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EXHIBIT 4.1
SFW ACQUISITION CORP.
Increasing Rate Senior Notes due 2000
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INDENTURE
Dated as of February 6, 1997
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SFW HOLDING CORP.
Guarantor
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
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TABLE OF CONTENTS
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.......................................14
Section 1.4. Rules of Construction...................................................................15
ARTICLE 2. THE SECURITIES...........................................................................................15
Section 2.1. Form and Dating.........................................................................15
Section 2.2. Execution and Authentication............................................................16
Section 2.3. Registrar and Paying Agent..............................................................17
Section 2.4. Paying Agent to Hold Money in Trust.....................................................17
Section 2.5. Holder Lists............................................................................18
Section 2.6. Transfer and Exchange...................................................................18
Section 2.7. Replacement Securities..................................................................19
Section 2.8. Outstanding Securities..................................................................19
Section 2.9. Treasury Securities.....................................................................20
Section 2.10. Temporary Securities....................................................................20
Section 2.11. Cancellation............................................................................20
Section 2.12. Defaulted Interest......................................................................21
Section 2.13. Deposit of Moneys.......................................................................21
Section 2.14. CUSIP Number............................................................................21
Section 2.15. Restrictive Legends.....................................................................21
Section 2.16. Book-Entry Provisions for Global Security...............................................24
Section 2.17. Special Transfer Provisions.............................................................25
ARTICLE 3. REDEMPTION...............................................................................................27
Section 3.1. Notices to Trustee......................................................................27
Section 3.2. Selection of Securities to be Redeemed..................................................27
Section 3.3. Notice of Redemption....................................................................27
Section 3.4. Effect of Notice of Redemption..........................................................28
Section 3.5. Deposit of Redemption Price.............................................................28
Section 3.6. Securities Redeemed in Part.............................................................28
ARTICLE 4. COVENANTS................................................................................................29
Section 4.1. Payment of Securities...................................................................29
Section 4.2. SEC Reports.............................................................................29
Section 4.3. Compliance Certificate..................................................................29
Section 4.4. Stay, Extension and Usury Laws..........................................................30
Section 4.5. Limitation on Restricted Payments.......................................................31
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Section 4.6. Continued Existence.....................................................................32
Section 4.7. Limitation on Indebtedness..............................................................33
Section 4.8. Taxes...................................................................................34
Section 4.9. Repurchase at Holder's Option Upon Change in Control....................................34
Section 4.10. Limitation on Transactions with Affiliates..............................................36
Section 4.11. Limitation on Lines of Business.........................................................37
Section 4.12. Dividends and Other Payment Restrictions Affecting Subsidiaries.........................37
Section 4.13. Further Assurance to the Trustee........................................................38
Section 4.14. Limitation on Investments, Loans and Advances...........................................38
Section 4.15. Limitation on Liens.....................................................................38
Section 4.16. Maintenance of Office or Agency.........................................................39
Section 4.17. Tax Sharing Agreement...................................................................39
Section 4.18. Management Services Agreement...........................................................40
Section 4.19. The Merger with Shoppers................................................................40
Section 4.20. Limitation on Asset Sales...............................................................40
Section 4.21. Repayment of Bridge Loan................................................................42
Section 4.22. Limitation on Issuance and Sale of Capital Stock of Subsidiaries........................42
ARTICLE 5. SUCCESSORS...............................................................................................43
Section 5.1. When Company May Merge. etc.............................................................43
Section 5.2. Successor Corporation Substituted.......................................................44
ARTICLE 6. DEFAULTS AND REMEDIES....................................................................................44
Section 6.1. Events of Default.......................................................................44
Section 6.2. Acceleration............................................................................45
Section 6.3. Other Remedies..........................................................................46
Section 6.4. Waiver of Existing and Past Defaults....................................................46
Section 6.5. Control by Majority.....................................................................46
Section 6.6. Limitation on Suits.....................................................................47
Section 6.7. Rights of Holders to Receive Payment....................................................47
Section 6.8. Collection Suit by Trustee..............................................................47
Section 6.9. Trustee May File Proofs of Claim........................................................48
Section 6.10. Priorities..............................................................................48
Section 6.11. Undertaking for Costs...................................................................48
Section 6.12. Rights and Remedies Cumulative..........................................................48
Section 6.13. Delay or Omission Not Waiver............................................................49
ARTICLE 7. TRUSTEE..................................................................................................49
Section 7.1. Duties of Trustee.......................................................................49
Section 7.2. Rights of Trustee.......................................................................50
Section 7.3. Individual Rights of Trustee............................................................51
Section 7.4. Trustee's Disclaimer....................................................................51
Section 7.5. Notice of Defaults......................................................................51
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Section 7.6. Reports by Trustee to Holders...........................................................52
Section 7.7. Compensation and Indemnity..............................................................52
Section 7.8. Replacement of Trustee..................................................................53
Section 7.9. Successor Trustee by Merger, etc........................................................54
Section 7.10. Eligibility; Disqualification...........................................................54
