee, rescind such declaration of acceleration if all existing Events of
Default have been cured or waived, other than nonpayment of the Default Amount
that has become due solely as a result of such acceleration and if the
rescission of acceleration would not conflict with any judgment or decree by a
court of competent jurisdiction. The Holders of a majority in aggregate
principal amount of the outstanding Securities also have the right to waive past
defaults hereunder except a default in the payment of the principal of, premium,
if any, or interest on any Security, or in respect of a covenant or a provision
which cannot be modified or amended without the consent of all Holders.
Section c. Other Remedies.
- ---------- ---------------
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
48
Section d. Waiver of Existing and Past Defaults.
- ---------- -------------------------------------
Subject to Section 2.9, the Holders of a majority in aggregate
principal amount of the then outstanding Securities by written notice to the
Trustee may waive on behalf of all Holders 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, or the interest on, any Security. 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 thereto.
Section e. Control by Majority.
- ---------- --------------------
Subject to Section 2.9, the Holders of a majority in aggregate
principal amount of the then outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it hereunder. However, the Trustee
may refuse to follow any direction that conflicts with applicable law or this
Indenture, is unduly prejudicial to the rights of other Securityholders, or
would involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction.
Section f. Limitation on Suits.
- ---------- --------------------
A Securityholder may institute a proceeding with respect to this
Indenture or the Securities or pursue any remedy hereunder or thereunder only
if:
i. the Holder gives to the Trustee notice of a
continuing Event of Default;
ii. the Holder or Holders of at least 25% in aggregate
principal amount of the then outstanding Securities make a written
request to the Trustee to institute such proceeding or pursue such
remedy;
iii. such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
iv. the Trustee does not comply with the request within
15 days after receipt of the request and the offer of indemnity; and
v. during such 15-day period the Holders of a majority
in aggregate principal amount of the then outstanding Securities do not
give the Trustee a direction inconsistent
49
with the request.
A Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
Section g. Rights of Holders to Receive Payment.
- ---------- -------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of, premium, if any, on and interest on
the Security, on or after the respective due dates expressed in the Security, 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.
Section h. Collection Suit by Trustee.
- ---------- ---------------------------
If an Event of Default specified in Section 6.1(i) or (ii) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal,
interest and Liquidated Damages, if any, remaining unpaid on the Securities and
interest on overdue principal, interest and Liquidated Damages, if any, and such
further amount as shall be sufficient to cover the costs and, to the extent
lawful, expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section i. Trustee May File Proofs of Claim.
- ---------- ---------------------------------
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
Section j. 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 for amounts due under Section 7.7;
Second: to Securityholders for amounts due and unpaid on the
Securities for principal and interest (and Liquidated
Damages), ratably, without preference or priority of any
kind, according to the amounts due and payable on the
Securities for
50
principal 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
Securityholders.
Section k. Undertaking for Costs.
- ---------- ----------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as 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
pursuant to Section 6.7, or a suit by Holders of more than 10% in aggregate
principal amount of the then outstanding Securities.
Section l. Rights and Remedies Cumulative.
- ---------- -------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section m. Delay or Omission Not Waiver.
- ---------- -----------------------------
No delay or omission by the Trustee or by any Holder to exercise any
right or remedy arising upon any Event of Default shall impair the exercise of
any such right or remedy or constitute a waiver of any such Event of Default.
Every right and remedy given by this Article 6 or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
51
ARTICLE 7.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
Section a. Duties of Trustee.
- --------- -----------------
(1) 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 thereof as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(2) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture, but the Trustee need not verify the contents thereof.
(3) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own wilful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to the first sentence of Section 6.5.
(4) Every provision of this Indenture that in any way relates to the
Trustee is subject to Sections 7.1 and Section 7.2.
(5) The Trustee may refuse to perform any duty or exercise any right or
power unless
52
it receives indemnity satisfactory to it against any loss, liability or expense.
(6) 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 held in trust
except to the extent required by law.
(7) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section b. Rights of Trustee.
- --------- -----------------
(1) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters to the extent reasonably deemed necessary by it, and if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled upon reasonable notice, to examine the books and records and premises
of the Company, personally or by agent, authorized representative or attorney.
(2) Before the Trustee acts or refrains from acting pursuant to the
terms of this Indenture or otherwise, subject to Section 5.1, 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.
(3) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any Agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(5) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(6) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
53
(7) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
Section c. Individual Rights of Trustee.
- --------- ----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to and must
comply with Sections 7.10 and 7.11.
Section d. Trustee's Disclaimer.
- --------- --------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or any statement in the Securities
other than its authentication.
Section e. Notice of Defaults.
- --------- ------------------
If a Default or an Event of Default occurs and is continuing and if it
is actually known to the Trustee, the Trustee shall mail to each Holder a notice
of the Default or Event of Default within 90 days after it occurs, unless such
Default or an Event of Default shall have been cured or waived. Except in the
case of a Default or an Event of Default in payment on any Security (including
any failure to make any mandatory redemption payment required hereunder), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the best
interests of the Holders. The second sentence of this Section 7.5 shall be in
lieu of the proviso to (S) 315(b) of the TIA, which proviso is hereby expressly
excluded from this Indenture, as permitted by the TIA.
The Trustee shall also comply with all notice requirements set forth in
Section 4.3 of this Indenture.
Section f. Reports by Trustee to Holders.
- --------- -----------------------------
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to the Holders, at the Company's
expense, a brief report dated as of such reporting date that complies with TIA
(S) 313(a) (but if no event described in TIA (S) 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA (S) 313(b)(1) and TIA (S) 313(b)(2) to the
extent applicable. The Trustee shall also transmit by mail all reports as
required by TIA (S) 313(c).
54
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC to the extent permitted by law or regulation and each stock
exchange or market on which the Securities are listed or quoted. The Company
shall notify the Trustee when the Securities are listed on any stock exchange or
quoted on any market.
Section g. Compensation and Indemnity.
- --------- --------------------------
The Company shall pay to the Trustee (in its capacities as Trustee,
Paying Agent and Registrar) from time to time such compensation as may be agreed
in writing between the Company and the Trustee for its services hereunder and
under the Pledge Agreement. 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 upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses may include the reasonable compensation,
disbursements and out-of-pocket expenses of the Trustee's Agents and counsel.
The Company shall indemnify and hold harmless the Trustee (in its
capacities as Trustee, Paying Agent and Registrar) against any claim, demand,
expense (including reasonable attorney's fees and expenses), loss or liability
incurred by it except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(vii) occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under any
Bankruptcy Law.
Section h. 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.
The Trustee may resign by so notifying the Company in writing at least
30 days prior to the date of the proposed resignation; provided, however, that
-------- -------
no such resignation shall be
55
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.8. The Holders of a majority in principal amount of the then
outstanding Securities may remove the Trustee by so notifying the Trustee and
the Company. The Company may remove the Trustee if:
i. the Trustee fails to comply with Section 7.10;
ii. 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;
iii. a Custodian or public officer takes charge of the Trustee or
its property; or
iv. 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 Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee is not appointed or 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 Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder 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 the Holders. 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 7.7. Notwithstanding the replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof
shall continue for the benefit of the retiring trustee with respect to expenses
and liabilities incurred by it prior to such replacement.
Section i. 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,
the successor corporation without any further act shall be the successor
Trustee.
56
Section j. Eligibility; Disqualification.
- --------- -----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S) 310(a)(1) and 310(a)(5). The Trustee shall always
have a combined capital and surplus of at least $100,000,000 as set forth in its
most recent published annual report of condition. The Trustee is subject to TIA
(S) 310(b). The provisions of TIA (S) 310 shall apply to the Company, as obligor
of the Securities.
Section k. Preferential Collection of Claims Against Company.
- --------- -------------------------------------------------
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein. The
provisions of TIA (S) 311 shall apply to the Company, as obligor of the
Securities.
ARTICLE 8.
DISCHARGE OF INDENTURE
Section a. Termination of Company's Obligations.
- --------- ------------------------------------
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 7.7 and 8.4 shall survive) as to all
outstanding Securities when all such Securities theretofore authenticated and
delivered (except lost, stolen or destroyed Securities which have been replaced
or paid and Securities for the payment of which money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable hereunder. In
addition, the Company may terminate all of its obligations under this Indenture
(except the Company's obligations under Sections 7.7 and 8.4) if:
i. either (i) pursuant to Article 3, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Securities or (ii) all Securities
have otherwise become due and payable hereunder;
ii. the Company shall have irrevocably deposited or caused to
be deposited with the Trustee or a trustee satisfactory to the Trustee,
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such interest, to
pay principal of, premium, if any, and interest on the outstanding
Securities to maturity or redemption; provided that the Trustee shall
have been irrevocably instructed to apply such money to the payment of
said principal, premium, if any, and interest with respect to the
Securities;
57
iii. no Default or Event of Default with respect to this Indenture
or the Securities shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company is a party or by which
it is bound;
iv. the Company shall have paid all other sums payable by it
hereunder; and
v. the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's and the
Guarantor's obligations under the Securities and this Indenture have
been complied with.
However, the Company's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 4.1,
7.7, 8.1, 8.4 and 8.5, shall survive until the Securities are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.7 and 8.4
shall survive.
After a deposit made pursuant to this Section 8.1, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture except for those surviving obligations specified above.
Section b. Legal Defeasance and Covenant Defeasance.
- --------- ----------------------------------------
(1) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, with respect to the Securities,
elect to have either paragraph (b) or paragraph (c) below be applied to the
outstanding Securities upon compliance with the conditions set forth in
paragraph (d).
(2) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (b), the Company shall be deemed to have
been released and discharged from its obligations with respect to the
outstanding Securities on the date the conditions set forth below are satisfied
(hereinafter, "legal defeasance"). For this purpose, such legal defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purpose of paragraph (e) below and
the other Sections of and matters under this Indenture referred to in (i) and
(ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
paragraph (d) below and as more fully set forth in such paragraph, payments in
respect of the principal of, premium, if any, and interest on such Securities
when such payments are due, (ii) the Company's obligations with respect to such
Securities under Sections 2.6, 2.7 and 4.16, and, with respect to the Trustee,
58
under Section 7.7, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection herewith, and
(iv) this Section 8.2 and Section 8.5. Subject to compliance with this Section
8.2, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) below with
respect to the Securities.