Section 7.11. Preferential Collection of Claims Against Company.......................................54
ARTICLE 8. DISCHARGE OF INDENTURE...................................................................................54
Section 8.1. Termination of Company's Obligations....................................................54
Section 8.2. Legal Defeasance and Covenant Defeasance................................................55
Section 8.3. Application of Trust Money..............................................................59
Section 8.4. Repayment to Company....................................................................59
Section 8.5. Reinstatement...........................................................................59
ARTICLE 9. AMENDMENTS...............................................................................................60
Section 9.1. Without Consent of Holders..............................................................60
Section 9.2. With Consent of Holders.................................................................61
Section 9.3. Compliance with Trust Indenture Act.....................................................62
Section 9.4. Revocation and Effect of Consents.......................................................62
Section 9.5. Notation on or Exchange of Securities...................................................63
Section 9.6. Trustee Protected.......................................................................63
ARTICLE 10. GUARANTEE................................................................................................63
Section 10.1. Guarantee...............................................................................63
Section 10.2. Limitation on Liability.................................................................65
Section 10.3. Successors and Assigns..................................................................65
Section 10.4. No Waiver...............................................................................65
Section 10.5. Modification............................................................................66
Section 10.6. Execution and Delivery of Guarantee.....................................................66
Section 10.7. Certain Bankruptcy Events...............................................................66
ARTICLE 11. SECURITY AND PLEDGE OF COLLATERAL........................................................................67
Section 11.1. Grant of Security Interest..............................................................67
Section 11.2. Delivery of Collateral..................................................................68
Section 11.3. Representations and Warranties..........................................................68
Section 11.4. Further Assurances......................................................................69
Section 11.5. Dividends; Voting Rights................................................................70
Section 11.6. Trustee Appointed Attorney-in-Fact......................................................72
Section 11.7. Trustee May Perform.....................................................................72
Section 11.8. Trustee's Duties........................................................................72
Section 11.9. Remedies upon Event of Default..........................................................72
Section 11.10. Application of Proceeds.................................................................74
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Section 11.11. Continuing Lien.........................................................................74
Section 11.12. Certificates and Opinions...............................................................74
Section 11.13. Release; Other Liens....................................................................75
ARTICLE 12. MISCELLANEOUS............................................................................................75
Section 12.1. Trust Indenture Act Controls............................................................75
Section 12.2. Notices.................................................................................75
Section 12.3. Communication by Holders with Other Holders.............................................77
Section 12.4. Certificate and Opinion as to Conditions Precedent......................................77
Section 12.5. Statements Required in Certificate or Opinion of Counsel................................77
Section 12.6. Rules by Trustee and Agents.............................................................78
Section 12.7. Legal Holidays..........................................................................78
Section 12.8. No Recourse Against Others..............................................................78
Section 12.9. Counterparts............................................................................78
Section 12.10. Governing Law...........................................................................78
Section 12.11. No Adverse Interpretation of Other Agreements...........................................79
Section 12.12. Successors..............................................................................79
Section 12.13. Severability............................................................................79
Section 12.14. Table of Contents, Headings. Etc........................................................79
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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 February 6, 1997, by and among SFW Acquisition
Corp., a Delaware corporation (the "Company"), SFW Holding Company, 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
Increasing Rate Senior Notes due 2000:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Acquired Indebtedness" means (i) with respect to any Person that
becomes a Subsidiary of the Company (or is merged with or into the Company or
any of its Subsidiaries) after the Issue Date, Indebtedness of such Person or
any of its subsidiaries existing at the time such Person becomes a Subsidiary of
the Company (or is merged with or into the Company or any of its Subsidiaries)
and which was not incurred in connection with, or in contemplation of, such
Person becoming a Subsidiary of the Company (or being merged with or into the
Company or any of its Subsidiaries) and (ii) with respect to the Company or any
of its Subsidiaries, any Indebtedness assumed by the Company or any of its
Subsidiaries in connection with the acquisition of any assets from another
Person (other than the Company or any of its Subsidiaries), and which was not
incurred by such other Person in connection with, or in contemplation of, such
acquisition.
"Acquisition" means the acquisition by the Company for $210 million in
cash of the remaining 50% of the issued and outstanding shares of Capital Stock
of Shoppers that is not currently owned by the Company.
"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 resulting from the
Acquisition.
"Affiliate" means, as applied to any Person, any other Person directly
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
successor thereto.
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"Asset Acquisition" means (i) any capital contribution (by means of
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 Subsidiaries,
pursuant to which such Person shall become a Subsidiary of the Company or any of
its Subsidiaries or shall be merged with or into the Company or any of its
Subsidiaries or (ii) any acquisition by the Company or any of its 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
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 Subsidiaries to any Person
other than such Person or one of its Wholly Owned Subsidiaries (or, in the case
of a sale, transfer or other disposition by a Subsidiary, to any Person other
than the Company or a directly or indirectly Wholly Owned Subsidiary) of any
assets of such Person or any of its Subsidiaries including, without limitation,
assets consisting of any Capital Stock or other securities held by such Person
or any of its Subsidiaries, and any Capital Stock issued by any 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 Subsidiaries of $250,000 or less or (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
Shoppers or (iii) the lease or sublease of any real or personal property in the
ordinary course of business or (iv) the proceeds of such Asset Sale which are
not applied in accordance with Section 4.20 and which, together with all other
such Asset Sale proceeds do not exceed $5 million.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
any committee of the Board 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.
"Bridge Loan" means up to $75 million in bridge financing expected to
be provided by NationsBank, N.A. to the Company to fund the Acquisition.
"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 date of this Indenture, and
any and all rights, warrants or options exchangeable into such capital stock.
"Capitalized Lease Obligation" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required to be classified
and accounted for as a capital lease obligation under GAAP, and, for the purpose
of 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, (ii) commercial paper rated the highest
grade by Moody's and 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 million 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 million, 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 prior, 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, 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 Net Income" means, with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that (a) the Net Income of any Person (the "other Person") in
which the Person in question or one of its 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
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distributions paid to the Person in question or one of its Subsidiaries, (b) the
Net Income of any 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 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.
"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 Subsidiary of such Person subsequent to the Issue
Date.
"Credit Facility" means Shoppers' uncommitted, revolving
line-of-credit facility with NationsBank, N.A. in the aggregate principal amount
at any time outstanding not to exceed $35,000,000, and any replacement, renewal,
refinancing or extension thereof of up to $35,000,000, provided that such
replacement, renewal, refinancing or extension is in accordance with Section
4.7(c)(ii).
"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
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redeemable at the option of the holder thereof, in whole or in part, on or prior
to the Stated Maturity of the Securities.
"EBITDA" 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, interest income and 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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Exchange Notes" means Indebtedness of Shoppers 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 Shoppers in exchange for such Securities.
"Exchange Offer" means the offer by the Company and the Guarantor to
exchange the Exchange Notes and Guarantee thereof for the Securities issued on
the Issue Date and Guarantee thereof made pursuant to the Registration Rights
Agreement.
"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
(each, a "Period") for which financial information is available; provided,
however, that for any Periods occurring during a 53-week fiscal year, the term
of such Periods will be adjusted accordingly.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date hereof 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.
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"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.
"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 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 ninety (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.
"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).
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"Indenture" means this Indenture as amended or supplemented from time
to time in accordance with the terms hereof.
"Interest Coverage Ratio" means, for any Person, on a consolidated
basis, the ratio of (i) EBITDA for such Person and its Subsidiaries during the
Four Quarter Period immediately preceding the date of the incurrence of the
proposed Indebtedness giving rise to the need to calculate the Interest Coverage
Ratio (the "Transaction Date") to (ii) Interest Expense of such Person for such
Four Quarter Period. For purposes of this definition, "EBITDA" 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 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 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 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 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 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 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.
"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; minus, (iii) the excess, if any of (a)
the interest expense calculated on a straight-line basis for increasing-rate
indebtedness on a pro forma basis for any period over (b) the interest expense
calculated in accordance with the actual interest rate scheduled for the period,
or plus (iv) the excess, if any of (a) the interest expense calculated in
accordance with the actual interest rate
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scheduled for the period over (b) the interest expense calculated on a straight
line basis for increasing-rate indebtedness on a pro forma basis for any period.
"Interest Payment Date" shall have the meaning assigned to such term
in paragraph 1 of the Securities.
"Investment" means any direct or indirect advance, loan or other
extension of credit or capital contribution to such other 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 as
otherwise, to resell such property to such other Person), or any commitment to
make any such advance, loan, extension or capital contribution (but excluding
accounts receivable in the ordinary course) or any purchase or acquisition
(whether for cash, property, services, securities or otherwise) of, Capital
Stock, bonds, notes, debentures, options, warranty or similar instruments issued
by any Person from such other Person or the designation by the Board of
Directors of the Company or any 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, and any property transferred to an
Unrestricted Subsidiary from the Company or one of its Subsidiaries, shall be
deemed an Investment valued at its fair market value, 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 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 as of the date of the Acquisition, between Dart and the Company.
"Maturity Date" means February 6, 2000.
"Merger" means the merger under Delaware Law of the Company with and
into Shoppers which is to occur as soon as practicable after the Acquisition but
in no event more than 15 days
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following the Acquisition, pursuant to which Shoppers shall become a successor
to the Company under Section 5.2 of this Indenture.
"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
such Person for or into shares of Capital Stock of the Company, the sum of (i)
the fair market value of the proceeds received by the 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.
"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); and (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 $140,000,000 aggregate
principal amount of its Increasing Rate Senior Notes due 2000.
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"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 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 1 year or less issued by United States commercial banks having
capital and surplus in excess of $100,000,000; (ii) commercial paper with a
grade of no less than A-1 or the equivalent thereof by S&P or P-1 or the
equivalent thereof by Moody's; (iii) direct obligations of the United States
Government or a United States agency with a maturity of 1 year or less; (iv)
money market with a rating of A or greater; and (v) shares of money market
mutual or similar funds having assets in excess of $100,000,000.
"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 and if a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have 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
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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 materially
interfere with the ordinary conduct of the business of such Person or any of its
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 the Company or of any of its
Subsidiaries or which do not in any case materially detract from the value of
the property subject thereto (as such property is used by the Company or one or
more of its Subsidiaries); (k) liens arising from filing precautionary UCC
financing statements relating solely to leases not prohibited by this Indenture;
and (l) liens arising in connection with Permitted Secured Indebtedness.