(3) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (c), the Company shall be released and
discharged from its obligations under any covenant contained in Article 5 and in
Sections 4.5, 4.7 through 4.12, 4.14, 4.15, 4.17 and 4.18 with respect to the
outstanding Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Securities shall
thereafter be deemed to be not "outstanding" for the purpose of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the outstanding Securities, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.1(iv), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
(4) The following shall be the conditions to application of
either paragraph (b) or paragraph (c) above to the outstanding Securities:
(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 Section 8.2 applicable to it) as trust funds in trust
for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of
such Securities, (x) cash in U.S. dollars or (y) direct non-callable
obligations of, or non-callable obligations guaranteed by, the United
States of America for the payment of which guarantee or obligation the
full faith and credit of the United States is pledged ("U.S. Government
Obligations") maturing as to principal, premium, if any, and interest in
such amounts of money and at such times as are sufficient without
consideration of any reinvestment of such interest, to pay principal of
and interest on the outstanding Securities not later than one day before
the due date of any payment, or (z) 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 principal of, premium, if any, and interest on the
outstanding Securities on the Maturity Date or otherwise in accordance
with the terms of this Indenture and of such Securities; provided,
--------
however, that the Trustee (or other qualifying trustee) shall have
-------
received an irrevocable
59
written order from the Company instructing the Trustee (or other
qualifying trustee) to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Securities;
(b) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Securities shall have occurred and be continuing on the
date of such deposit or, insofar as Section 6.1(vii) is concerned, at
any time during the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(c) such legal defeasance or covenant defeasance shall not cause
the Trustee to have a conflicting interest with respect to any
Securities of the Company;
(d) such legal defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a Default or Event of Default
under, this Indenture or any other material agreement or instrument to
which the Company, the Guarantor or any Restricted Subsidiary is a party
or by which the Company, the Guarantor or any Restricted Subsidiary is
bound;
(e) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an Opinion of Counsel,
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the
Issue Date, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such 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;
(f) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an Opinion of Counsel, to
the effect that the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred;
(g) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that, (x) the trust funds
will not be subject to any rights of any other holders of senior
indebtedness including, without limitation, those arising under this
Indenture, after the 91st day following the deposit, and (y) after the
91st day following the deposit, the trust funds will not be subject to
the effect of any applicable Bankruptcy Law;
60
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to either the legal defeasance under paragraph (b)
above or the covenant defeasance under paragraph (c) above, as the case
may be, have been complied with; and
(i) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others.
(5) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this paragraph (e), the "Trustee") pursuant to
paragraph (d) above in respect of the outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (other than the Company or any Affiliate of the Company) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to paragraph (d) above or the principal, premium,
if any, and interest received in respect thereof other than any such tax, fee or
other charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Section 8.2 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request, in writing, by the Company any money or U.S. Government Obligations
held by it as provided in paragraph (d) above which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent legal defeasance or covenant defeasance.
Section c. Application of Trust Money.
- --------- --------------------------
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.1. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal and interest on the
Securities.
61
Section d. Repayment to Company.
- --------- --------------------
Subject to Section 7.7, the Trustee and the Paying Agent shall promptly
pay to the Company upon request any excess money or securities held by them at
any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money held by them for the payment of principal or
interest that remains unclaimed for one year after the date upon which such
payment shall have become due; provided, however, that the Company shall have
first caused notice of such payment to the Company to be mailed to each Holder
entitled thereto no less than 30 days prior to such payment. After payment to
the Company, the Holders entitled to the money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another Person.
Section e. Reinstatement.
- --------- -------------
If (i) the Trustee or Paying Agent is unable to apply any money in
accordance with Section 8.3 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application and (ii) the Holders of at least a majority in principal amount of
the then outstanding Securities so request by written notice to the Trustee, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.1 until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.3; provided, however, that if the Company makes any
-------- -------
payment of interest on or principal of any Security following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE 9.
AMENDMENTS
Section a. Without Consent of Holders.
- --------- --------------------------
The Company, when authorized by resolution of its Board of Directors,
and the Trustee may amend, waive or supplement this Indenture or the Securities
without the consent of any Holder:
i. to cure any ambiguity, defect or inconsistency or to make
any other provisions with respect to matters or questions arising under
this Indenture that shall not be inconsistent with the provisions of
this Indenture; provided that such amendment does not in the opinion of
the Trustee adversely affect the rights of any Holder;
ii. to mortgage, pledge, hypothecate or grant a security
interest in favor of the
62
Trustee as additional security for the payment and performance of the
obligations hereunder, in any property or assets, including any which is
required to be mortgaged, pledged or hypothecated, or in which a
security interest is required to be granted, to the Trustee;
iii. to make any change that does not adversely affect the rights
hereunder of any Holder;
iv. to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company, or to provide any additional rights or benefits to the Holders;
v. to evidence the succession of another person to the Company,
and the assumption by any such successor of the obligations of the
Company herein and in the Securities in accordance with Article 5;
vi. to set out the form of the Exchange Notes and to set forth
such other matters as are necessary in connection with the Exchange
Offer that do not adversely affect the rights of any Holder; or
vii. to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
provided that, in each case, the Company has delivered to the Trustee an Opinion
of Counsel and an Officers' Certificate, each stating that such amendment,
waiver or supplement complies with the provisions of this Section 9.1.
Section b. With Consent of Holders.
- --------- -----------------------
Subject to the provisions of Section 6.4 and 6.7, the Company and the
Trustee may amend or modify this Indenture or the Securities with the written
consent of the Holders of at least a majority in principal amount of the then
outstanding Securities; provided, however, that, without the consent of each
-------- -------
Holder affected, an amendment, modification or waiver under this Section 9.2 may
not (with respect to any securities held by a non-consenting Holder):
i. reduce the principal amount outstanding of, extend the fixed
maturity of, or alter the redemption provisions of, the Securities;
ii. reduce the rate of or change the time for payment of interest
on any Security;
iii. make any Security payable in money or currency other than
that stated in the Security;
63
iv. impair the right to initiate suit for the enforcement of any
payment on or with respect to any Security;
v. make any change that affects the ranking or security of the
Securities;
vi. waive a Default or Event of Default in the payment of the
principal of, Liquidated Damages, if any, or interest on, any Security;
vii. reduce the percentage in principal amount outstanding of
Securities, holders of which must consent to an amendment, supplement or
waiver or consent to take any action hereunder or under the Securities;
or
viii. following the mailing of a Company Notice, modify the
provisions of this Indenture with respect to such Company Notice in a
manner adverse to any Holder.