"Permitted Secured Indebtedness" means (a) Capitalized Lease
Obligations of the Company incurred in the ordinary course of business; (b) any
Indebtedness secured by purchase money Liens upon or in any property either
acquired by the Company in the ordinary course of business with the proceeds
thereof or assumed by the Company 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 property other than the property being acquired and
(ii) the Fair Market Value of the property being acquired is greater than or
equal to the amount of such purchase money Lien; (c) any Indebtedness of the
Company pursuant to the Bridge Loan; and (d) any Indebtedness of the Company
pursuant to the Credit Facility.
"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.
"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 Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act.
"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.
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"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.
"Shoppers" means Shoppers Food Warehouse Corp., a Delaware
corporation.
"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 date hereof.
"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 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; for purposes of this Indenture, no Unrestricted Subsidiary shall be a
subsidiary of the Company or any of its Subsidiaries.
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"Tax Sharing Agreement" means the Tax Sharing Agreement dated as of
the date of the Acquisition, between Dart and the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of execution of this Indenture, except as
otherwise provided in Section 9.3.
"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.
"Trust Officer" means any officer or corporate trust assistant officer
of the Trustee assigned by the Trustee to administer its corporate trust
matters.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
(other than the Subsidiaries of Shoppers existing as of the date hereof 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 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
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shall have delivered to the Trustee an Officers' Certificate indicating that
such designation complies with the foregoing conditions.
"Wholly Owned Subsidiary" of any Person means a 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
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person.
Section 1.2. 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
"DTC"...............................................................................................................2.1
"Event of Default"..................................................................................................6.1
"Net Cash Proceeds Offer"..........................................................................................4.20
"Obligations"......................................................................................................10.1
"Paying Agent"......................................................................................................2.3
"Permitted Indebtedness"............................................................................................4.7
"Pledged Shares"...................................................................................................11.1
"Private Placement Legend".........................................................................................2.15
"Proceeds Purchase Date"...........................................................................................4.20
"Registrar".........................................................................................................2.3
"Repurchase Date"...................................................................................................4.9
"Restricted Payments"...............................................................................................4.5
"Secured Obligations"..............................................................................................11.1
"U.S. Government Obligations".......................................................................................8.2
"Voting Trustee"....................................................................................................4.9
Section 1.3. 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.
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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 1.4. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural,
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time.
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ARTICLE 2.
THE SECURITIES
Section 2.1. 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.
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Section 2.2. 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 one
hundred forty million dollars ($140,000,000) 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 one hundred forty million dollars ($140,000,000), 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 2.3. 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
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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 4.20, 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 2.4. 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 2.5. 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 Section 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 Section 312(a).
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Section 2.6. 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, 3.6,
4.9, 4.20 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 2.7. 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.
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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 or stolen Securities.
Section 2.8. 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 2.9. 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 by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities that a Trust Officer of the
Trustee knows are so owned shall be so disregarded.
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Section 2.10. 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
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 2.11. 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 2.12. 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.
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Section 2.13. 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 the Holders on such
Interest Payment Date or maturity date, as the case may be.
Section 2.14. 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 2.15. 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 third 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 UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN
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THREE 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, (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 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 THREE YEARS
AFTER THE ORIGINAL ISSUANCE OF THE 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."
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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 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 2.16. Book-Entry Provisions for Global Security.
(a) 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
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foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Security.
(b) Transfers of 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
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Section 2.17. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited
Investors and Non-U.S. Persons. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to any Institutional Accredited Investor which is not a
QIB or to any non-U.S. Person:
(i) 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 third 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 third 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
(ii) 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.
(b) Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed transfer of a Security
constituting a Restricted Security to a QIB (excluding transfers to non-U.S.
Persons):
(i) 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
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144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A; and
(ii) 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.
(c) 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.
(d) 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 3.1. Notices to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 5 of the Securities, it shall notify the
Trustee of the redemption date, the principal amount of Securities to be
redeemed and the redemption price.
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The Company shall give each notice provided for in this Section 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 3.2. 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. 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. The Trustee may select for redemption portions of the principal
amount of Securities that have denominations larger than $1,000. Securities and
portions of them it selects shall be in amounts of $1,000 or 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 3.3. 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:
(1) the redemption date;
(2) the redemption price;
(3) 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;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(6) that interest on Securities called for redemption
ceases to accrue on and after the redemption date; and
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(7) 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 3.4. 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 3.5. 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.
Section 3.6. 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 4.1. 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 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.
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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 4.2. SEC Reports.
(a) 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 the Holders of Securities with such
quarterly and annual reports and such information, documents and other reports
specified in Sections 13 and 15(d) of the Exchange Act. The Company also shall
comply with the other provisions of TIA Section 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
of Securities, 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 4.3. 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 year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
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 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.
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The Company will, 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 above shall be accompanied by
a written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention 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 4.4. 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.
Section 4.5. Limitation on Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) 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);
(2) 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 Subsidiary of the Company);
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(3) 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: (a) Permitted Secured Indebtedness;
and (b) Permitted Indebtedness, in each case 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 or Permitted Secured Indebtedness (other than the Credit
Facility) to be scheduled to mature at a date earlier than the Stated
Maturity of the Indebtedness being amended;
(4) 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 Subsidiary (other than dividends or distributions payable in
Capital Stock (other than Disqualified Stock) of it or the Company);
or
(5) 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:
(i) no Default or Event of Default shall have occurred
and be continuing or shall occur as a consequence
thereof; and
(ii) such Restricted Payment, together with the
aggregate of all other Restricted Payments made by
the Company and its Restricted Subsidiaries after
the date hereof (including Restricted Payments
permitted by the next succeeding paragraph), is
less than the aggregate of (A) 50% of the aggregate
Adjusted Consolidated Net Income of the Company for
the period from and including January 1, 1997 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
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) the
repayment of the Bridge Loan, plus interest thereon; (ii) the payment of fees
and expenses associated with the Offering, the Bridge Loan, the Acquisition, the
Merger and related transactions that are either payable by the Company or to be
reimbursed by the Company to Dart; (iii) the payment as soon as practicable
after the Acquisition, but in no event more than 15 days thereafter, of a
$10,000,000 dividend by the Company; (iv) the payment of any dividend within 60
days after the
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date of declaration thereof, if at the record date for such dividend such
payment would have complied with the provisions of this Indenture; and (v) 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 the repayment of the Bridge Loan, the payment of
the fees and expenses associated with the Offering, the Bridge Loan, plus
interest thereon, the Acquisition, the Merger and related transactions that are
either payable by the Company or to be reimbursed by the Company to Dart, the
payment of the $10,000,000 dividend and the redemption, repurchase, retirement
or other acquisition made in accordance with clauses (i), (ii), (iii) and (v)
above, respectively, 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 4.6. 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 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 4.7. 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 (each of which shall be given independent effect):
(a) Indebtedness of the Company under the Securities
and this Indenture;
(b) Permitted Secured Indebtedness;
(c) any replacements, renewals, refinancings and
extensions of Indebtedness incurred under clauses (a) and (b) above
(other than the Bridge Loan), 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
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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 there 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 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 Restricted
Subsidiaries of the Company in an aggregate principal amount not to
exceed $20,000,000 in the aggregate at any one time outstanding
provided that (i) such Indebtedness shall be either contractually
subordinated to or rank pari passu with the Securities and (ii) no
scheduled installment or other required payment of principal or
interest on any such Indebtedness shall be due and payable prior to
the Maturity Date, except for an amount not in excess of $4,000,000;
(e) Indebtedness of the Company or Restricted
Subsidiaries of the Company provided (i) the Interest Coverage Ratio
of the Company for the applicable Four Quarter Period would have been
at least 2.5:1.0 after giving pro forma effect to such incurrence or
issuance and the application of the proceeds therefrom; (ii) such
Indebtedness shall be either contractually subordinated to or rank
pari passu with the Securities; and (iii) no scheduled installment or
other required payment of principal or interest on any such
Indebtedness shall be due and payable prior to the Maturity Date,
except for an amount not in excess of 20% of the principal amount of
such Indebtedness; and
(f) any Investments permitted under Section 4.14 (the
foregoing items in clauses (a) through (f) are referred to as
"Permitted Indebtedness").
Section 4.8. 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
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appropriate proceedings and for which adequate reserves, if any, required by
GAAP shall have been set aside.
Section 4.9. Repurchase at Holder's Option Upon Change in Control.
(a) 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 the lesser of (i)
the Optional Redemption Price (as defined in the Securities) then in effect or
(ii) 101% of the principal amount of such Securities to be repurchased (the
"Change in Control Repurchase Price"), together with accrued and unpaid
interest, if any, to the Repurchase Date. Within 30 days after the occurrence of
a Change in Control, the Company shall mail to all holders of record of such
Securities 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:
(1) that the Company Notice is being delivered pursuant
to this Section 4.9 and that all Securities tendered will be accepted
for payment;
(2) 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");
(3) that any Securities not tendered will continue to
accrue interest;
(4) 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;
(5) 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
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(6) 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 Security
equal in principal amount to any 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:
(i) 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 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;
(ii) 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, that no Change in
Control will be deemed to occur pursuant to this clause (ii)
upon the consummation of the Merger; or
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(iii) the replacement of a majority of the Board of
Directors of the Company from the directors who constituted
the Board of Directors of SFW Acquisition Corp. 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 SFW Acquisition Corp. 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
"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
event. 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 4.10. Limitation on Transactions with Affiliates.
Neither the Company nor any of its Restricted Subsidiaries nor the
Guarantor shall, from and after the date hereof, 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 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,
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consulting agreement and indemnification obligations 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, (iii) the payment of reasonable and customary
fees to directors of the Company who are not employees of the Company, (iv)
transactions permitted under Sections 4.5 and 4.14 hereof, and (v) the
anticipated offset by Dart against the promissory note in the principal amount
of approximately $1,493,000 payable by Dart to Shoppers, reflecting certain
claims that Dart and its Subsidiaries have raised against Shoppers, in each
case, shall not be deemed Affiliate Transactions.
Section 4.11. 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 date hereof and any other businesses related thereto.
Section 4.12. 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 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.
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Section 4.13. 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 4.14. 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 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; and (vi) Investments permitted to be made with the Net Cash
Proceeds of Asset Sales pursuant to Section 4.20.