In addition, neither the Company nor the Trustee may waive the covenant
relating to a Holder's right to repurchase upon the occurrence of a Change in
Control.
To secure a consent of the Holders under this Section, it shall not be
necessary for the Holders 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 or waiver under this Section becomes effective, the
Company shall mail to Holders a notice briefly describing the amendment or
waiver. Any failure of the Company to mail such notices, or any defect therein,
shall not, however, in any way, impair or affect the validity of any such
amendment or waiver.
Section c. Compliance with Trust Indenture Act.
- --------- -----------------------------------
Every amendment to this Indenture or the Securities shall be set forth
in a supplemental indenture that complies with the TIA as then in effect.
Section d. Revocation and Effect of Consents.
- --------- ---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, prior to becoming effective, any such Holder or
subsequent Holder may revoke the consent as to his Security or portion of a
Security if the Trustee receives the notice of revocation before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented to the amendment
or waiver.
64
The Company may set a record date for the purpose of determining the
Holders entitled to consent to any amendment or waiver. If the Company sets such
a record date, such record date shall be the later of (i) 30 days prior to the
first solicitation of such consent or (ii) the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 2.5 prior to such
solicitation. If a record date is set, then notwithstanding the provisions of
the immediately preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal amount of
Securities required hereunder for such amendment or waiver to be effective shall
have also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (1) through (7) of
Section 9.2. In such case, the amendment or waiver shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security that
evidences the same debt as the consenting Holder's Security; provided, however,
-------- -------
that any such waiver shall not impair or affect the right of any Holder to
receive payment of principal and premium of and interest on a Security, on or
after the respective dates set for such amounts to become due and payable
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates.
Section e. Notation on or Exchange of Securities.
- --------- -------------------------------------
The Trustee (in accordance with the written direction of the Company)
may (at the Company's expense) place an appropriate notation about an amendment,
supplement or waiver on any Security thereafter authenticated. The Company in
exchange for all Securities may issue and the Trustee shall authenticate new
Securities that reflect the amendment or waiver. Failure to make the appropriate
notation or issue a new Security shall not affect the validity and effect of
such amendment, supplement or waiver.
Section f. Trustee Protected.
- --------- -----------------
The Trustee shall execute any amendment, supplement, or waiver
authorized pursuant to this Article 9; provided, however, that the Trustee may,
-------- -------
but shall not be obligated to, execute any such amendment, supplement or waiver
that affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article 9 is
authorized or permitted by this Indenture.
65
ARTICLE 10.
GUARANTEE
Section a. Guarantee.
- --------- ---------
(1) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and subject to
the provisions of this Article 10, the Guarantor hereby irrevocably,
fully and unconditionally guarantees to each Holder and to the Trustee
and its successors and assigns (i) the full and punctual payment of
principal of and interest on the Securities when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture (including
obligations to the Trustee) and the Securities and (ii) the full and
punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Obligations").
The Guarantor further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from the
Guarantor, and that the Guarantor shall remain bound under this Article
10 notwithstanding any extension or renewal of any Obligation.
(2) The Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpayment. The Guarantor waives notice of
any default under the Securities or the Obligations. The Obligations of
the Guarantor hereunder shall not be affected by (i) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under this
Indenture, the Securities or any other agreement or otherwise; (ii) any
extension or renewal of any thereof; (iii) any rescission, waiver,
amendment or modification of any of the terms or provisions of this
Indenture, the Securities or any other agreement; (iv) the release of
any security held by any Holder or the Trustee for the Obligations or
any of them; (v) the failure of any Holder or Trustee to exercise any
right or remedy against any other guarantor of the Obligations; or (vi)
any change in ownership of the Guarantor.
(3) The Guarantor further agrees that its guarantee herein
constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that
any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations. The Obligations of the Guarantor hereunder
shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any
defense of set off, counterclaim, recoupment or termination whatsoever
or by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of the Guarantor herein shall not be
discharged or impaired or otherwise
66
affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any
thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantor or would
otherwise operate as a discharge of the Guarantor as a matter of law or
equity. The Guarantor further agrees that its guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at
any time payment, or any part thereof, of principal of or interest on
any Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
(4) In furtherance of the foregoing and not in limitation of
any other right which any Holder or the Trustee has at law or in equity
against the Guarantor by virtue hereof, upon the failure of the Company
to pay the principal of or interest on any Obligation when and as the
same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other
Obligation, the Guarantor hereby promises to and shall, upon receipt of
written demand by the Trustee, forthwith pay, or cause to be paid, in
cash, to the Holders or the Trustee an amount equal to the sum of (i)
the unpaid principal amount of such Obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by
law) and (iii) all other monetary Obligations of the Company to the
Holders and the Trustee.
(5) The Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
Obligations guaranteed hereby until payment in full of all Obligations.
The Guarantor further agrees that, as between it, on the one hand, and
the Holders and the Trustee, on the other hand (i) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article
6 for the purposes of the Guarantor's guarantee herein, notwithstanding
any stay, injunction or other prohibition preventing such acceleration
in respect of the Obligations guaranteed hereby, and (ii) in the event
of any declaration of acceleration of such obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purposes of
this Section.
The Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section.
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Section b. Limitation on Liability.