Section 4.15. 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 Shoppers and its Restricted
Subsidiaries existing as of the Issue Date; (b) Permitted Liens; (c) Liens on
the assets and property of the Company to secure the payment of all or a part of
the purchase price of assets or property acquired in the ordinary course of
business after the Issue Date or to secure Capitalized Lease Obligations,
provided that (i) 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 (ii) such Liens shall not encumber any assets or
property of the Company or its 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; (d) 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; (e) 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; (f) Liens on Acquired Indebtedness, provided that
such Liens (i) are not incurred in connection with, or in contemplation of the
acquisition of the property or assets acquired and (ii) do not extend to or
cover any property or assets of the Company or any of its
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Restricted Subsidiaries (other than the property or assets of the Restricted
Subsidiary so acquired that are subject to such Lien); (g) Liens in favor of the
Trustee under this Indenture; and (h) 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
Subsidiaries) now owned or hereafter acquired by it.
Notwithstanding the foregoing, Liens shall be permitted by the
previous clauses (a) 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 4.16. 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 4.17. 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.
Section 4.18. 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 4.19. The Merger with Shoppers.
The Company shall consummate the Merger as soon as practicable after
the Acquisition (but in no event more than 15 days after the closing of the
Acquisition).
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Section 4.20. 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 its 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) after such time as the accumulated Net Cash Proceeds equals or exceeds
$5 million, apply or cause to be applied 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"); provided, however, that the Company shall have
the right to 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 Credit Facility without a permanent reduction of the commitment
thereunder.
Notice of a Net Cash Proceeds Offer pursuant to this Section 4.20 will
be mailed to record Holders of Securities as shown on the register of Holders
not less than 325 days nor more than 365 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:
(1) that the Net Cash Proceeds Offer is being made
pursuant to Section 4.20 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);
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(2) 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");
(3) that any Security not tendered will continue to
accrue interest if interest is then accruing;
(4) that, unless the Company defaults in making payment
therefor, any Security accepted for payment pursuant to the Net Cash Proceeds
Offer shall cease to accrue interest after the Proceeds Purchase Date;
(5) 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;
(6) 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
his election to have such Security purchased;
(7) 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
(8) 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 4.20, the Trustee shall act as the Paying Agent.
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Any amounts remaining after the purchase of Securities pursuant to a
Net Cash Proceeds Offer shall be returned by the Trustee to the Company.
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 4.20, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 4.20 by virtue thereof.
Section 4.21. Repayment of Bridge Loan.
Immediately following the Merger, the Company shall repay the Bridge
Loan in full and shall pay all interest, costs and fees related thereto.
Section 4.22. Limitation on Issuance and Sale of Capital Stock of
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 4.20.
ARTICLE 5.
SUCCESSORS
Section 5.1. 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 or permit any of its Restricted
Subsidiaries to do any of the foregoing, 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
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incurred or anticipated to be incurred in connection with or in respect to such
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 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
(e) and (f) of this Section 5.1 shall not apply to the Merger. 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 5.2. 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 6.1. Events of Default.
"Event of Default," whenever used herein, means any one of the
following events:
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(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
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 in the covenants set forth in Sections 4.19
and 4.21 to consummate the Merger and to repay the Bridge Loan and
related costs, fees and interest by the dates set forth herein; or
(iv) 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), (ii) or (iii) 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
(v) 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
(vi) 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
(vii) 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 sixty (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
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of the Company, the Guarantor or such Significant Subsidiary, or of
the property of any such Person, or for 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 sixty (60) days; or
(viii) this Indenture 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 thereby,
in each case, as determined by a court of competent jurisdiction.
Section 6.2. Acceleration.
If an Event of Default (other than an Event of Default specified in
clause (vii) 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 (vii) 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 6.3. 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.
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Section 6.4. Waiver of Existing and Past Defaults.
Subject to Section 2.9, the Holders of a majority in principal amount
of the then outstanding Securities by written notice to the Trustee may waive an
existing Default or Event of Default and its consequences, except a continuing
Default or Event of Default in the payment of the principal of, 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 thereon.
Section 6.5. Control by Majority.
Subject to Section 2.9, the Holders of a majority in 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. 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 6.6. Limitation on Suits.
A Securityholder may pursue a remedy with respect to this Indenture or
the Securities only if:
(1) the Holder gives to the Trustee notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of
the then outstanding Securities make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within
15 days after receipt of the request and the offer of indemnity; and
(5) during such 15-day period the Holders of a majority
in principal amount of the then outstanding Securities do not give the
Trustee a direction inconsistent with the request.
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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 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal 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 6.8. 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 6.9. 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 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee 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 principal and interest, respectively; and
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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 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as 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 principal
amount of the then outstanding Securities.
Section 6.12. 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 6.13. Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security
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.
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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 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise thereof as a prudent
Person would exercise or use under the circumstances in the conduct of his own
affairs.
(b) 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.
(c) 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 Section 6.5.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to Sections 7.1 and Section 7.2.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
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(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds held
in trust except to the extent required by law.
(g) 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 7.2. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document, 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.
(b) 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.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any Agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) 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.
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
(g) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to
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the provisions of this Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
Section 7.3. 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 7.4. 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 7.5. 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 of
Securities 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 Section 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 7.6. 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 Section 313(a) (but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA Section 313(b)(2) to the
extent applicable. The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
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A copy of each report at the time of its mailing to Holders shall be
filed with the SEC 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 7.7. 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. 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 7.8. 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 effective until a successor Trustee has accepted
its appointment pursuant to this Section 7.8. The
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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:
(1) the Trustee fails to comply with Section 7.10;
(2) 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;
(3) a Custodian or public officer takes charge of the
Trustee or its property; or
(4) 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 7.9. 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.