- --------- -----------------------
Any term or provision of this Indenture to the contrary notwithstanding,
the maximum, aggregate amount of the obligations guaranteed hereunder by the
Guarantor shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Indenture, as it relates to the Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer.
Section c. Successors and Assigns.
- --------- ----------------------
This Article 10 shall be binding upon the Guarantor and its successors
and assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Indenture and in the Securities shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.
Section d. No Waiver.
- --------- ---------
Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article 10 shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege. The
rights, remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies or
benefits which either may have under this Article 10 at law, in equity, by
statute or otherwise.
Section e. Modification.
- --------- ------------
No modification, amendment or waiver of any provision of this Article
10 nor the consent to any departure by the Guarantor therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the
Guarantor in any case shall entitle the Guarantor to any other or further notice
or demand in the same, similar or other circumstances.
Section f. Execution and Delivery of Guarantee.
- --------- -----------------------------------
To evidence its guarantee set forth in this Article 10, the Guarantor
agrees that a notation of such guarantee substantially in the form annexed
hereto as contained in Exhibit A shall be endorsed on each Security
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of the Guarantor by an Officer by manual or facsimile
signature.
The Guarantor agrees that its guarantee set forth in this Article 10
shall remain in
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full force and effect and shall apply to all the Securities notwithstanding any
failure to endorse on each Security a notation of such guarantee.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security on which a guarantee is endorsed, the guarantee shall
be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the guarantee set forth in
this Indenture on behalf of the Guarantor.
Section g. Certain Bankruptcy Events.
- --------- -------------------------
The Guarantor hereby covenants and agrees that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, it shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
ARTICLE 11.
SECURITY AND PLEDGE OF COLLATERAL
Section a. Grant of Security Interest.
- --------- --------------------------
To secure the full and punctual payment by the Guarantor of any payment
due by the Guarantor pursuant to Article 10 and any other amounts owing under
this Indenture pursuant to Section 7.7 when and as the same shall be due and
payable, whether on an Interest Payment Date or the Maturity Date, by
acceleration, repurchase, redemption or otherwise (including, without
limitation, the payment of interest and other amounts which would accrue and
become due but for the filing of a petition in bankruptcy (whether or not a
claim is allowed against the Guarantor for such interest or other amounts in any
such bankruptcy proceeding) or the operation of the automatic stay under Section
362(a) of the Bankruptcy Law), and interest on the overdue principal of and
interest (to the extent permitted by law), if any, on the Securities and the
performance of all other obligations of the Guarantor to the Holders or the
Trustee under this Indenture and the Securities, according to the terms hereof
or thereof (collectively, the "Secured Obligations"), the Guarantor hereby
grants to the Trustee, for the benefit of the Trustee and the Holders, a
continuing first priority security interest in all its right, title and interest
in and to the following (collectively, the "Collateral"):
(a) all of the shares of Capital Stock of the Company owned
by the Guarantor
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(as set forth on Schedule I, the "Pledged Shares"), and all certificates
representing such shares and any interest of the Guarantor in the
entries on the books of any financial intermediary pertaining to such
shares;
(b) all additional shares of Capital Stock of the Company
that may from time to time be acquired by or issued to the Guarantor in
any manner, and all certificates representing such additional shares and
any interest of the Guarantor in the entries on the books of any
financial intermediary pertaining to such additional shares; and
(c) subject to the provisions of Section 11.5, all
dividends, cash, instruments and other property and "proceeds" (as such
term is defined in the Uniform Commercial Code as in effect in any and
all relevant jurisdictions) from time to time received, receivable or
otherwise distributed in respect of or in exchange for any of the
foregoing, and any account in which any Collateral is deposited or
invested, including any earnings thereon.
Section b. Delivery of Collateral.
- --------- ----------------------
(1) Any and all cash, certificates or instruments
representing or evidencing the Collateral shall be delivered to and held
by or on behalf of the Trustee pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Trustee.
(2) The Trustee shall have the right, at any time after the
occurrence and during the continuance of an Event of Default, in its
discretion and without notice to the Guarantor, to transfer to or to
register in the name of the Trustee or any of its nominees any or all of
the Collateral. In addition, the Trustee shall have the right at any
time to exchange certificates or instruments representing or evidencing
Collateral for certificates or instruments of different denominations.
Section c. Representations and Warranties.
- --------- ------------------------------
The Guarantor hereby represents and warrants as follows:
(1) It is the legal, record and beneficial owner of the
Pledged Shares and has good and valid title thereto free and clear of
any Lien, except for the Lien created by this Indenture. No Collateral
on the date hereof is evidenced by promissory notes, certificates or
other instruments which have not been delivered to the Trustee.
(2) It has all requisite corporate power and authority to
execute and deliver this Indenture, perform its obligations hereunder
and carry out the provisions and conditions hereof (including, without
limitation, the creation and perfection of the security
70
interest in the Collateral); and this Indenture has been duly authorized
and validly executed and delivered by it, and constitutes the legal,
valid and binding obligation of the Guarantor enforceable against it in
accordance with its terms, except as such enforcement may be subject to
or limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights and remedies generally and (ii) general principles of equity
(regardless of whether such enforcement may be sought in a proceeding in
equity or at law).
(3) The pledge, assignment and delivery of the Collateral
pursuant to this Indenture creates a valid and continuing Lien on and
perfected first priority security interest in the Collateral in favor of
the Trustee for the benefit of the Holders and the Trustee, superior and
prior to the rights of all other Persons therein and subject to no other
Liens other than a financing statement filed with respect to the Pledged
Shares under the Increasing Rate Note Indenture.
(4) The Pledged Shares constitute all of the Capital Stock
of the Company owned by the Guarantor; and there are no outstanding
rights (including, without limitation, preemptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable for,
any shares of Capital Stock or other equity interest of or in the
Company or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any such Capital
Stock, any such convertible or exchangeable securities or any such
rights, warrants or options.
(5) The Pledged Shares represent on the date hereof all of
the issued and outstanding shares of Capital Stock of the Company, and
such shares of Capital Stock have been duly authorized and validly
issued for good and valuable consideration and are fully paid and non-
assessable.
(6) None of the Pledged Shares is "margin stock" as such
term is defined in Section 221.1 of Regulation U of the Board of
Governors of the Federal Reserve System.
(7) The Guarantor has no direct Subsidiaries other than the
Company.
Section d. Further Assurances.
- --------- ------------------
(1) The Guarantor agrees that at any time and from time to
time, at the expense of the Guarantor, the Guarantor will promptly
execute and deliver all further instruments and documents and take all
further action that may be necessary or that the Trustee may reasonably
request in order to perfect and protect any Lien granted or purported to
be granted hereby or to enable the Trustee to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without
limiting the foregoing, the Guarantor shall, at the time of any
acquisition of additional shares of Capital Stock of the Company
constituting Pledged Shares pursuant to Section 11.1, provide to the
Trustee a
71
revised Schedule I to reflect any changes made necessary by such
acquisition.
(2) The Guarantor shall have the right from time to time to
execute and deliver in favor of the Trustee for the benefit of the
Holders one or more instruments or other documents evidencing or
providing for additional security for the Securities, which may be in
the form of a pledge of collateral, a negative pledge or otherwise. Any
such instrument or document shall be effective without requiring
execution or delivery by the Trustee and may be terminated pursuant to
the terms thereof by written notice to the Trustee.
Section e. Dividends; Voting Rights.
- --------- ------------------------
(1) As long as no Event of Default shall have occurred and
be continuing:
(a) The Guarantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Shares or
any part thereof for any purpose not inconsistent with the terms of this
Indenture; provided, however, that no vote shall be cast or consent,
-------- -------
waiver or ratification given or action taken that would (x) directly or
indirectly impair the value of any of the Pledged Shares, (y) be
inconsistent with or violate any provision of this Indenture or (z)
approve any merger or consolidation with or any sale of all or
substantially all of the assets of the Company except as otherwise
provided by the terms of this Indenture;
(b) The Guarantor shall be entitled to receive and retain,
and to utilize free and clear of the Lien of this Indenture, any and all
dividends or distributions paid with respect to any of the Pledged
Shares; provided, however, that any and all
-------- -------
i. dividends and other distributions paid or
payable other than in cash with respect to, and instruments and
other property received, receivable or otherwise distributed
with respect to, or in exchange for, any such Pledged Shares;
ii. dividends, cash, instruments and other property
and proceeds received, receivable or otherwise distributed on
any Pledged Shares constituting any liquidating dividend or
other liquidating distribution, whether or not in connection
with a reduction of capital, capital surplus or paid-in surplus,
or other similar extraordinary dividend or distribution; and
iii. cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Shares
shall be, and shall be forthwith delivered to the Trustee to hold as,
Collateral and be subject to the Lien of this Indenture and shall, if
received by the Guarantor, be received in trust for the benefit of the
Trustee, be segregated from the other property or funds of the
Guarantor, and be forthwith delivered to the Trustee as Collateral (with
any necessary
72
endorsement and accompanied by any documentation necessary to ensure and
evidence that a first priority security interest is being created
therein); and
(c) in order to permit the Guarantor to exercise the voting
and other rights which it is entitled to exercise pursuant to Section
11.5(a)(i) above and to receive the dividends and other payments which
it is authorized to receive and retain pursuant to Section 11.5(a)(ii)
above, the Trustee shall, if necessary, upon request of the Guarantor,
execute and deliver (or cause to be executed and delivered) to the
Guarantor all such proxies, payment orders and other instruments as the
Guarantor may reasonably request for such purposes as shall be specified
in such request.
Until actually paid, all rights to any such dividends, distributions
and other payments shall remain subject to the Lien of this Indenture.
(2) Upon the occurrence and during the continuance of an
Event of Default:
(a) all rights of the Guarantor to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant to Section 11.5(a)(i) above shall cease, and all such rights
shall thereupon become vested in the Trustee, which shall thereupon have
the sole right to exercise such voting and other consensual rights
during the continuance of such Event of Default;
(b) all rights of the Guarantor to receive the dividends,
distributions and other payments which it would otherwise be authorized
to receive and retain pursuant to Section 11.5(a)(ii) above shall cease
and all such rights shall thereupon become vested in the Trustee, which
shall thereupon have the sole right to receive and hold as Collateral
such dividends, distributions and other payments during the continuance
of such Event of Default, and all such dividends, distributions, and
other payments shall be forthwith delivered to the Trustee to hold as
Collateral and be subject to the Lien of this Indenture and shall be
segregated from all other Collateral; and
(c) in order to permit the Trustee to exercise the voting
and other consensual rights which it may be entitled to exercise
pursuant to Section 11.5(b)(i) above, and to receive all dividends,
distributions and other payments which it may be entitled to receive
under Section 11.5(b)(ii) above, the Guarantor shall, if necessary, upon
written notice from the Trustee, from time to time execute and deliver
to the Trustee all such proxies, payment orders and other instruments as
the Trustee may reasonably request.