Section 7.10. Eligibility; Disqualification.
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This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 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
Section 310(b), including the optional provision permitted by the second
sentence of TIA Section 310(b)(9). The provisions of TIA Section 310 shall apply
to the Company, as obligor of the Securities.
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
The provisions of TIA Section 311 shall apply to the Company, as obligor of the
Securities.
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.1. 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:
(1) 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;
(2) the Company shall have irrevocably deposited or
caused to be deposited with the Trustee or a trustee satisfactory to
the Trustee, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee, as trust funds in trust
solely for the benefit of the Holders for that purpose, money in such
amount as is sufficient without consideration of reinvestment of such
interest, to pay principal of, premium, if any, and interest on the
outstanding Securities to maturity or redemption; provided that the
Trustee shall have been irrevocably instructed to apply such money to
the payment of said principal, premium, if any, and interest with
respect to the Securities;
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(3) 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;
(4) the Company shall have paid all other sums payable
by it hereunder; and
(5) 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 8.2. Legal Defeasance and Covenant Defeasance.
(a) 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).
(b) 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,
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with respect to the Trustee, 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.
(c) Upon the Company's exercise under paragraph (a) of
the option applicable to this paragraph (c), the Company shall be released and
discharged from its obligations under any covenant contained in Article 5 and in
Sections 4.5, 4.7 through 4.12, 4.14 and 4.15 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.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to the outstanding
Securities:
(i) 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
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have received an irrevocable written order from the Company
instructing the Trustee (or other qualifying trustee) to apply such
money or the proceeds of such U.S. Government Obligations to said
payments with respect to the Securities;
(ii) no Default or Event of Default or event which with
notice or lapse of time or both would become a Default or an Event of
Default with respect to the 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);
(iii) such legal defeasance or covenant defeasance shall
not cause the Trustee to have a conflicting interest with respect to
any Securities of the Company;
(iv) such legal defeasance or covenant defeasance shall
not result in a breach or violation of, or constitute a Default or
Event of Default under, this Indenture or any other material agreement
or instrument to which the Company or any Restricted Subsidiary is a
party or by which it is bound;
(v) in the case of an election under paragraph (b)
above, the Company shall have delivered to the Trustee an Opinion of
Counsel, stating that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (y) since
the 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;
(vi) in the case of an election under paragraph (c)
above, the Company shall have delivered to the Trustee an Opinion of
Counsel, to the effect that the Holders of the outstanding 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;
(vii) 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;
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(viii) 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
(ix) 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 of the Securities
over other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others.
(e) All money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this paragraph (e), the "Trustee")
pursuant to paragraph (d) above in respect of the outstanding Securities shall
be held in trust and applied by the Trustee, in accordance with the provisions
of such Securities and this Indenture, to the payment, either directly or
through any Paying Agent (other than the Company or any Affiliate of the
Company) as the Trustee may determine, to the Holders of such Securities of all
sums due and to become due thereon in respect of principal, premium 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 8.3. 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.
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Section 8.4. 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 8.5. 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 9.1. 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:
(1) 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;
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(2) to mortgage, pledge, hypothecate or grant a
security interest in favor of the 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;
(3) to make any change that does not adversely affect
the rights hereunder of any Holder;
(4) 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;
(5) 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;
(6) to evidence the succession of Shoppers to the
Company, and the assumption by Shoppers of the obligations of the
Company herein and in the Securities;
(7) 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
(8) 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 (except with respect to clause (5) above concerning
the Merger or clause (6) above), 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 9.2. 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):
(1) reduce the principal amount outstanding of, extend
the fixed maturity of, or alter the redemption provisions of, the
Securities;
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(2) reduce the rate of or change the time for payment
of interest on any Security;
(3) make any Security payable in money or currency
other than that stated in the Security;
(4) impair the right to initiate suit for the
enforcement of any payment on or with respect to any Security;
(5) make any change that affects the ranking or
security of the Securities;
(6) waive a Default or Event of Default in the payment
of the principal of, Liquidated Damages, if any, or interest on, any
Security;
(7) 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
(8) 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 9.3. 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 9.4. 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
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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.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, 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 (8) 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 9.5. 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 9.6. 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.
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ARTICLE 10.
GUARANTEE
Section 10.1. Guarantee.
(a) 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.
(b) 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.
(c) 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
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obligations of the Guarantor herein shall not be discharged or
impaired or otherwise 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.
(d) 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.
(e) 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 10.2. 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 10.3. 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 10.4. 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 10.5. 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 10.6. 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.
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The Guarantor agrees that its Guarantee set forth in this
Article 10 shall remain in 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 10.7. 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 11.1. 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
hereunder or thereunder (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"):
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(i) all of the shares of Capital Stock of the Company and
each other direct Subsidiary of the Guarantor which may exist from
time to time (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;
(ii) all additional shares of Capital Stock of the Company,
and each other direct Subsidiary of the Guarantor which may exist from
time to time, from time to time acquired by or issued to the Guarantor
in any manner including shares of Shoppers received pursuant to the
Merger (which shares shall be deemed to be Pledged Shares), 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
(iii) 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 11.2. Delivery of Collateral.