(3) Upon the cure or waiver of any such Event of Default, so
long as no other Event of Default has occurred and is continuing, all
rights of the Guarantor to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant to Section
11.5(b)(i) above, and to receive dividends, distributions and other
payments pursuant to Section 11.5(a)(ii) above shall revert to the
Guarantor.
73
(4) All dividends, distributions and other payments which
are received by the Guarantor contrary to the provisions of Section
11.5(b)(ii) above shall be received in trust for the benefit of the
Trustee, shall be segregated from other funds of the Guarantor and shall
be forthwith paid over to the Trustee as Collateral in the same form as
received by the Guarantor (duly endorsed by the Guarantor to the
Trustee, if required) to be held as Collateral.
(5) The Trustee may join in any plan of voluntary or
involuntary reorganization or readjustment or rearrangement in respect
of any Pledged Shares or the Company and may accept or authorize the
acceptance of new securities issued in exchange therefor under any such
plan. Any new securities so issued shall be deposited and pledged with
the Trustee under this Indenture.
Section f. Trustee Appointed Attorney-in-Fact.
- --------- ----------------------------------
The Guarantor hereby appoints the Trustee as the Guarantor's
attorney-in-fact, with full authority in the place and stead of the Guarantor
and in the name of the Guarantor or otherwise, from time to time in the Trustee
s discretion, to take any action and to execute any instrument which the Trustee
may deem necessary or advisable in order to accomplish the purposes of this
Article 11, including to receive, endorse and collect all instruments made
payable to the Guarantor representing any dividend, interest payment or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same. This power, being coupled with an interest, is
irrevocable.
Section g. Trustee May Perform.
- --------- -------------------
If the Guarantor fails to perform any agreement contained in this
Article 11, the Trustee may, but shall not be obligated to, itself perform, or
cause performance of, such agreement, and the reasonable expenses of the Trustee
incurred in connection therewith shall be payable by the Guarantor under Section
7.7.
Section h. Trustee's Duties.
- --------- ----------------
The powers conferred on the Trustee under this Article 11 are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received and/or disbursed by
it hereunder, the Trustee shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.
74
Section i. Remedies upon Event of Default.
- --------- ------------------------------
If any Event of Default shall have occurred and be continuing, the
Trustee may sell the Collateral as an entirety or in any such portions as the
Holders of a majority in aggregate principal amount of the Securities then
outstanding shall request in writing, or in the absence of such request, in such
manner as the Trustee deems appropriate. In addition to the other rights and
remedies provided for herein or otherwise available to it, the Trustee may
exercise, as provided in the preceding sentence, all the rights and remedies
provided a secured party upon the default of a debtor under the Uniform
Commercial Code (as in effect in the relevant jurisdiction) at that time.
Any sale of Collateral pursuant to this Section 11.9 may be without
notice, except as specified below, may consist of any part of or all of the
Collateral and may be in one or more parcels at public or private sale, at any
exchange, broker's board or any of the Trustee's offices or elsewhere, for cash,
on credit or for future delivery, upon such terms as the Trustee may determine
to be commercially reasonable, and the Trustee or any Securityholder may be the
purchaser of any or all of the Collateral so sold and shall thereafter hold the
same, absolutely, free from any right or claim of whatsoever kind. The Guarantor
agrees that, to the extent notice of sale shall be required by law, at least 5
days' notice to the Guarantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Trustee shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Trustee may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. The Guarantor hereby waives any claims
against the Trustee arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Trustee accepts the
first offer received and does not offer such Collateral to more than one
offeree.
The Guarantor hereby waives, to the extent permitted by applicable law,
notice (other than the notice described in the preceding paragraph) or judicial
hearing in connection with the Trustee's disposition of any Collateral,
including, without limitation, any and all prior notice and hearing for any
prejudgment remedy or remedies and any such right which the Guarantor would
otherwise have under law, and the Guarantor hereby further waives, to the extent
permitted by law: (a) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the Trustee's
rights hereunder and (b) all rights of redemption, appraisal, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law. Any
sale of, or the grant of options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of the Guarantor therein and thereto, and shall be a
perpetual bar both at law and in equity against the Guarantor and against any
and all Persons claiming or attempting to claim the Collateral so sold, optioned
or realized upon, or any part thereof, from, through and under the Guarantor.
The Guarantor recognizes that, by reason of certain prohibitions
contained in the
75
Securities Act and applicable state securities laws, the Trustee may be
compelled, with respect to any sale of all or any part of the Collateral, to
limit purchasers to those who will agree, among other things, to acquire such
securities for their own account, for investment, and not with a view to the
distribution or resale thereof. The Guarantor acknowledges and agrees that any
such sale may result in prices and other terms less favorable to the seller than
if such sale were a public sale without such restrictions and, notwithstanding
such circumstances, agrees that any such sale shall be deemed to have been made
in a commercially reasonable manner. The Trustee shall be under no obligation to
delay the sale of any of the Collateral for the period of time necessary to
permit the Company to register any securities constituting such Collateral for
public sale under the Securities Act, or under applicable state securities laws,
even if the Company would agree to do so; provided, however, in the event that
-------- -------
the Trustee determines that it is advisable to register under or otherwise
comply in any way with the Securities Act or any similar federal or state law,
or if such registration or compliance is required with respect to all or any
part of the Collateral prior to the sale thereof by the Trustee, the Guarantor
will use its best efforts to cause such registration to be effectively made and
will reimburse the Trustee and the Holders for any and all reasonable expenses
incurred by any of them, including, without limitation, reasonable attorneys'
and accountants' fees and expenses, printing fees and filing fees in connection
therewith.
The Guarantor further agrees to do or cause to be done all such other
acts and things as may be reasonably necessary to make such sale or sales of any
portion or all of the Collateral valid and binding and in compliance with any
and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental bodies having
jurisdiction over any such sale or sales, all at the Guarantor's expense.
Section j. Application of Proceeds.
- --------- -----------------------
Upon the occurrence and during the continuance of an Event of Default
(so long as such acceleration has not been rescinded), any cash held by the
Trustee as Collateral and all cash proceeds received by the Trustee in respect
of any sale of, collection from or other realization upon all or any part of the
Collateral shall be applied by the Trustee in the manner specified in Section
6.10.
Section k. Continuing Lien.
- --------- ---------------
Except as provided in Section 11.13, this Indenture shall create a
continuing Lien on the Collateral that shall (i) remain in full force and effect
until payment in full of the Securities and any other amounts owing under this
Indenture pursuant to Section 7.7, (ii) be binding upon the Guarantor and its
successors and assigns and (iii) inure to the benefit of the Trustee and its
successors, transferees and assigns.
Section l. Certificates and Opinions.
- --------- -------------------------
The Guarantor shall comply with (a) TIA (S) 314(b), relating to
Opinions of Counsel
76
regarding the Lien of this Indenture and (b) TIA (S) 314(d), relating to, among
other matters, the release of Collateral from the Lien of this Indenture and
Officers' Certificates or other documents regarding fair value of the
Collateral, to the extent such provisions are applicable. Any certificate or
opinion required by TIA (S) 314(d) may be executed and delivered by an Officer
of the Guarantor to the extent permitted by TIA (S) 314(d).
Section m. Release; Other Liens.
- --------- --------------------
(a) Upon satisfaction by the Company of the conditions set forth in
Article 8 to its legal defeasance option, its covenant defeasance option or to
the discharge of this Indenture, the Lien of this Indenture on all the
Collateral shall terminate and all the Collateral shall be released without any
further action on the part of the Trustee or any other Person. Upon the release
of any Collateral, the Trustee shall execute and deliver to the Guarantor an
instrument or instruments acknowledging the release of such Collateral from this
Indenture and the discharge of the Lien on such Collateral created by this
Article 11, and will duly assign, transfer and deliver to or upon the order of
the Guarantor (without recourse and with out any representation or warranty)
such Collateral.
(b) The Guarantor shall not create or suffer to exist any Lien upon
or with respect to any of the Pledged Shares, except for the security interests
created by this Indenture.
ARTICLE 12.
MISCELLANEOUS
Section a. Trust Indenture Act Controls.
- --------- ----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section b. Notices.
- --------- -------
Any notice or communication by the Company, the Guarantor or the
Trustee shall be 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 addressed as
follows:
77
if to the Company:
Shoppers Food Warehouse Corp.
4600 Forbes Blvd.
Lanham, MD 20706
Attention: President
with a copy to:
Dart Group Corporation
3300 75th Avenue
Landover, MD 20785
Attention: Corporate Secretary
if to the Guarantor:
SFW Holding Corp.
3300 75th Avenue
Landover, MD 20785
Attention: President
if to the Trustee:
Norwest Bank Minnesota, National Association
6th Street & Marquette Avenue
Minneapolis, MN 55479-0069
Attention: Corporate Trust Department
The Company, the Guarantor or the Trustee by notice to each other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) 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 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 a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or 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 to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Securityholder or any defect in it shall
not affect its sufficiency with respect to other Securityholders.
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If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
received it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
Section c. Communication by Holders with Other Holders.
- --------- -------------------------------------------
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S) 312(c).
Section d. 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:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
Section e. Statements Required in Certificate or Opinion of Counsel.
- --------- --------------------------------------------------------
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
i. a statement that the Person making such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
ii. a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are based;
iii. a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
iv. a statement as to whether or not, in the opinion of such
Person, such
79
condition or covenant has been complied with; provided, however, that,
-------- -------
with respect to certain matters of fact not involving any legal
conclusion, an Opinion of Counsel may, upon the consent of the parties
relying on such opinion, rely on an Officers' Certificate or
certificates of public officials.
Section f. Rules by Trustee and Agents.
- --------- ---------------------------
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section g. Legal Holidays.
- --------- --------------
If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
Section h. No Recourse Against Others.
- --------- --------------------------
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation including with respect to any
certificates delivered thereunder or hereunder. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.
Section i. Counterparts.
- --------- ------------
This Indenture 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.
Section j. Governing Law.
- --------- -------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY AND THE GUARANTOR HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS
80
INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPT FOR THEMSELVES AND IN
RESPECT OF THEIR PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS. THE COMPANY AND THE GUARANTOR IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY
AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OR THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE TRUSTEE OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
Section k. No Adverse Interpretation of Other Agreements.
- --------- ---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section l. Successors.
- --------- ----------
All agreements of the Company in this Indenture and the Securities
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
Section m. Severability.
- --------- ------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section n. Table of Contents, Headings, Etc.
- --------- --------------------------------
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the date first written above.
SHOPPERS FOOD WAREHOUSE CORP.
By: /s/ MARK A. FLINT
---------------------------------
Name: Mark A. Flint
Title: President and Chief
Executive Officer
Attest:
/s/ ELLIOT R. ARDITTI
- ----------------------------------
Name:
SFW HOLDING CORP.
By: /s/ MARK A. FLINT
---------------------------------
Name: Mark A. Flint
Title: President
Attest:
/s/ ELLIOT R. ARDITTI
- ----------------------------------
Name:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ RAYMOND S. HAVERSTOCK
---------------------------------
Name: Raymond S. Haverstock
Title: Vice President
82