(a) 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.
(b) 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.
(c) If an issuer of Pledged Shares is incorporated in a
jurisdiction which does not permit the use of certificates to evidence
equity ownership, then the Guarantor shall, to the extent permitted by
applicable law, record such pledge on the stock register of the issuer
of such Pledged Shares, execute any customary stock pledge forms or
other documents necessary to complete the pledge and give the Trustee
the right to transfer the Pledged Shares under the terms hereof and
provide to the Trustee a written opinion of counsel, in form and
substance satisfactory to it, confirming such pledge.
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Section 11.3. Representations and Warranties.
The Guarantor hereby represents and warrants as follows:
(a) 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. Except as set
forth on Schedule I hereto, upon consummation of the Merger, it will
be the legal, record and beneficial owner of all of the outstanding
Capital Stock of Shoppers, and have 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.
(b) It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Indenture and
to carry out the provisions and conditions hereof (including, without
limitation, the creation and perfection of the security interests in
the Collateral); and this Indenture has been duly authorized, 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.
(c) 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.
(d) The Pledged Shares constitute all of the Capital Stock of
each issuer of Pledged Shares owned by the Guarantor; 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 any issuer of Pledged Shares described on Schedule I hereto
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.
(e) 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. Immediately following the Merger, the Pledged Shares
will represent all of the issued and outstanding shares of Capital
Stock of Shoppers and such shares will have been duly authorized and
validly issued for good and valuable consideration and are fully paid
and non-assessable.
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(f) 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.
(g) The Guarantor has no direct Subsidiaries other than the
Company.
Section 11.4. Further Assurances.
(a) 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
any issuer constituting Pledged Shares pursuant to Section 11.1,
provide to the Trustee a revised Schedule I to reflect any changes
made necessary by such acquisition.
(b) 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 11.5. Dividends; Voting Rights.
(a) As long as no Event of Default shall have occurred and
be continuing:
(i) 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 issuer of any of the Pledged
Shares except as otherwise provided by the terms of this Indenture;
(ii) 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
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(1) 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;
(2) 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
(3) 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 endorsement and accompanied by any documentation
necessary to ensure and evidence that a first priority security
interest is being created therein); and
(iii) 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.
(b) Upon the occurrence and during the continuance of an
Event of Default:
(i) 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;
(ii) 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
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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
(iii) 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.
(c) 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 receive dividends, distributions and other
payments pursuant to Section 11.5(a)(ii) shall revert to the
Guarantor.
(d) 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.
(e) The Trustee may join in any plan of voluntary or
involuntary reorganization or readjustment or rearrangement in respect
of any Pledged Shares or any issuer thereof 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 11.6. 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 to the Collateral or any part thereof and to give full
discharge for the same. This power, being coupled with an interest, is
irrevocable.
Section 11.7. Trustee May Perform.
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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 expenses of the Trustee incurred
in connection therewith shall be payable by the Guarantor under Section 7.7.
Section 11.8. 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 thereunder, 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.
Section 11.9. 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 at 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.
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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 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 issuers of the Collateral to register any securities
constituting such Collateral for public sale under the Securities Act, or under
applicable state securities laws, even if they 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 expense 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 11.10. Application of Proceeds.
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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 11.11. 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 11.12. Certificates and Opinions.
The Guarantor shall comply with (a) TIA Section 314(b), relating to
Opinions of Counsel regarding the Lien of this Indenture and (b) TIA Section
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 Section 314(d) may be executed and
delivered by an Officer of the Guarantor to the extent permitted by TIA Section
314(d).
Section 11.13. 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.
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ARTICLE 12.
MISCELLANEOUS
Section 12.1. 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 12.2. 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:
if to the Company:
SFW Acquisition Corp.
3300 75th Avenue
Landover, MD 20785
Attention: Chief Financial Officer
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: Chief Financial Officer
if to the Trustee:
Norwest Bank Minnesota, National Association
6th Street & Marquette Avenue
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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 Section 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.
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 12.3. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 12.4. 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 (except with respect to the Merger), the Company
shall furnish to the Trustee:
(a) 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
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(b) at the Trustee's reasonable request, an Opinion of
Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Section 12.5. 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:
(1) a statement that the Person making such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(2) 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;
(3) 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
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with; provided,
however, that, with respect to 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 12.6. 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 12.7. 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 12.8. 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
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Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.
Section 12.9. 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 12.10. 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 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 12.11. 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 12.12. 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.
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Section 12.13. 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 12.14. 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.
SFW ACQUISITION CORP.
By: /s/ MARK A. FLINT
-----------------------
Name: Mark A. Flint
Title: President
Attest:
/s/ ELLIOT ARDITTI
- ---------------------------
Name: Elliot Arditti
SFW HOLDING CORP.
By: /s/ MARK A. FLINT
-----------------------
Name: Mark A. Flint
Title: President
Attest:
/s/ ELLIOT ARDITTI
- ---------------------------
Name: Elliot Arditti
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ CURTIS D. SCHWEGMAN
-----------------------
Name: Curtis D. Schwegman
Title: Assistant Vice President
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